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REPORTABLE            

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3727 OF 2015

(Arising out of SLP (C) No. 5532 of 2012)

ONGC LTD.                            ....APPELLANT VERSUS

  PETROLEUM COAL  LABOUR UNION & ORS.                  ...RESPONDENTS

J U D G M E N T

V. GOPALA GOWDA, J.

    Leave granted.

2.   The  appellant-Corporation  has  questioned  the  

correctness of the judgment and order dated 11.08.2011  

passed  by  the  High  Court  of  Judicature  at  Madras  

whereby the High Court dismissed the Writ Appeal No.  

1006 of 2011 filed by the appellant-Corporation against  

the  dismissal  of  their  W.P.  No.  1846  of  2000

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challenging the award dated 26.05.1999 passed by the  

Industrial Tribunal, Tamil Nadu, in I.D. No.66 of 1991,  

wherein  it  was  held  that  non-regularisation  of  the  

concerned workmen in the dispute is not justified and  

directed  the  appellant-Corporation  to  regularise  the  

services  of  the  concerned  workmen  with  effect  from  

14.01.1990, the date on which all of them completed 480  

days.  

3.   The relevant facts are briefly stated hereunder to  

appreciate the rival legal contentions urged on behalf  

of the parties in this appeal.

    The  appellant-Corporation  is  a  Public  Sector  

Undertaking of the Government of India in the name of  

Oil and Natural Gas Corporation Limited (hereinafter  

referred to as the ‘Corporation’). The Corporation has  

a project in the Cauveri Basin, situated in and around  

Karaikal, Union Territory of Puducherry and about 1050  

employees  have  been  regularly  employed  by  the  

Corporation for its project. For the purpose of the  

Corporation’s security requirement for the project, it  

initially employed the concerned workmen some of whom  

are members of the respondent-Union, as security guards

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and security supervisors through contractors. However,  

on  the  notification  dated  08.12.1976  issued  by  the  

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

Labour (Abolition and Regulation) Act, 1970, abolishing  

contract  labour  for  watch  and  ward,  dusting  and  

cleaning jobs in the Corporation, the concerned workmen  

were employed as per the settlement arrived at between  

the Trade Union and the Management of the Corporation  

under Section 18(1) of the Industrial Disputes Act,  

1947 (for short ‘the Act’), under which it was agreed  

to form a Co-operative Society in the name of ‘Thai  

Security  Service  Priyadarshini  Indira  Cooperative  

Society’ (for short ‘the Co-operative Society’) for the  

welfare  of  such  erstwhile  contract  workmen.  The  

services were utilised by the Corporation through the  

Co-operative Society to meet its requirements and for  

the time period for which required, thus dispensing  

with intermediary contractors.

  4.   On  24.11.1982  subject  to  sanction  by  the  

Government  of  India,  the  Corporation  passed  a  

resolution by its policy decision to entrust security  

work to the Central Industrial Security Force (CISF) to

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protect their installations. The said resolution was  

sanctioned by the President of India on 16.12.1985 for  

creation  of  posts  for  security  coverage  of  the  

Corporation.

 5.   This decision of the Corporation was challenged by  

the  Tamilnadu  National  Industrial  and  Commercial  

Employees Union by filing W.P. No. 9688 of 1987 and  

W.P.  No.  11964  of  1987  was  filed  by  the  Petroleum  

Industrial Casual Contract Labour Union before the High  

Court of Madras on the ground of breach of settlement  

arrived at under Section 18(1) of the Act and prayed  

for a consequential direction to absorb the workmen as  

regular  employees.  The  workmen  obtained  an  interim  

order dated 6.10.1987 restraining the Corporation from  

dispensing  with  the  services  of  the  workmen.  The  

learned  single  Judge  of  the  High  Court  upheld  the  

policy decision of the Corporation even in the absence  

of  the  copy  of  the  policy  framed  by  the  Central  

Government and dismissed the aforesaid writ petitions  

vide order dated 5.1.1988 holding that the workers were  

not  entitled  for  regularisation  and  rejected  the  

contentions of the workmen in these writ petitions.

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6.  On 8.9.1987, the Corporation sent a letter to the  

Co-operative Society to withdraw the services of the  

security personnel of the Co-operative Society w.e.f.  

19.10.1987 after handing over charge of the Corporation  

Unit to CISF personnel. An order was passed by the  

Director  General,  CISF,  releasing  52  posts  with  

immediate effect for induction of CISF personnel in the  

Corporation.

 7.   Thereafter,  since  the  induction  of  the  CISF  

personnel into security posts of the Corporation was  

still awaiting sanction from the Central Government,  

the  Corporation  issued  memorandum  of  appointment  

directly  to  each  one  of  the  concerned  workmen  

appointing  them  in  the  posts  of  ‘Watch  and  Ward  

Security’ on term basis from 13.1.1988 to 29.2.1988 and  

also  on  the  condition  that  the  ‘Certified  Standing  

Orders for Contingent Employees of the Oil and Natural  

Gas  Commission’ (for  short  ‘the  Certified  Standing  Orders’) will not apply to them. The concerned workmen  

were paid a monthly salary of approximately Rs.445/-  

per month to security guards and Rs.675/- per month to  

security  supervisors.  After  completion  of  the  above

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mentioned term, the concerned workmen were continued by  

the Corporation in their respective posts as a stop gap  

measure without formal written orders. As a result of  

which, the concerned workmen who were engaged through  

contractors  and  those  who  were  members  of  the  Co-

operative Society became employees of the Corporation  

on temporary basis.

8.  Thereafter,  the  concerned  workmen  raised  an  

industrial  dispute  claiming  regularisation  of  their  

services  in  the  Corporation  and  on  10.10.1991,  the  

Central  Government  in  exercise  of  its  power  under  

Section 10 of the Act, 1947 referred the same to the  

Industrial  Tribunal,  Chennai,  Tamil  Nadu  (for  short  

‘the  Tribunal’)  to  adjudicate  the  dispute  on  the  

following two questions:

“(i)  whether  the  management  of  ONGC  is  justified in not regularising the workmen in  the  instant  dispute,  and,  if  not,  to  what  relief the workmen are entitled to? (ii)  whether  the  management  of  ONGC  is  justified in not paying equal wages to the  workmen in the instant dispute on par with  that of the regular workmen and, if not, to  what relief the workmen are entitled to?”

9.  The reference was taken on file by the Tribunal as  

I.D.  No.66  of  1991.  On  28.04.1993,  the  Trade  Union

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filed  a  memo  stating  that  question  no.(ii)  of  the  

dispute had been settled out of Court and no further  

adjudication  was  required  in  that  regard  by  the  

Tribunal.  The  Tribunal,  adjudicated  the  industrial  

dispute on question no.(i) referred to it on the basis  

of  facts,  circumstances  and  evidence  on  record  and  

passed  an  award  dated  26.05.1999,  directing  the  

Corporation to regularise the services of the concerned  

workmen by relying on the legal principles laid down by  

this  Court  in  the  case  of  Air  India  Statutory  

Corporation & Ors. v. United Labour Union & Ors.1 and  

further held that the concerned workmen were entitled  

for regularisation of their services since they had  

completed 480 days of work as required under Tamil Nadu  

Industrial  Establishments  (Conferment  of  Permanent  

Status to Workmen) Act, 1981.

10. Aggrieved by the award passed by the Tribunal, the  

Corporation challenged the same by filing W.P. No.1846 of  

2000  before  the  learned  single  Judge,  inter  alia,  

contending  that  the  Tribunal  has  erroneously  exercised  

its  jurisdiction  and  passed  an  award  directing  

the Corporation to regularise the services of the concerned  

workmen.  It  was  further  contended  by  the  Corporation  1  (1997) 9 SCC 377

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that  the  concerned  workmen  were  originally  engaged  

through contractors, without  following  any  procedure  of

selection  and  appointment,  therefore,  their  services  

cannot be regularised. In support of this contention,  

reliance was placed on the decision of this Court in  

the case of Secretary, State of Karnataka & Ors. v. Uma  

Devi (3) & Ors.2.

11. On  behalf  of  the  concerned  workmen,  it  was  

contended before the single Judge of the High Court  

that the dispute falls within the jurisdiction of the  

Tribunal under the provisions of the Act and that the  

Tribunal had sufficient jurisdiction to adjudicate the  

dispute referred to it. It was further contended on  

behalf of the concerned workmen that they have been  

working  on  temporary  basis  from  the  year  1988  and  

continuing  their  services  on  temporary  basis  is  an  

unfair labour practice on the part of the Corporation.  

