REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.__8114____OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 5805 OF 2019)

ONGC LABOUR UNION                         APPELLANT(S)

VERSUS

ONGC DEHRADUN & ORS.                        RESPONDENT(S)

J U D G M E N T

Hrishikesh Roy, J.

1. Leave granted.

2. Heard  Mr.  Colin  Gonsalves,  Learned  Senior  Counsel

representing the appellant.  Also heard Mr J.P. Cama, learned Senior

Counsel representing Respondent No.1/Writ Petitioner (ONGC). Ms.

Alka  Agrawal,  the  learned  counsel  is  representing  the  Union  of

India.

3. This appeal is filed by the ONGC Labour Union who however

were not impleaded in the Writ Petition No.1323 of 2013, filed by

the  ONGC  in  the  High  Court  of  Uttarakhand.  The  ONGC  had

challenged the notification dated 08.09.1994 (Annex P6) issued by

the  Government  of  India,  under  Section  10(1) of  the  Contract

Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to 1

as  ‘the CLRA Act’) prohibiting employment of  contract  labour  in

different categories of work, in the ONGC. The High Court allowed

the ONGC’s Writ Petition and quashed the 08.09.1994 notification

of the Central Government. Assailing the said verdict, the Labour

Union  contends  before  us  that  the  impugned  prohibitory

notification  was  issued  after  complying  with  the  provisions  of

Section 10 of the CLRA Act, which requires the Central Government

to  take  into  consideration  the  state  of  employment  of  contract

labour  in  any  process,  operation  or  other  works  of  any

establishment. Specifically, the appropriate Government is required

to bear in mind the conditions of work and benefits provided for

the contract  labour in  the establishment by taking into account

other  relevant  factors  i.e.  whether  the  work  is  incidental  to  or

necessary for the industry, if it is perennial in nature, whether it is

ordinarily done through regular workmen in the establishment or

whether it is sufficient to employ considerable number of whole-

time workmen.  

3A. The  Section 10 of  the CLRA Act being relevant is extracted

herein below:-

“10. Prohibition of employment of contract labour –(1)  Notwithstanding  anything  contained  in  this Act,  the  appropriate  Government  may,  after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the  Official  Gazette,  employment  of  contract labour in any process, operation or other work in any establishment. (2)  Before  issuing  any  notification  under  sub- section  (1)  in  relation  to  an  establishment,  the appropriate Government shall have regard to the conditions of work and benefits provided for the

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contract  labour  in  that  establishment  and other relevant factors, such as – (a) whether the process, operation or other work is  incidental  to,  or  necessary  for  the  industry, trade, business, manufacture or occupation that is carried on in the establishment; (b) whether it is of perennial nature, that is to say, it  is  of  sufficient  duration  having  regard  to  the nature of  industry,  trade,  business,  manufacture or  occupation  that  is  carried  on  in  that establishment; (c)  whether it  is  done ordinarily  through regular workmen  in  that  establishment  or  an establishment similar thereto; (d) whether it is sufficient to employ considerable number of whole-time workmen. Explanation.  –  If  a  question  arises  whether  any process or operation or other work is of perennial nature,  the  decision  of  the  appropriate Government thereon shall be final.”

4. Under the impugned notification (08.09.1994) of the Central

Government, employment of contract labour qua 13 categories of

job  was  prohibited.  According  to  the  appellant,  i.e.  the  ONGC

Labour  Union,  the  Government  notification  for  the  ONGC  was

based on the recommendations of the Sub-Committee constituted

to go into the question of prohibition of employment of contract

labour,  in  the  arena of  maintenance  and utility  installations  i.e.

firefighting electrician, plumbers, flower decoration, sullage plants

etc., in the establishments of the ONGC.