Therefore, it was contended that the Tribunal was right  

in directing the concerned workmen to be regularized  

and that the law laid down in the case of  Uma Devi  

(supra)  had  no  application  to  cases  of  industrial  

adjudication. 2  (2006) 4 SCC 1

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12. The learned single Judge on appreciation of the  

facts, circumstances and the legal contentions urged on  

behalf  of  both  the  parties  held  that  the  dispute  

between the parties regarding non-regularisation of the  

concerned workmen falls within the scope of industrial  

dispute as defined under Section 2(k) of the Act. It is  

further held that the concerned workmen are all victims  

of unfair labour practice having been employed by the  

Corporation for several years on temporary basis and  

even though they were not appointed by following the  

procedure laid down by the Corporation for recruitment  

to such posts, they were entitled for regularisation  

and  that  their  appointment  cannot  be  stated  to  be  

illegal. With the above findings, the writ petition was  

dismissed on merits by the learned single Judge of the  

High Court by its judgment and order dated 04.01.2011.

13. The said judgment and order of the learned single  

Judge was challenged by the Corporation by filing Writ  

Appeal No. 1006 of 2011 before the Division Bench of  

the High Court raising certain questions of law. After  

considering the facts, circumstances and nature of the  

evidence on record which was placed before the Tribunal

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the same was appreciated by the learned single Judge,  

the learned Division Bench of the High Court held that  

the  appointment  of  the  concerned  workmen  by  the  

Corporation cannot be termed as illegal appointment,  

but was only an irregular appointment and therefore,  

they were entitled for regularisation in their services  

having  been  employed  on  temporary  basis  and  having  

completed  more  than  240  days  in  the  calendar  year  

subsequent to 13.1.1988. Therefore, it was held by the  

learned  Division  Bench  of  the  High  Court  that  no  

justifiable or reasonable grounds were found for it to  

interfere with the judgment and order passed by the  

learned single Judge of the High Court. The writ appeal  

of the Corporation was dismissed accordingly. Hence,  

the Corporation filed this appeal by framing certain  

substantial questions of law for consideration of this  

Court.

14. It has been contended by Mr. P.P. Rao, the learned  

senior counsel for the  Corporation that the concerned  

workmen have no right to be regularised as they have  

been  appointed  on  term  basis  without  following  due  

procedure  as  per  the  Recruitment  and  Promotion

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Regulations,  1980  of  the  Oil  and  Natural  Gas  

Commission. The direction contained in the award of the  

Tribunal to regularise the workmen w.e.f. 1.4.1990 is  

contrary to the law declared by the Constitution Bench  

of this Court in Secretary, State of Karnataka v. Uma  

Devi (supra) having regard to the following aspects of  

the case on hand:

a) The appointments of workmen were illegal not  irregular, as they were made without proper  competition among qualified persons  

b) The  concerned  workmen  do  not  possess  the  qualifications  and  training  required  for  discharging duties as security guards against  attacks by armed gangs or terrorists.

c) They  were  not  working  against  sanctioned  posts.

d) The  sanction  obtained  subsequently  was  only  for deployment of members of the CISF.

e) The  concerned  workmen  were,  as  a  stop  gap  arrangement,  though  not  qualified  but  found  physically  fit,  were  employed  for  a  short  period  anticipating  the  posting  of  CISF  personnel.

f) They were not allowed to continue voluntarily  by the management without intervention of any  mandatory  provision  of  law  or  orders  of  Tribunal  and  Courts.  They  could  not  be  discharged and had to be allowed to continue  only  on  account  of  legal  compulsion,  i.e.  33(1) of the I.D. Act 1947 and the interim  orders  of  the  learned  single  Judge  and  the  Division Bench.

g) The management cannot be compelled by judicial  order  to  regularise  the  services  of

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unqualified and untrained workmen as security  guards  for  discharging  duties  which  only  qualified and trained members of an organised  armed force could competently discharge.

15. Further, it has been contended by Mr. Rao that in  

any event, since the workmen themselves having sought  

regularisation only from 1.4.1991, the Tribunal was not  

at  all  justified  in  directing  regularisation  with  

effect from 1.4.1990 and the High Court also erred in  

directing regularisation of workmen with retrospective  

effect from 1.4.1990.

16. It is further contended by him that the award of  

the  Tribunal  is  unsustainable  in  law  by  placing  

reliance  on  Air  India  Statutory  Corporation  (supra)  

which  has  been  subsequently  overruled  by  the  

Constitution Bench in Steel Authority of India Ltd. &  

Ors.  v.  National Union Waterfront Workers & Ors.3. In  

fact, the concerned workmen were not contract labourers  

when  the  industrial  dispute  was  referred  to  the  

Tribunal for its adjudication.

17. It  has  been  further  contended  by  him  that  the  

courts  below  have  erred  in  holding  that  though  the  

3  (2001) 7 SCC 1

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procedure contemplated in the Certified Standing Orders  

of the  Corporation was not followed when the workmen  

were  appointed  on  temporary  basis  they  are  still  

entitled for regularisation in their services by the  

Corporation. It is further contended by the learned  

senior counsel that the very appointment itself having  

been  illegal,  no  order  of  regularisation  of  the  

services of the concerned workmen could be passed by  

the  Tribunal.  The  Corporation would  term  the  

appointment  of  the  concerned  workmen  as  illegal  

appointment as they were appointed in the said post  

either through a contractor or through the Co-operative  

Society, without following the procedure contemplated  

for  selection  as  per  the  Recruitment  Rules  and  

appointments were given to the concerned workmen as per  

the Certified Standing Orders of the  Corporation. In  

support of the said contention reliance was placed on  

the decision of this Court in the case of  Uma Devi  

(supra). Further, it has been contended by him that the  

law  declared  in  the  case  of  Maharashtra  State  Road  

Transport  Corporation  &  Anr. v.  Casteribe  Rajya  

Parivahan Karamchari Sanghatana4 was  per incuriam as  

4  (2009) 8 SCC 556

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the same is inconsistent with the earlier coordinate  

Bench decision in U.P. Power Corporation Ltd. & Anr. v.  

Bijli Mazdoor Sangh & Ors.5 wherein it was declared  

that the Tribunal cannot give relief to the workmen  

which is violative of Article 14 of the Constitution of  

India and the concept of regularisation explained in  

Uma Devi’s case (supra).

18. Further, it has been contended that the Certified  

Standing Orders cannot prevail over Uma Devi’s case or  

Article 14 of the Constitution of India; therefore, the  

concerned workmen cannot rely upon such orders to seek  

regularisation.  In  any  case,  the  Certified  Standing  

Orders  only  confer  the  right  of  consideration  and  

therefore, it is not a vested right for the concerned  

workmen  for  regularisation  in  their  services.  The  

reliance placed on the Certified Standing Orders by  

them is misconceived, hence the award and judgments are  

vitiated in law and liable to be set aside by allowing  

this appeal.  

19. On the other hand, Mr. C.U. Singh, the learned  

senior counsel on behalf of the concerned workmen has  

5  (2007) 5 SCC 755

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strongly rebutted each one of the above contentions put  

forth by Mr. Rao the learned senior counsel on behalf  

of Corporation, by erroneously placing reliance on the  

right  of  the  Corporation  to  implement  the  alleged  

“policy decision” to induct the CISF personnel in the  

posts of the Corporation inter alia contending that it  

is an admitted position that this opening ground taken  

by the  Corporation was neither canvassed before the  

learned single Judge nor the Division Bench of the High  

Court.  Nonetheless,  it  is  to  be  noted  that  while  

raising this ground, the Corporation has not placed on  

record any document evidencing the so-called “policy  

decision” of the Central Government to induct the CISF  

personnel in the posts of the Corporation.  

20. Mr.  Santosh  Krishnan,  the  learned  counsel  also  

appearing for the concerned workmen has contended that  

a “policy decision” cannot alter the Certified Standing  

Orders of the Corporation except in terms of Section 10  

of the Standing Orders Act, 1946. Further, it is urged  

by him that the only relevant document on record is the  

letter dated 8.9.1987, which states that the “policy  

decision” is of the Central Government and not of the

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Corporation.  However,  the  Corporation did  not  even  

amend  its  Recruitment  Rules  or  Certified  Standing  

Orders  to  implement  this  “policy  decision”  only  to  

recruit the CISF personnel for Watch and Ward Services  

posts  of  the  Corporation.  This  has  been  further  

affirmed by the Tribunal in its findings of fact that  

the said defence of the Corporation is only a ruse. The  

Tribunal has held while answering the question referred  

to  it  in  the  order  of  reference  that  the  “policy  

decision” taken by the Corporation is a misnomer as the  

Corporation may  be  controlled  by  the  Central  

Government,  however,  by  no  means  does  it  enjoy  the  

power or the privilege to make any policy decisions as  

understood  by  the  courts  below.  Merely  by  

characterising  an  act  or  omission  as  a  “policy  

decision” does not absolve the Corporation from acting  

in accordance with law and regularise the services of  

the concerned workmen as regular workmen as per Clause  

2(ii)  of  the  Certified  Standing  Orders  of  the  

Corporation.

21. Further, on the contention of the Corporation that  

the Judgment and order dated 5.1.1988 in W.P. Nos. 9688

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of 1987 and 11964 of 1987 forecloses the rights of the  

concerned workmen, it is rebutted by the learned senior  

counsel on behalf of the concerned workmen that the  

said ground was not canvassed either before the learned  

single Judge or the Division Bench of the High Court. A  

perusal of judgment and order would reveal that none of  

the  concerned  workmen,  specifically  the  answering  

respondents were party to the aforesaid proceedings and  

the Corporation itself claimed that only “some of the  

respondent workmen had filed W.P. No.9688 of 1987 for  

absorption”. Further, it is urged by him that assuming  

without  conceding  that  judgment  and  order  dated  

5.1.1988 in W.P. Nos. 9688 of 1987 and 11964 of 1987  

related to regularisation of the concerned workmen, a  

crucial  fact  separates  those  proceedings  from  the  

present  proceedings  as  the  Corporation  on  13.1.1988  

admittedly  ordered  in  favour  of  the  workmen  by  

appointing them on “term basis”. As a result of such  

appointment orders issued in favour of each one of the  

concerned  workmen,  they  became  employees  of  the  

Corporation  albeit  on  “term  basis”,  therefore,  the  

industrial  dispute  raised  by  the  concerned  workmen  

acquired different rights than the challenge in W.P.

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9688 and 11964 of 1987. It is further urged that the  

above submission can also be seen in the light of the  

Certified Standing Orders of the Corporation, wherein  

the employees such as the concerned workmen can claim  

regularisation once they fulfil 240 days of continuous  

service in twelve calendar months and possess minimum  

qualification. The concerned workmen were found to have  

completed  240  days  of  work  in  a  calendar  year  

subsequent to 13.1.1988, therefore, the judgment and  

order dated 5.1.1988 in W.P. Nos. 9688 of 1987 and  

11964  of  1987  do  not  bear  any  relevance  to  this  

litigation as the legal status of the parties stood  

modified subsequent to the said judgment. Further, the  

judgment rendered by the High Court in W.P. Nos. 9688  

of 1987 and 11964 of 1987 without the policy decisions  

of the Central Government being produced and examined  

in  those  proceedings,  any  observation  made  in  that  

regard is wholly untenable in law.

22. Further, it is contended by the learned counsel  

for the concerned workmen that the Corporation cannot  

disclaim the legality of its own Certified Standing  

Orders by stating that  it cannot prevail over  Uma

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Devi’s case (supra) or Article 14 of the Constitution  

and that the Standing Orders only confer the right of  

consideration  and  not  a  vested  right  for  

regularisation. It is contended by him that for the  

last 24 years, the Corporation has not considered and  

in any case will not consider the concerned workmen for  

regularisation to the post of the Corporation if the  

same is left to their own discretion. Further, it is  

urged by him that failure to honour the Standing Orders  

for so many years is what constitutes “unfair trade  

practice” on the part of the Corporation in the present  

case.

23. Rebutting the contention urged on behalf of the  

Corporation that  the  concerned  workmen  are  not  

qualified to be regularized, it has been contended by  

the learned senior counsel for the concerned workmen  

that the Tribunal has noted that the concerned workmen  

are  far  more  qualified  than  the  existing  security  

personnel  of  the  Corporation and  that  they  are  

qualified  to  be  appointed  as  security  guards  and  

supervisors, except one of them. The learned counsel on  

behalf  of  the  concerned  workmen  contended  that  the

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Recruitment Rules are not amended prescribing that only  

the CISF personnel are qualified for guard work.

24. It is further contended by him that in the case of  

Uma Devi(supra), this Court had the occasion to deal  

with the issue of “litigious employment”. Admittedly,  

the concerned workmen were voluntarily appointed by the  

Corporation initially on term basis. It is by virtue of  

Section  33  of  the  Industrial  Disputes  Act  that  the  

Corporation is  prevented  from  terminating  the  

employment of the concerned workmen during the pendency  

of the industrial dispute. The decision of the Tribunal  

was rendered on 26.05.1999 and during the period 1990-

1999, the concerned workmen did not enjoy any litigious  

employment  but  were  beneficiaries  of  a  statutorily  

mandated protection and the Corporation has the right  

under Section 33(i)(a) of the Act to seek permission  

from the conciliation officer/Tribunal to remove them  

from their services but that has not been done by it.  

Therefore,  it  would  be  an  improper  and  misleading  

contention of the Corporation to describe this scenario  

as litigious employment, which contention of it does  

not stand for judicial scrutiny of this Court.

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25. We  have  heard  the  factual  and  rival  legal  

contentions urged  by  the  learned  senior  counsel  on  

behalf  of  both  the  parties  and  answer  the  same  as  

discussed below.

26. Whether jurisdiction of the Tribunal to direct the  

Corporation to regularise the services of the concerned  

workmen in the posts is valid and legal?  

    The Central Government in exercise of its powers  

under  Section  10  of  the  Act  referred  the  existing  

Industrial Dispute between the concerned workmen and  

the  Corporation  to  the  Tribunal  which  rightly  

adjudicated point (i) of the dispute (supra) on the  

basis  of  the  facts,  circumstances  and  evidence  on  

record and passed an award dated 26.5.1999 directing  

the  Corporation  that  the  services  of  the  concerned  

workmen should be regularised with effect from the date  

on which all of them completed 480 days, subsequent to  

their appointment by the memorandum of appointment. The  

contention urged on behalf of the Corporation that the  

Tribunal has no power to pass such an award compelling  

the  Corporation  to  regularise  the  services  of  the  

concerned workmen is wholly untenable in law. Even if

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we consider the same, the said contention is contrary  

to the legal principles laid down by this Court in the  

case of  Hari Nandan Prasad  & Anr. v. Employer I/R To  

Management  of  Food  Corporation  of  India  &  Anr.6,  

wherein   the decisions in  U.P. Power Corporation  v.  

Bijli  Mazdoor  Sangh  &  Ors.  and  Maharashtra  Road  

Transport  Corporation v. Casteribe  Rajya  Parivahan  Karamchari Sanghathana  and Uma Devi  (all referred to  

supra)   were  discussed  in  detail.  The  relevant  

paragraphs are extracted hereunder:

“25. While  accepting  the  submission  of  the  appellant  therein  viz.  U.P.  Power  Corpn.,  the  Court  gave  the  following  reasons:  (U.P.  Power  Corpn. Case, SCC pp. 758-59, paras 6-8)

“6. It is true as contended by the learned  counsel for the respondent that the question  as  regards  the  effect  of  the  industrial  adjudicators’  powers  was  not  directly  in  issue in  Umadevi case. But the foundational  logic in Umadevi case 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  the  learned  counsel  for  the  respondent that at the time the High Court  decided the matter, decision in Umadevi case  was not rendered is really of no consequence.  

6  (2014) 7 SCC 190

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There  cannot  be  a  case  of  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  case the  industrial adjudicator can modify the relief,  but  that  does  not  dilute  the  observations  made by this Court in Umadevi case about the  regularisation.

8.On  facts  it  is  submitted  by  the  learned  counsel for the appellants that Respondent 2  himself admitted that he never worked as a  pump  operator,  but  was  engaged  as  daily  labourer on daily-wage basis. He also did not  possess  the  requisite  qualification.  Looked  at  from  any  angle,  the  direction  for  regularisation, as given, could not have been  given  in  view  of  what  has  been  stated  in  Umadevi case.”

It  is  clear  from  the  above  that  the  Court  recognized  the  underlying  message  contained  in  Umadevi case to the effect that regularisation of  a daily-wager, who has not been appointed after  undergoing the proper selection procedure, etc.  is impermissible as it was violative of Article  14  of  the  Constitution  of  India  and  this  principle predicated on Article 14 would apply to  the Industrial Tribunal as well inasmuch as there  cannot  be  any  direction  to  regularise  the  services of a workman in violation of Article 14  of  the  Constitution.  As  we  would  explain  hereinafter, this would mean that the Industrial  Court  would  not  issue  a  direction  for  23regularising  the   services  of  a  daily-wage  worker in those cases where such regularisation  would tantamount to infringing the provisions of  Article 14 of the Constitution. But for that, it  would not deter the Industrial Tribunals/Labour  Courts  from  issuing  such  direction,  which  the  industrial adjudicators otherwise possess, having

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regard  to  the  provisions  of  the  Industrial  Disputes Act specifically conferring such powers.  This is    24  recognized by the Court even in the    aforesaid judgment.           