5.1 The  learned  Senior  Counsel  Mr.  Colin  Gonsalves  for  the

appellant  argues  that  when  the  challenge  to  the  CLRA  Act

notification  was  made,  the  ONGC  should  have  arrayed  the

representative  Labour  Union  whose  members  are  likely  to  be

impacted by the Court proceeding and since this was not done, the

ONGC Labour Union,  had no opportunity before the High Court of

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Uttarakhand.  The  learned  Senior  Counsel  refers  to  the

Communication dated 31.05.1993 (Annexure-P/3) and the report of

the Sub-Committee to point out that the Ministry of Petroleum &

Natural  Gas  had  undertaken  the  required  study  on  the

establishments  of  the  ONGC,  before  issuing  the  impugned

notification (08.09.1994) under the CLRA Act but in the absence of

the Labour Union, the High Court was kept in the dark about the

Sub-Committee’s inspection, deliberations and recommendation to

the Ministry. Thus only one sided projection was made before the

High Court. This by itself according to the Counsel, would warrant

interference with the impugned judgment rendered in absence of

the affected workman.

5.2 The  appellant’s  counsel  has  taken  us  through  the

communication dated 19.10.1994 issued by the Industrial Relations

Department of the ONGC and also the follow up communication

dated 18.06.1996 to point out that a conscious decision was taken

by the ONGC itself to comply with the direction on prohibition of

contract  labour  but  the  organizational  decision  was  disregarded

and  instead,  the  ONGC  approached  the  High  Court  in  2014  to

challenge the long standing notification (08.09.1994), issued under

the CLRA Act.

5.3. In course of his submission Mr. Gonsalves refers to the similar

challenge made by the ONGC in the Andhra Pradesh High Court

and  more  particularly  the  counter  affidavit  filed  by  the  Central

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Government in the said proceeding. It was averred therein that a

Sub-Committee was constituted by the Central Advisory Contract

Labour Board to study the working of the Contract Labour system

in certain jobs of maintenance and utility at the installations which

were common to the establishments of ONGC and it is evident from

the report of the Sub-Committee that ONGC is being organized on

the  basis  of  the  functional  business  centres  with  commercial

working relationship,  on a common pattern.  The  affidavit  shows

that the Sub-Committee visited various installations of ONGC and

held widespread discussion with the workers’ representatives and

also  the  management  of  the  Eastern,  Western  and  Southern

Regional Business Centres where the ONGC had major presence in

their  operation.   More specifically,  the counsel  submits  that  the

Sub-Committee  members  visited  the  installations  of  ONGC  in

Madras,  Jorhat,  Dehradun,  Baroda, Bombay and it  was projected

before  the  Andhra  Pradesh  High  Court  that  the  Sub-Committee

conducted a thorough study in different  organizational  set-up in

the ONGC and interacted with the stake holders before submitting

their  report.  This  was preceded by adequate opportunity  to  the

ONGC management and the workers.

5.4 Highlighting the above, Mr. Gonsalves argues that although

the  recommendation  of  the  Sub-Committee  or  the  Board  is

advisory in nature, the Sub-Committee had made careful study of

all  aspects  and  made  their  recommendation.  The  Central

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Government  in  their  turn  accepted  only  the  unanimous

recommendation of the Sub-Committee for 11 categories. For the

remaining 15 job categories where there was no unanimity, barring

the radio operators and drivers, all others were excluded from the

prohibited  categories.  According  to  appellant’s  counsel,  the  fact

that the organizational objective of the ONGC was guided by the

uniform policy with regard to recruitment of man power on regular

basis or through the contract labour system, the situation would

not vary from establishment to establishment, to warrant quashing

of the notification dated 08.09.1994, issued under Section 10(1) of

the CLRA Act.

5.5 Dealing with the judgment in Steel Authority of India Ltd. and

Others vs. National Union Waterfront Workers and others reported

in (2001) 7 SCC 1,  the counsel for the appellant argues that the

said  judgment  pertaining  to  the  earlier  notification (09.12.1976)

under Section 10(1) of the CLRA Act, could not have been the basis

for the impugned judgment by the Uttarakhand High Court for the

later  notification  of  08.09.1994  since  the  essential  backdrop

preceding the two notifications were dissimilar and different. In the

case in hand, since the Writ Petitioner ONGC omitted to place on

record the relevant materials pertaining to the recommendation of

the  Sub-committee  (now produced  in  this  Court),  Mr.  Gonsalves

argues  that  the  High  Court  committed  error  in  reaching  a

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conclusion of non-application of mind by the Central Government,

while issuing the impugned notification.