 XXX          XXX                XXX

30. Detailed reasons are given in support of the  conclusion  stating  that  the  MRTU  and  PULP  Act  provides for and empowers the Industrial/Labour  Courts to decide about the unfair labour practice  committed/being  committed  by  any  person  and  to  declare a particular practice to be unfair labour  practice if it so found and also to direct such  person  to  cease  and  desist  from  unfair  labour  practice. The provisions contained in Section 30  of the MRTU and PULP Act giving such a power to  the  Industrial  and  Labour  Courts  vis-à-vis  the  ratio of  Umadevi  are explained by the Court in  the following terms: (Maharashtra SRTC case, SCC  pp. 573-74, paras 32-33 & 36)

“  32  . The power given to the Industrial and    Labour Courts under Section 30 is very wide  and the affirmative action mentioned therein  is inclusive and not exhaustive. Employing  badlis,  casuals  or  temporaries  and  to  continue them as such for years, with the  object of depriving them of the status and  privileges  of  permanent  employees  is  an  unfair labour practice on the part of the  employer under Item 6 of Schedule IV. Once  such unfair labour practice on the part of  the employer is established in the complaint,  the  Industrial  and  Labour  Courts  are  empowered  to  issue  preventive  as  well  as  positive direction to an erring employer.

33  . The provisions of the MRTU and PULP Act    and the powers of the Industrial and Labour  Courts provided therein were not at all under  consideration  in    Umadevi  .  As  a  matter  of    fact,  the  issue  like  the  present  one

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pertaining to unfair labour practice was not  at all referred to, considered or decided in  Umadevi  .    Unfair labour practice   on the part    of  the  employer  in  engaging  employees  as  badlis,  casuals  or  temporaries  and  to  continue  them  as  such  for  years  with  the  object of depriving them of the status and  privileges of permanent employees as provided  in Item 6 of Schedule IV and the power of the  Industrial and  Labour Courts under Section  30 of the Act did not fall for adjudication  or  consideration  before  the  Constitution  Bench.

       XXX      XXX          XXX

36. Umadevi   does not denude the Industrial    and Labour Courts of their statutory power  under Section 30 read with Section 32 of the  MRTU and PULP Act to order permanency of the  workers  who  have  been  victims  of  unfair  labour practice on the part of the employer  under Item 6 of Schedule IV where the posts  on  which  they  have  been  working  exist.  Umadevi    cannot be held to have overridden    the  powers  of  the  Industrial  and  Labour  Courts  in  passing  appropriate  order  under  Section 30 of the MRTU and the PULP Act,  once unfair labour practice on the part of  the employer under Item 6 of Schedule IV is  established.”

          XXX           XXX          XXX

33. In this backdrop, the Court in  Maharashtra  SRTC case was of the opinion that the direction  of the Industrial Court to accord permanency to  these  employees  against  the  posts  which  were  available,  was  clearly  permissible  and  within  the  powers,  statutorily  conferred  upon  the  Industrial/Labour Courts under Section 30(1)(b)  of the MRTU and PULP Act, 1971 which enables the  industrial  adjudicator  to  take  affirmative  action against the erring employer and as those

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powers  are  of  wide  amplitude  abrogating  (sic  including)  within  their  fold  a  direction  to  accord permanency.”

(emphasis laid by this Court)  

27. Further, it is very clear from the facts that all the  

concerned workmen have got the qualifications required for  

their  regularisation,  except  one  of  them  and  have  been  

employed by the Corporation even prior to  1985 in the  

posts through various irregular means. The Tribunal has got  

every power to adjudicate an industrial dispute and impose  

upon the employer new obligations to strike a balance and  

secure industrial peace and harmony between the employer  

and workmen and ultimately deliver social justice which is  

the  constitutional  mandate  as  held  by  the  

Constitution  Bench  of  this  Court  in  a  catena  of  cases.  

This  above  said  legal  principle  has  been  laid  

down  succinctly  by  this  Court  in  the  case  of  

The Bharat  Bank  Ltd.,  Delhi  v.  The  Employees  of  the  

Bharat Bank Ltd., Delhi &  the Bharat Bank Employee’s  

Union, Delhi7, the relevant paragraph of the said case  

is extracted hereunder:

“61.We would not examine the process by which  an Industrial Tribunal comes to its decisions  and I have no hesitation in holding that the  process employed is not judicial process at  

7  AIR 1950 SC 188

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all.  In  settling  the  disputes  between  the  employers and the workmen, the function of the  Tribunal is not confined to administration of  justice in accordance with law. It can confer  rights and privileges on either party which it  considers reasonable and proper, though they  may not be within the terms of any existing  agreement. It has not merely to interpret or  give  effect  to  the  contractual  rights  and  obligations of the parties. It can create new  rights and obligations between them which it  considers  essential  for  keeping  industrial  peace. An industrial dispute as has been said  on many occasions is nothing but a trial of  strength between the employers on the one hand  and the workmen's organization on the other  and the Industrial Tribunal has got to arrive  at  some  equitable  arrangement  for  averting  strikes and lock-outs which impede production  of goods and the industrial development of the  country.  The  Tribunal  is  not  bound  by  the  rigid rules of law. The process it employees  is rather an extended form of the process of  collective  bargaining  and  is  more  akin  to  administrative than to judicial function. In  describing the true position of an Industrial  Tribunal in dealing with labour disputes, this  Court in Western India Automobile Association  v.  Industrial  Tribunal,  Bombay,  and  others[1949] F.C.R. 321 quoted with approval a  passage from Ludwig Teller's well known work  on  the  subject,  where  the  learned  author  observes that

"industrial arbitration may involve the  extension  of  an  existing  agreement  or  the making of a new one or in general  the  creation  of  new  obligations  or  modification  of  old  ones,  while  commercial  arbitration  generally  concerns  itself  with  interpretation  of  existing  obligations  and  disputes  relating to existing agreements."

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The views expressed in these observations were  adopted in its entirety by this Court. Our  conclusion, therefore, is that an Industrial  Tribunal formed under the Industrial Disputes  Act  is  not  a  judicial  tribunal  and  its  determination is not a judicial determination  in the proper sense of these expressions.”

It has been further held by this Court in the case of  

Life Insurance Corporation Of India v. D. J. Bahadur &  

Ors.8, as follows:

“22. The Industrial Disputes Act is a benign  measure,  which  seeks  to  pre-empt  industrial  tensions,  provide  the  mechanics  of  dispute  resolutions  and  set  up  the  necessary  infrastructure, so that the energies of the  partners in production may not be dissipated  in  counter-productive  battles  and  the  assurance of industrial justice may create a  climate of goodwill….”  

Thus, the powers of an Industrial Tribunal/Labour Court  

to adjudicate the industrial dispute on the points of  

dispute referred to it by the appropriate government  

have been well established by the legal principles laid  

down by this Court in a catena of cases referred to  

supra. Therefore, the Tribunal has rightly passed an  

award  directing  the  Corporation  to  regularise  the  

services of the concerned workmen.

8  (1981) 1 SCC 315

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28. Whether the appointment of the concerned workmen  

in  the  services  of  the  Corporation  is  irregular  or  

illegal?

      In the case on hand, the concerned workmen were  

employed  by  the  Corporation  initially  through  

contractors.  Thereafter,  on  issuance  of  notification  

dated 08.12.1976 by the Central Government  abolishing  

contract  labour  for  the  posts  of  Watch  and  Ward,  

dusting  and  cleaning  jobs  in  the  Corporation  under  

Section 10(1) of the Contract Labour (Abolition and  

Regulation)  Act,  1970,  the  Corporation  and  the  

concerned workmen arrived at a settlement under Section  

18(1) of the Act, wherein a Co-operative Society was  

formed  in  the  name  of  ‘Thai  Security  Service  

Priyadarshini  Indira  Cooperative  Society’  for  their  

welfare, thus dispensing with intermediary contractors.  

During the pendency of the sanction from the Central  

Government  of  the  alleged  “Policy  decision”,  the  

concerned  workmen  were  appointed  directly  from  

13.1.1988  to  29.2.1988  and  thereafter,  they  were  

employed  continuously  without  written  orders  by  the  

Corporation.   It  is  the  contention  of  the  learned

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senior counsel on behalf of the Corporation that the  

services of the concerned workmen cannot be regularised  

as  their  appointment  was  originally  and  initially  

through contractors and thereafter, without following  

any  procedure  of  selection  and  appointment  as  per  

the  Recruitment  Rules  and  therefore,  the  same  is  

illegal  by placing reliance on the decision of this  

Court in para 43 of  Uma Devi case (supra). Further,  

this  Court  in  the  case  of  Ajaypal  Singh  v. Haryana  

Warehousing Corporation9 opined that when a workman is  

initially appointed in violation of Articles 14 and 16  

of the Constitution of India, then the employer at the  

time of re-employment of the retrenched workman cannot  

take  the  plea  that  the  initial  appointment  was  in  

violation  of  the  abovementioned  provisions.  The  

relevant paragraph  of the Ajaypal Singh case(supra) is  

extracted hereunder:

“19.  The  provisions  of  Industrial  Disputes  Act  and  the  powers  of  the  Industrial  and  Labour Courts provided therein were not at  all  under  consideration  in  Umadevi's  case.  The  issue  pertaining  to  unfair  labour  practice was neither the subject matter for  decision  nor  was  it  decided  in  Umadevi's  case.”

9  2014(13)SCALE636

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The plea of the Corporation that the reason for not  

regularising the concerned workmen under the Certified  

Standing Orders of the Corporation is allegedly due to  

the fact that the appointment of the concerned workmen  

was  made  without  following  due  procedure  under  the  

Recruitment  Rules  and  that  their  appointments  were  

illegal. This plea cannot be accepted by us in view of  

the legal principle laid down by this Court in the  

above decision, wherein it is clearly laid down that  

the Corporation cannot deny the rights of the workmen  

by taking the plea that their initial appointment was  

contrary to Articles 14 and 16 of the Constitution.

29. It is also contended on behalf of the Corporation  

that the right to be considered for regularisation by  

the Corporation as provided under Clause 2(ii) of the  

Certified Standing Orders of the Corporation does not  

mean  right  to  regularisation  and  the  discretion  to  

regularise the workmen is with the Corporation as the  

same has to be exercised keeping in mind the interest  

of the organization by implementing the alleged “policy  

decision”  of  appointing  the  CISF  personnel  to  the  

security posts. This contention urged on behalf of the

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learned senior counsel for the Corporation cannot be  

accepted by us for the reason that even though due  

procedure was not followed by the Corporation for the  

appointment of the concerned workmen, this does not  

disentitle them of their right to seek regularisation  

of  their  services  by  the  Corporation  under  the  

provisions of the Certified Standing Orders, after they  

have  rendered  more  than  240  days  of  service  in  a  

calendar  year  from  the  date  of  the  memorandum  of  

appointment issued to each one of the concerned workmen  

in  the  year  1988.  The  alleged  “policy  decision”  to  

appoint  CISF  personnel  to  the  security  post  is  on  

deputation basis and cannot be called appointment per  

se. Whereas, the concerned workmen have acquired their  

right to be regularised under the provision of Clause  

2(ii) of the ‘Certified Standing Orders for Contingent  

Employees of the Oil and Natural Gas Commission’, which  states thus:

“2. (i) Classification of workmen.

The contingent employees of the Commission  shall hereafter be classified as :-

a)Temporary, and b)Casual

  (ii) A workman who has been on the rolls

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of the Commission and has put in not less  than 180 days of attendance in any period  of  12  consecutive  months  shall  be  a  temporary  workman,  provided  that  a  temporary workman who has put in not less  than 240 days of attendance in any period  of 12 consecutive months and who possesses  the  minimum  qualifications  prescribed  by  Commission may be considered for conversion  as regular employee.

   (iii)  A  workman  who  is  neither  temporary nor regular shall be considered  as casual workman.”

30. The above emphasised portion of Clause 2(ii) of  

the Certified Standing Orders states that a temporary  

workman  who  has  put  in  not  less  than  240  days  of  

attendance  in any calendar period of 12 consecutive  

months, which is actually contrary to the provision  

under Section 25B(2)a of the Act, which states that a  

workman shall be deemed to be in continuous service  

under an employer for a period of one year, if the  

workman,  during  a  period  of  twelve  calendar  months  

preceding the date with reference to which calculation  

is to be made, has actually worked under the employer  

for not less than one hundred and ninety days in the  

case of a workman employed below ground in a mine and  

two hundred and forty days in any other case. In any  

case,  it  is  clear  that  the  concerned  workmen  have

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clearly  completed  more  than  240  days  of  services  

subsequent to the memorandum of appointment issued by  

the Corporation in the year 1988 in a period of twelve  

calendar  months,  therefore,  they  are  entitled  for  

regularisation of their services into permanent posts  

of  the  Corporation  as  per  the  Act  as  well  as  the  

Certified Standing Orders of the Corporation.

31.  It  is  the  contention  of  the  learned  senior  

counsel on behalf of the Corporation that the policy  

decision  to  induct  the  CISF  for  the  purpose  of  

providing  security  to  its  projects passed  by  the  

Corporation is an act by the Central Government under  

Section 30A of the Oil and Natural Gas Commission Act,  

1959 (for short ‘the ONGC Act’), which the Parliament  

by  way  of  enactment  No.23  of  1977  inserted  after  

Section 30 of the principle Act. The said provision  

states  that  the  Corporation  shall  be  bound  by  such  

directions, including directions regarding reservation  

of posts for Scheduled Castes and the Scheduled Tribes,  

as the Central Government may from time to time, for  

reasons  to  be  recorded  in  writing,  give  to  the  

Corporation in respect of its affairs.

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32. For the Corporation to implement such a provision  

which affects the service conditions of its employees,  

it is necessary for the Corporation to first modify the  

Certified Standing Orders by following the procedure  

provided under Section 10 of the Industrial Employment  

(Standing Orders) Act, 1946 as the same is a Special  

enactment and therefore, prevails over the provisions  

under  the  ONGC  Act  and  Recruitment  Rules.  The  

Corporation  undisputedly  has  not  made  any  such  

modification  to  its  Certified  Standing  Orders  by  

following the procedure for modification of conditions  

of  service as  per  Section  10  of  the  Industrial  

Employment (Standing Orders) Act, 1946.  The scope of  

the  said act has been succinctly laid down by this  

Court in the case of The U.P. State Electricity Board &  

Anr. v. Hari Shankar Jain & Ors.10, upon which decision  

the learned senior counsel Mr. C.U. Singh has rightly  

placed reliance, the relevant paragraphs of the said  

case are extracted hereunder:

6. Let  us  now  examine  the  various  statutory  provisions in their proper context with a view  to resolve the problem before us. First, the  Industrial  Employment  (Standing  Orders)  Act,  1946. Before the passing of the Act, conditions  

10  (1978) 4 SCC 16

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of  service  of  industrial  employees  were  invariably  ill-defined  and  were  hardly  ever  known with even a slight degree of precision to  the  employees.  There  was  no  uniformity  of  conditions of service for employees discharging  identical  duties  in  the  same  establishment.  Conditions of service were generally ad-hoc and  the result of oral arrangements which left the  employees at the mercy of the employer. With  the growth of the trade union movement and the  right  of  collective  bargaining,  employees  started putting forth their demands to end this  sad and confusing state of affairs. Recognising  the rough deal that was being given to workers  by  employers  who  would  not  define  their  conditions of service and the inevitability of  industrial  strife  in  such  a  situation,  the  legislature  intervened  and  enacted  the  Industrial Employment (Standing Orders) Act. It  was  stated  in  the  statement  of  objects  and  reasons:

“Experience  has  shown  that  ‘Standing  Orders’,  defining  the  conditions  of  recruitment,  discharge,  disciplinary  action, holidays, leave etc., go a long  way towards minimising friction between  the management and workers in industrial  undertakings. Discussion on the subject  at  the  tripartite  Indian  Labour  Conferences  revealed  a  consensus  of  opinion  in  favour  of  legislation.  The  Bill  accordingly  seeks  to  provide  for  the framing of ‘Standing Orders’ in all  industrial establishments employing one  hundred and more workers.”

It was, therefore, considered, as stated in the  preamble  “expedient  to  require  employers  in  industrial  establishments  to  define  with  sufficient  precision  the  conditions  of  employment  under  them  and  to  make  the  said  conditions known to workmen employed by them”.  The scheme of the Act, as amended in 1956 and  as it now stands, requires every employer of an

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industrial establishment as defined in the Act  to  submit  to  the  Certifying  Officer  draft  Standing  Orders, that  is, “Rules  relating to  matters set out in the Schedule”, proposed by  him  for  adoption  in  his  industrial  establishment. This is mandatory. It has to be  done within six months after the commencement  of the Act. Failure to do so is punishable and  is further made a continuing offence. The draft  Standing  Orders  are  required  to  cover  every  matter set out in the schedule. The Schedule  enumerates the matters to be provided in the  Standing Orders and they include classification  of workmen, shift working, attendance and late  coming,  leave  and  holidays,  termination  of  employment,  suspension  or  dismissal  for  misconduct,  means  of  redress  for  wronged  workmen  etc.  Item11  of  the  Schedule  is  “Any  other  matter  which  may  be  prescribed”.  By  a  notification  dated  November  17,  1959  the  Government of Uttar Pradesh has prescribed “Age  of  superannuation  or  retirement,  rate  of  pension  or  any  other  facility  which  the  employer may like to extend or may be agreed  upon between the parties” as a matter requiring  to  be  provided  in  the  Standing  Orders.  On  receipt of the draft Standing Orders from the  employee, the Certifying Officer is required to  forward a copy of the same to the trade union  concerned  or  the  workmen  inviting  them  to  prefer  objections,  if  any.  Thereafter  the  Certifying  Officer  is  required  to  give  a  hearing to the employer and the trade union or  workmen  as  the  case  may  be  and  to  decide  “whether or not any modification of or addition  to  the  draft  submitted  by  the  employer  is  necessary to render the draft Standing Orders  certifiable under the Act”. Standing Orders are  certifiable under the Act only if provision is  made therein for every matter set out in the  schedule, if they are in conformity with the  provisions  of  the  Act  and  if  the  Certifying  Officer  adjudicates  them  as  fair  and  reasonable. The Certifying Officer is invested  with  the  powers  of  a  civil  court  for  the