6.1. Per  contra,  Mr.  J.P.  Cama,  the  learned  Senior  Counsel

representing  the  ONGC  submits  that  when  prohibition  of

employment of contract labour is proposed under the CLRA Act, the

Central Government is required to study the status of employment

of  contract  labour  and  the  reference  for  the  study  must  be

establishment  specific.  According  to  the  counsel,  unless  an

establishment  related  exercise  is  undertaken,  the  Prohibition

notification under  Section 10(1), making it applicable to all ONGC

establishments,  across the country,  could not  have been validly

issued by the Central Government.

6.2 Supporting the High Court’s verdict, learned counsel for the

respondent refers to certain passages in the SAIL (supra) judgment

to  contend  that  an  omnibus  notification  without  considering  all

factors in each establishment cannot be issued as this would be

contrary to the statutory postulates of Section 10 of the CLRA Act.

6.3 The Senior Counsel for the first respondent argues that the

impugned  notification  (08.09.1994)  prohibiting  employment  of

contract  labour  was  hastily  issued  because  of  the  time  frame

stipulated by the Bombay High Court in the WP(C) No.2185/1991.

According  to  Mr.  Cama,  establishment  specific  study  was  not

conducted and hence  the decision-making process  was  vitiated.

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Moreover, other relevant factors including those mentioned in sub-

section (2) of Section 10 of the CLRA Act were not considered and

the impugned notification itself  did not mention in its  body, the

compliance with the requirement of Section 10(2) of the CLRA Act.

The learned Senior Counsel projects that the Central Government’s

decision is vitiated by non-application of mind.

6.4. Mr. Cama next submits that for alleged failure to implement

the notification dated 08.09.1994 (stayed by Andhra Pradesh High

Court),  the  officers  of  the  ONGC  were  subjected  to  criminal

summons by the CJM, Dehradun and that is why, the Section 482

Cr.P.C. Petition had to be filed before the Uttarakhand High Court.

Later, the W.P. No.1323/2013 (M/S) was also filed in the same High

Court by the ONGC, to challenge the prohibitory notification issued

under Section 10(1) of the CLRA Act.  

7. On the other hand Ms. Alka Agrawal, the learned Counsel for

the Central Government contended that the impugned notification

was issued in accordance with the requirement of Section 10 of the

CLRA Act. Moreover, background study on employment of contract

labour  was  conducted,  relevant  reports  were  received  and  the

process  was  finalized  only  after  consultation  with  the  Central

Advisory Contract Labour Board and other stakeholders.

8. The 08.09.1994 notification under Section 10 of the CLRA Act

which  abolished  the  contract  labour  system  in  ONGC

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establishments  across  the  country,  was  challenged  for  the  first

time in 2003 by the Rajahmundry assets of the ONGC which filed

the  Writ  Petition  No.4460 of  2003 and  Writ  Petition  No.3397  of

2003, in the Andhra Pradesh High Court. Interim order was passed

on 25.03.2003 by the  High Court  in  that  proceeding and  those

cases are perhaps still pending. Before the Uttarakhand High Court,

the case came to be filed much later in 2013. Even before those

challenges  were  made,  internal  circulars  were  issued within  the

ONGC, to comply with the 1994 notification, issued under Section

10 of the CLRA Act.

9. The  averred  stand  in  the  Central  Government’s  counter

affidavit filed in the Andhra Pradesh High Court shows that out of

26  categories  of  work  in  the  ONGC,  the  Sub-Committee  was

unanimous  in  recommending  abolition  of  Contract  Labour  in  11

categories of work. However, there was no consensus amongst the

members  for  the  remaining  15  categories.  This  difference  of

opinion was noted and the Central  Government then decided to

prohibit contract labour in 11 out of the 26 specified categories of

work, on the basis of the input received from the Sub-Committee.