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purposes  of  receiving  evidence,  administering  oaths,  enforcing  the  attendance  of  witnesses  etc. etc. The order of the Certifying Officer  is  subject  to  an  appeal  to  the  prescribed  Appellate  Authority.  The  Standing  Orders  as  finally certified are required to be entered in  a  register  maintained  by  the  Certifying  Officer.  The  employer  is  required  to  prominently post the Certified Standing Orders  on special boards maintained for that purpose.  This is the broad scheme of the Act. The Act  also  provides  for  exemptions.  About  that,  later.  The  Act,  as  originally  enacted,  precluded  the  Certifying  Officer  from  adjudicating  upon  the  fairness  or  reasonableness  of  the  Draft  Standing  Orders  submitted  by  the  employer  but  an  amendment  introduced in 1956 now casts a duty upon the  Certifying  Officer  to  adjudicate  upon  the  fairness  or  reasonableness  of  the  draft  Standing Orders. The scheme of the Act has been  sufficiently  explained  by  this  Court  in  Associated Cement Co. Ltd. v.P.D. Vyas3, Rohtak  Hissar District Electricity Supply Co. Ltd. v.  State of U.P., and Western India Match Co. Ltd.  v. Workmen. The Industrial Employment (Standing  Orders) Act is thus seen to be an Act specially  designed to define the terms of employment of  workmen in industrial establishments, to give  the workmen a collective voice in defining the  terms of employment and to subject the terms of  employment  to  the  scrutiny  of  quasi-judicial  authorities by the application of the test of  fairness  and  reasonableness.  It  is  an  Act  giving  recognition  and  form  to  hard-won  and  precious  rights  of  workmen.  We  have  no  hesitation in saying that it is a special Act  expressly  and  exclusively  dealing  with  the  schedule-enumerated  conditions  of  service  of  workmen in industrial establishments.

     XXX           XXX            XXX

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10. We have already shown that the Industrial  Employment (Standing Orders) Act is a special  Act dealing with a specific subject, namely the  conditions  of  service,  enumerated  in  the  schedule,  of  workmen  in  industrial  establishments.  It  is  impossible  to  conceive  that  Parliament  sought  to  abrogate  the  provisions  of  the  Industrial  Employment  (Standing  Orders)  Act  embodying  as  they  do  hard-won  and  precious  rights  of  workmen  and  prescribing as they do an elaborate procedure,  including a quasi-judicial determination, by a  general,  incidental  provision  like  Section  79(c) of the Electricity (Supply) Act.  It is  obvious that Parliament did not have before it  the  Standing  Orders  Act  when  it  passed  the  Electricity  Supply  Act  and  Parliament  never  meant that the Standing Orders Act should stand  pro  tanto  repealed  by  Section  79(  c  )  of  the    Electricity Supply Act. We are clearly of the  view that the provisions of the Standing Orders  Act  must  prevail  over  Section  79(  c  )  of  the    Electricity Supply Act, in regard to matters to  which the Standing Orders Act applies.

   XXX           XXX              XXX

13. Next, we turn to the submission based on  the notification made under Section 13-B of the  Standing  Orders  Act.  Section  13-B  reads  as  follows:

“  13-B. Nothing in this Act shall apply to    an industrial establishment in so far as  the workmen employed therein are persons  to whom the Fundamental and Supplementary  Rules,  Civil  Services  (Classification,  Control and Appeal) Rules, Civil Services  (Temporary Service) Rules, Revised Leave  Rules,  Civil  Service  Regulations,  Civilians  in  Defence  Service  (Classification,  Control  and  Appeal)  Rules or the Indian Railway Establishment  Code  or  any  other  rules  or  regulations

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that may be notified in this behalf by  the  appropriate  Government  in  the  Official Gazette, apply.”

(emphasis laid by this Court)

33.  In view of the legal principles laid down by this  

Court  in  the  above  said  case,  the  alleged  policy  

decision taken under Section 30A of the ONGC Act does  

not prevail over the Standing Orders Act framed under  

the Industrial Employment (Standing Orders) Act, 1946,  

which is the Special Enactment. Therefore, the alleged  

“policy decision” taken by the Corporation is neither  

valid in law nor applicable in the case on hand. The  

legal principle laid down in the case of   The U.P.  

State Electricity Board & Anr.  v. Hari Shankar Jain  

were reiterated by this Court in the case of  Sudhir  

Chandra  Sarkar  v. Tata  Iron  and  Steel  Co.  Ltd.  &  

Ors.11, wherein it was held thus:

“The  Parliament  enacted  the  Industrial  Employment (Standing Orders) Act, 1946 ('1946  Act'  for  short).  The  long  title  of  the  Act  provides  that  it  was  an  act  to  require  employers in industrial establishments formally  to define conditions of employment under them.  The preamble of the Act provides that it is  expedient  to  require  employers  in  industrial  establishments  to  define  with  sufficient  precision  the  conditions  of  employment  under  them and to make the said conditions known to  workmen employed by them. By Section 3, a duty  

11  (1984) 3 SCC 369

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this regard:

“421.  Security  Arrangements  in  Public  Enterprises: Ministries etc. are aware that a force called  the  Central  Industrial  Security  Force  has  been constituted under the Ministry of Home  Affairs  for  the  security  of  industrial  undertakings of the Central Government.  

  The  question  of  evolving  a  uniform  procedure in regard to the deployment of the  Force and in providing security arrangements  in the various undertakings has been under  consideration of the Government particularly  with a view to ensuring better coordination  between  the  I.G.C.I.S.F.  and  the  administrative Ministries/Public Enterprises.  It has been decided that the following steps  should be taken in this regard:

(i)    There  should  be  close  Association between CISF and a Public  Enterprise, right from its inception.  In  other  words  as  soon  as  a  new  Enterprise  is  sanctioned,  information  about  such  sanction  should  be  sent  automatically to the I.G.,C.I.S.F. so  that he can start liaison from the very  outset, with the concerned officials in  the  Ministry  concerned  and  the  Chief  Executive of the project as soon as he  is appointed.

(ii)    No  new  Enterprise  should  appoint its own Watch and Ward Security  staff, even during construction stage  unless  a  clearance  has  been  obtained  from the I.G.,C.I.S.F. that he is not  in a position to take over the security  functions  of  the  Enterprise  from  the  very beginning.

(iii)     Whenever  an  investment  decision is cleared at the level of the

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Public Investment Board an intimation  that such a project has been cleared,  should be sent to I.G.,C.I.S.F.  

Ministries etc. are to take necessary action  accordingly.

422.  Security  Arrangements  in  Public  Enterprises: The DIG CISF in a recent communication to the  Bureau of Public Enterprises has pointed out  that  a  number  of  undertaking  have  been  employing their own Watch and Ward personnel  without obtaining clearance from CISF Hqrs.,  in contravention of the Guidelines issued vide  BPE  O.M.  No.2(97)/72-BPE(GM-I)  dated  5th  December, 1972.

  It is once again reiterated that it is the  statutory duty not only of the CISF but also  of the Public Sector Undertakings to induct  CISF for better protection and security of the  industrial undertakings.

   The administrative Ministries may impress  upon  the  public  units  under  their  administrative  control  not  covered  in  the  enclosed list (not given here), the need for  the early induction of the CISF force in the  units  provide  better  security  arrangements.  The units may be advised to contact IG, CISF,  183 Jor Bagh, New Delhi without any further  delay for finalising the arrangements”

35. Further,  the  learned  counsel  on  record  for  the  

Corporation has also submitted the Sanction letter for  

creation of temporary posts for the security coverage  

of  ONGC  installation  by  Central  Government,  the  

relevant portion of which is extracted hereunder:

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“To  

The Director General,  Central Industrial Security Force, 13-CGO’s Complex, Lodhi Road, New Delhi-110003.

Subject:-Creation of temporary posts for the  security  coverage  of  ONGC  installations  at  Madras,  Visakhapatnam  and  Nursapur  &  Razole  Area.

    With  reference  to  your  U.O.  No.  29013/6/85-Ind-I  dated  31.10.1985.I  am  directed  to  convey  the  sanction  of   the  

President  to  the  creation  of  the  following  temporary posts for the security coverage of  ONGC  Installations  at  Madras,  Vishakapatnam  and Nursapur & Razole Area in the existing pay  scales with usual allowances from the date(s)  and the post(s) are filled in till the  28th  February,………   ………

This issue with the concurrence of Integrated  Finance  Division  vide  their  Dy.  No.3057/85- Fin. III (D-I) dated 12.12.1985.

Yours faithfully, (N.B.Kumar)

Under Secretary to the Government of India”

36. We have perused the above two documents. The above  

mentioned sanction letter by the Central Government is  

for the creation of temporary posts for the security  

coverage of  ONGC installation and not to depute CISF  

specifically into security posts in the Corporation,

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therefore, the reliance placed on the same in support  

of the contention urged by the learned senior counsel  

on behalf of the Corporation is misplaced as the same  

is wholly untenable in law as the same is not reflected  

in the sanction letter referred to supra. Further, the  

above mentioned guidelines cannot be considered to be  

the  policy  of  the  Central  Government  as  it  is  not  

framed  in  accordance  with  the  relevant  ‘Business  

Transaction  Rules’  of  the  Central  Government.  

Therefore, we are of the considered view that even if  

for the sake of argument, the decision to employ the  

CISF personnel into security posts of the Corporation  

is  considered  as  the  policy  decision  of  the  

Corporation,  the  provision  under  Clause  2(ii)  of  

Certified Standing Orders surely overrides the policy  

decision,  as  the  said  clause  is  not  amended  by  

following  the  provisions  of  the  Act  of  1946  and  

therefore, the said argument does not hold water as the  

Certified Standing Orders of the Corporation as per the  

Judgments  of  this  Court  referred  to  supra  and  the  

principle of law laid down in those cases are aptly  

applicable  to  the  fact  situation  of  the  concerned  

workmen for their regularisation in the security posts

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of the Corporation.

37. As we have already stated that the alleged policy  

documents  produced  by  the  Corporation  as  per  the  

direction of this Court is traceable to Section 30A of  

the  ONGC  Act  enacted  by  the  Parliament  as  per  the  

contention  urged  on  behalf  of  the  Corporation.  

Therefore,  the  contention  that  the  said  Policy  is  

binding upon the Corporation and the concerned workmen  

is wholly untenable in law for more than one reason  

which we have stated above. The said document cannot be  

said to be the Policy framed by the Central Government  

represented by the Ministry of Petroleum and Natural  

Gas, which is an independent ministry having the power  

to  formulate  and  administer  various  Central  laws  

relating to Petroleum and Natural Gas, however, the  

same must be executed in the name of the President of  

India and shall be authenticated in such a manner as  

specified in the relevant ‘Business Transaction Rules’.  

In the instant case, the alleged Policy formulated by  

the Central Government has not been issued by following  

the  due  procedure  as  provided  under  the  ‘Business  

Transaction  Rules’.  For  this  reason  also,  the  said

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document  produced  by  the  learned  counsel  for  the  

Corporation  to  justify  the  alleged  Policy  being  

applicable to the concerned workmen cannot be called as  

the policy document passed under Section 30A of the Act  

by the Central Government and moreover, the same was  

not  incorporated  by  way  of  an  amendment  to  the  

Certified  Standing  Orders  of  the  Corporation  by  

following the procedure as provided under Section 10 of  

the Industrial Employment (Standing Orders) Act, 1946.

The reliance placed upon these documents by the  

Corporation in justification of their claim that the  

concerned workmen are not entitled to be regularised in  

their services as permanent employees in their posts as  

per the award passed by the Tribunal is misplaced and  

wholly untenable in law. Therefore, the same cannot be  

accepted by this Court. Hence, the said contention is  

liable to be rejected and is accordingly rejected.

38. Further, it was contended by the learned senior  

counsel  that  the  Certified  Standing  Orders  of  the  

Corporation do not apply to the concerned workmen to  

claim  regularisation  in  their  posts  as  regular  

employees  as  provided  under  Clause  2(ii)  of  the

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Certified Standing Orders of the Corporation. The said  

contention is wholly untenable in law as the Standing  

Orders  of  the  Corporation  certainly  apply  to  the  

concerned workmen as they have been rendering their  

services  in  the  Corporation  even  prior  to  the  year  

1985,  being  appointed  through  contractors,  the  Co-

operative  Society  and  directly  thereafter  vide  

memorandum of appointment in the year 1988 by issuing  

appointment orders on different dates during that year  

on the condition that the Certified Standing Orders of  

the  ONGC  will  not  be  applicable  to  them.  Such  a  

condition incorporated in the appointment orders issued  

to the concerned workmen is not valid in law and the  

same is void for the reason that they are workmen for  

the  purpose  of  the  Certified  Standing  Orders  and  

therefore, the above said condition has to be ignored.  

When the concerned workmen were appointed by issuing  

the memorandum of appointment to work in the posts of  

the Corporation, providing them with monthly salaries,  

it cannot arbitrarily and unilaterally state that the  

Certified Standing Orders of the Corporation are not  

applicable  to  the  concerned  workmen.  The  concerned  

workmen cannot be denied their legitimate, statutory

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and fundamental right to be regularised in their posts  

as  provided  under  Clause  2  (ii)  of  the  Certified  

Standing  Orders  on  the  basis  of  the  above  said  

contention urged on their behalf and also because the  

Corporation  did  not  follow  the  due  procedure  as  

provided under the Appointment and Recruitment Rules  

for  appointment  of  the  concerned  workmen  in  the  

Corporation. The said contention  urged by the learned  

senior  counsel  on  behalf  of  the  Corporation  is  an  

afterthought  to  justify  their  irregular  act  of  

appointing  them  as  temporary  workmen  and  continuing  

them as such for a number of years though they are  

entitled for regularisation under Clause 2(ii) of the  

Standing Orders of the Corporation, which action of it  

amounts to an unfair labour practice as defined under  

Section 2(ra) of the Act, read with the provisions of  

Sections 25T and 25U of the Act, which prohibits such  

employment in the Corporation. It would be unjust and  

unfair to deny them regularisation in their posts for  

the error committed by the Corporation in the procedure  

to appoint them in the posts. Further, the Corporation  

cannot use the alleged “policy decision” as a veil to  

justify its action which included inaction on its part

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in  not  regularising  the  concerned  workmen  in  their  

services under Clause 2(ii) of the Certified Standing  

Orders.

39. In light of the above said discussion and legal  

principles  laid  down  by  this  Court  in  the  cases  

referred to supra, we are of the considered view that  

the  procedure  of  appointments  adopted  by  the  

Corporation  with  respect  to  the  concerned  workmen  

initially appointed through contractors, subsequently  

through  the  Co-operative  Society,  and  then   vide  

memorandum of appointment issued to each one of the  

concerned  workmen  in  the  year  1988  and  thereafter,  

continuing them in their services in the posts by the  

Corporation  without  following  any  procedure  as  

contended by  the learned senior counsel on behalf of  

the Corporation whose contention is untenable in law  

and  their  appointment  can  be  said  as  irregular  

appointments but not as illegal as the same was not  

objected  to by any other Authority of the Corporation  

at any point of time. But their appointment in their  

posts  and  continuing  them  in  their  services  is  

definitely cannot be termed as illegal, at best it can

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be called irregular. Therefore, the Certified Standing  

Orders of the Corporation by all means apply to the  

concerned  workmen.   The  legal  contention  urged  on  

behalf  of  the  Corporation  that  the  statutory  right  

claimed by the concerned workmen under Clause 2(ii) of  

the Certified Standing Orders of the Corporation for  

regularizing them in their posts as regular employees  

after rendering 240 days of service in a calendar is  

not an absolute right conferred upon them and their  

right is only to consider their claim. This plea of the  

learned senior counsel cannot again be accepted by us  

for the reason that the Corporation is bound by law to  

take its decision to regularise the services of the  

concerned  workmen  as  regular  employees  as  provided  

under Clause 2(ii) of the Certified Standing Orders  

after their completion of 240 days of service in a  

calendar year as they have acquired valid statutory  

right. This should have been positively considered by  

the  Corporation  and  granted  the  status  of  regular  

employees of the Corporation for the reason that it  

cannot act arbitrarily and unreasonably deny the same  

especially  it  being  a  Corporate  Body  owned  by  the  

Central Government and an instrumentality of the State

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in  terms  of  Article  12  of  the  Constitution  and  

therefore,  it  is  governed  by  Part  III  of  the  

Constitution. The Corporation should exercise its power  

fairly and reasonably in accordance with law. This has  

not been done by the Corporation as per the law laid  

down by this Court in the case of Olga Tellis & Ors. v.  