The  relevant  portion  of  averments  in  the  counter  affidavit  is

extracted herein below for ready reference: -

“............................................................................... .. Thus it will be seen that out of 26 items of work the Government abolished 11 items of work where the  sub-committee  recommendation  was

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unanimous and out of the remaining 15 items of works  where  the  sub-committee  was  not unanimous only the above two categories viz radio operators  and  drivers  were  included  for prohibition. Hence it is not correct on the part of the  petitioner  to  state  that  the  Govt.  did  not properly apply its mind over the issue. In reply to the para-7 of the affidavit it is submitted that the report of the sub-committee was signed by three members -2 non-official  and 1 ex-officio – where one member was from the employee side and the other from the employers. The report therefore did not lack the necessary balance. The report clearly indicated the areas of disagreement. It is therefore incorrect on the part of the petitioner to state that the report lacked necessary rigour. Moreover, the report is rather an input in the overall process of notifying a decision by the Government. Also the sub-committee have conducted its business as per quorum in accordance with Rule 16(ii)  of  the CL (R&A) Central Rules, 1971. ................................................................................ ”

10. It  was also averred in the said  affidavit  before the Andhra

Pradesh High Court that the Sub-Committee was not mandatorily

required to visit each and every establishment for their assessment

especially  when  the  operations  are  common  in  all  projects  in

ONGC.   The  relevant  portion  of  the  averments  in  the  counter

affidavit filed by the Union of India reads as under:

“…..The sub-committee in the course of its work obtained  information  about  the  installations  of ONGC.  Also the sub-committee held widespread discussion  with  the workers’  representatives  and the management of Eastern, Western & Southern Regional  Business  Centres  where  ONGC  had  its operations  in  majority  in  the  course  of  its examination  of  the  Contract  Labour  System  in certain  jobs  in  ONGC.   It  visited  Madras  on 15.10.92  and  heard  the  submissions  of  the workers’  union…….It  also  visited  installations  of ONGC  at  Ichhapur  Drilling  site,  West  Bengal, Gandhar,  Ankaleshwar  and  interacted  with  the workmen.   It  also  heard  the  submissions  of  the workers and the management at Baroda.  It also visited  the  installations  in  the  offshore,  Bombay and elicited information both from workmen and management…….It is therefore wrong to suggest

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that the sub-committee conducted a nominal and superficial enquiry.  It is also wrong to suggest that the  Govt.  of  India  mechanically  issued  the impugned  notification  without  proper  application of mind and without having regard to the various legal requirements as specified in Section 10(2) of the Contract Labour (Regulation and Abolition) Act, 1970…..”.

11. The  Section 10(1) notification prohibiting contract labour as

can be seen, would directly impact the workmen in the ONGC but

most surprisingly,  in the writ  petitions filed before the two High

Courts,  the ONGC management  choose not  to  array  any of  the

recognised labour Unions. Hence, the affected contract labourers in

the ONGC were denied the opportunity to participate in the writ

proceedings in the concerned High Courts.

12. The impugned judgment indicates that the High Court had no

access  to  the  previous  exercise  undertaken  by  the  Central

Government,  leading  to  issuance  of  the  impugned  notification

under Section 10(1) of the CLRA Act.  It appears that the factum of

constitution  of  the  sub-committees  prior  to  the  issuance  of  the

impugned  notification  and  the  studies  made  by  the  sub-

committees and the nature of  their  recommendations,  were not

brought to the notice of the learned Judge.  Besides the Court was

made to believe that the Central Government had not consulted

the Labour Advisory Board.  Thus, wrong inference was drawn on

incorrect  premises  and  the  High  Court  proceeded  under  the

presumptive footing as if, there was non-application of mind by the

Central Government.

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13. While the above discussions and the contentions raised by

the respective Counsel might normally merit our consideration, the

denial of opportunity to the appellant or to any other recognized

labour Union in the High Court, persuade us to consider another

option  which  would  be  consistent  with  the  principles  of  natural

justice. The prohibition notification undoubtedly impact the life and

livelihood of the contract labourers, but unfortunately neither the

ONGC labour Union (the appellant herein) or the other recognized

Labour Unions in the ONGC were represented or heard in the High

Court.

14. It  is  also  necessary  to  point  out  that  the  learned  Judge

rendered the impugned judgment primarily on the basis of the SAIL

verdict  since  none  of  the  relevant  materials  for  the  1994

notification were produced in the High Court. Crucially, when the

impugned notification was issued, the Central Government did not

have the  benefit  of  the  SAIL  judgment  rendered  on 30.08.2001

which again related to the 1976 notification. Therefore the question

is whether the learned Judge could have founded his decision on

the errors/omissions, noted in SAIL (supra) judgment.

15. The primary focus of the challenge in the 30.08.2001 SAIL

verdict  was  to  the  previous  notification  (S.O.  No.776  (E)  dated

09.12.1976)  issued  by  the  Central  Government,  prohibiting

employment  of  contract  labour  in  respect  of  four  categories  of

works  in  establishments,  inter-alia,  of  the  ONGC.  The  said

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notification was struck down with the finding that the pre-requisites

for issuing the notification were not satisfied. It was also perceived

to  be  an  omnibus  notification  without  reference  to  the  relevant

factors-qua  each  establishment.  But  according  to  us,  it  was

necessary  for  the  High  Court  to  determine  whether  the

observations made for the then impugned 09.12.1976 notification

would  also  apply  with  all  vigour,  to  the  presently  impugned

notification (08.09.1994), issued under  Section 10(1)  of the  CLRA

Act. More particularly, the learned Judge should have determined

whether the prohibitory notification was preceded by the required

enquiry on contract labour by the Sub-Committee, the nature of

the  study  by  the  Sub-Committee,  whether  the  views  of  the

stakeholders  were  noticed  by  the  Committee  members  and  the

implications of those, on the decision of the Central Government.

The impugned judgment shows that no material was placed before

the  High  Court  to  indicate  “……….what  inquiry/material  was

carried out to meet the requirements provided under sub-section

(2) of Section of the Act, 1970. There is no reference when the Sub-

Committee was constituted and what were its recommendations”.

The Central Government also failed to project that any consultation

was made with the Central Advisory Labour Board.  

16. The  afore  quoted  observation  in  the  judgment  under

challenge  would  suggest  that  the  High  Court’s  Judgment  was

passed  without  being  apprised  of  the  relevant  materials  and

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primarily on the basis of the SAIL (supra) judgment which however

related to the 1976 notification. This in our opinion has resulted in

prejudice  for  those  who,  given  the  opportunity,  could  have

apprised  the  High  Court  with  all  facts  and  the  detailed

study/discussion  by  the  Sub-Committees,  preceding  the

08.09.1994 notification.  

17. In  the  above  circumstances,  since  no  opportunity  was

provided to the appellant Union in a case, which directly concerns

the members of the  ONGC Labour Union and other workman, we

deem  it  appropriate  to  order  restoration  of  the  Writ  Petition

No.1323 of 2013 (M/S), in the file of the High Court of Uttarakhand

for fresh consideration. The appellant i.e., the ONGC Labour Union

– Gujarat is ordered to be impleaded in the restored proceedings.

As suggested by the appellant’s counsel, other recognized labour

Unions within ONGC such as the ONGC Contractual Worker Union,

Cachar Forward Base, Silchar, Assam – 788026, the ONGC Contract

Employee Union, 15, Sewak Ashram Road, Dehradun, Uttarakhand

– 248001, the ONGC (WOU) Karamchari Sanghatana, 11 High, NBP

GR Heights, Hazira, Mumbai – 394270,  the Petroleum Employees

Union,  Oil  and  Natural  Gas  Corporation  Ltd.,  Godavari  Bhavan,

Rajahmundry –  533107 may also  be vitally  interested and such

concerned  Labour  Unions  must  also  be  impleaded  in  the  High

Court.   The respondent-ONGC, Dehradun shall  implead all  these

labour Unions and serve notice upon them.  The respective senior

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counsel representing the parties have requested for early disposal

of the remanded matter and have offered to argue before the High

Court, without any loss of time.   In view of this, the Uttarakhand

High Court  is  requested to  decide the  matter  expeditiously  and

preferably  within  four  months  of  notice  being  served  on  the

respondents in the restored Writ Petition.  

18. The appeal is disposed of with the above order.

……………………………J.         [R. BANUMATHI]

……………………………J.         [A.S. BOPANNA]

……………………………J.         [HRISHIKESH ROY]

NEW DELHI OCTOBER  17, 2019

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