Bombay Municipal Corporation and Ors.12 wherein it was  

held as under:-

“40. Just as a mala fide act has no existence  in the eye of law, even so, unreasonableness  vitiates  law  and  procedure  alike.  It  is  therefore  essential  that  the  procedure  prescribed by law for depriving a person of his  fundamental right, in this case the right to  life, must conform to the norms of justice and  fairplay. Procedure, which is unjust or unfair  in the circumstances of a case, attracts the  vice of unreasonableness, thereby vitiating the  law  which  prescribes  that  procedure  and  consequently, the action taken under it. Any  action taken by a public authority which is  invested with statutory powers has, therefore,  to  be  tested  by  the  application  of  two  standards: the action must be within the scope  of the authority conferred by law and secondly,  it must be reasonable. If any action, within  the scope of the authority conferred by law, is  found to be unreasonable, it must mean that the  procedure established by law under which that  action  is  taken  is  itself  unreasonable.  The  substance of the law cannot be divorced from  the  procedure  which  it  prescribes  for,  how  reasonable the law is, depends upon how fair is  the  procedure  prescribed  by  it.  Sir  Raymond  Evershed says that, “from the point of view of  

12  (1985)3 SCC  545

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the ordinary citizen, it is the procedure that  will most strongly weigh with him. He will tend  to  form  his  judgment  of  the  excellence  or  otherwise of the legal system from his personal  knowledge and experience in seeing the legal  machine at work”. Therefore, “He that takes the  procedural sword shall perish with the sword.”

Therefore, the concerned workmen have approached the  

Tribunal by raising an industrial dispute regarding the  

regularisation of their services in the Corporation.  

The same has been properly adjudicated by the Tribunal  

based  on  pleadings,  evidence  on  record  and  in  

accordance  with  law.  Therefore,  the  same  cannot  be  

found fault with by this Court in this appeal.

40. Further,  the  contention  urged  on  behalf  of  the  

Corporation that the concerned workmen do not possess  

the required qualifications for their respective posts,  

in this regard, we have gone through the facts recorded  

by the Courts below in comparison with the ‘Recruitment  

and Promotion Regulations, 1980 of the Oil and Natural  

Gas  Commission’  framed  and  published  with  previous  

approval of the Central Government in exercise of the  powers conferred upon it under Section 32 of the Oil  

and Natural Gas Commission Act, 1959, and we are fully  

satisfied that all of the concerned workmen barring

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just  one  of  the  concerned  workmen  have  all  the  

qualifications  required  to  be  regularised  in  the  

permanent  posts  of  the  Corporation  as  regular  

employees.

41. Further,  it  has  been  contended  by  the  learned  

senior counsel on behalf of the Corporation that in the  

absence of any plea taken by the workmen in their claim  

statement  regarding  unfair  labour  practice  being  

committed  by  the  Corporation against  the  concerned  

workmen,  the  learned  single  Judge  and  the  Division  

Bench ought not to have entertained the said plea as it  

is a well settled principle of law that such plea must  

be pleaded and established by a party who relies before  

the  Tribunal.  In  support  of  the  above  contention  

reliance was placed by him on the decision of this  

Court in  Siemens Limited & Anr.  v. Siemens Employees  

Union & Anr.13

     The said contention of the learned senior counsel  

on behalf of the Corporation is wholly untenable in law  

and  the  reliance  placed  on  the  aforesaid  case  is  

misplaced for the reason that it is an undisputed fact  

13  (2011) 9 SCC 775

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that the workmen have been appointed on term basis vide  

memorandum of appointment issued to each one of the  

concerned workmen in the year 1988 by the Corporation  

who  continued  their  services  for  several  years.  

Thereafter, they were denied their legitimate right to  

be  regularised  in  the  permanent  posts  of  the  

Corporation. The said fact was duly noted by the High  

Court as per the contention urged on behalf of the  

Corporation and held on the basis of facts and evidence  

on record that the same attracts entry Item No.10 of  

Schedule  V  of  the  Act,  in  employing  the  concerned  

workmen as temporary employees against permanent posts  

who  have  been  doing  perennial  nature  of  work  and  

continuing them as such for number of years. We affirm  

the same as it is a clear case of an unfair labour  

practice  on  the  part  of  the  Corporation  as  defined  

under Section 2(ra) of the Act, which is statutorily  

prohibited under Section 25T of the Act and the said  

action  of  the  Corporation  warrants  penalty  to  be  

imposed upon it under Section 25U of the Act. In fact,  

the said finding of fact has been recorded by both the  

learned single Judge and the Division Bench of the High  

Court in the impugned judgment on the ground urged on

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behalf of the Corporation. Even if, this Court eschews  

the said finding and reason recorded in the impugned  

judgment accepting the hyper technical plea urged on  

behalf of the Corporation that there is no plea of  

unfair labour practice made in the claim statement,  

this Court in this appeal cannot interfere with the  

award of the Tribunal and the impugned judgment and  

order of the High Court for the other reasons assigned  

by them for granting relief to the concerned workmen.  

Even in the absence of plea of an act of unfair labour  

practice  committed  by  the  Corporation  against  the  

concerned workmen, the Labour Court/High Court have got  

the power to record the finding of fact on the basis of  

the record of the conciliation officer to ensure that  

there shall be effective adjudication of the industrial  

dispute to achieve industrial peace and harmony in the  

industry in the larger interest of public, which is the  

prime object and intendment of the Industrial Disputes  

Act. This principle of law has been well established in  

a catena of cases of this Court.  In the instant case,  

the commission of an unfair labour practice in relation  

to the concerned workmen by the Corporation is ex-facie  

clear from the facts pleaded by both the parties and

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therefore, the courts have the power to adjudicate the  

same effectively to resolve the dispute between the  

parties even in the absence of plea with regard to such  

an aspect of the case.

42. For the reasons recorded in this judgment, we hold  

that  the  judgments  and  orders  of  both  the  learned  

single Judge and Division Bench of the High Court in  

favour of the concerned workmen are legal and valid.  

The High Court has rightly dismissed the appeal of the  

Corporation  by  affirming  the  award  passed  by  the  

Tribunal.  

     Therefore, this appeal must fail and accordingly,  

the same is dismissed. Since the industrial dispute  

between the parties has been litigated for the last 25  

years, it would be just and proper for this Court to  

give directions as hereunder:  

(i)   The  Corporation  is  directed  to  comply  

with  the  terms  and  conditions  of  the  award  

passed  by  the  Tribunal  and  regularise  the  

services  of  the  concerned  workmen  in  their  

posts  and  compute  the  back-wages,  monetary

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benefits  and  other  consequential  monetary  

benefits  including  terminal  benefits  payable  

to the concerned workmen on the basis of the  

periodical revision of pay scales applicable  

from the date of their entitlement, namely, by  

regularizing  them  in  their  services  after  

their completion of 240 days of service in a  

calendar year in the Corporation as provided  

under Clause 2 (ii) of the Certified Standing  

Orders, within eight weeks from the date of  

receipt of the copy of this Judgment;  

(ii)  If the Corporation fails to comply with  

the  above  given  directions,  the  back-wages  

shall be paid to the concerned workmen with an  

interest  at  the  rate  of  9%  per  annum.  The  

Corporation is further directed to submit the  

compliance report for perusal of this Court  

after  the  expiry  of  the  said  eight  weeks.  

There shall be no order as to costs.

  ………………………………………………J.                                  [V.GOPALA GOWDA]

  ………………………………………………J.

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                                [C. NAGAPPAN]     New Delhi, April 17, 2015

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ITEM NO.1A-For Judgment      COURT NO.11               SECTION XV                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Civil Appeal  No(s)........../2015 @ SLP(C) No.  5532/2012 ONGC LTD.                                          Appellant(s)                                 VERSUS PETROLEUM COAL LABOUR UNION & ORS.                 Respondent(s) Date : 17/04/2015 This matter was called on for pronouncement of  JUDGMENT today. For Appellant(s)                      M/s Arputham Aruna & Co.                       For Respondent(s)  Mr. V.N. Subramaniam, Adv.                      Mr. Satish Kumar,Adv.

Mr. Santosh Krishnan, Adv.  Mrs. Sonam Anand, Adv.

                    Mr. Deeptakirti Verma,Adv.                   

Hon'ble  Mr.  Justice  V.Gopala  Gowda  pronounced  the  judgment of the Bench comprising His Lordship and Hon'ble Mr.  Justice C. Nagappan.

Leave granted. The  appeal  is  dismissed  in  terms  of  the  signed  

Reportable Judgment.

   (VINOD KR.JHA)    (MALA KUMARI SHARMA) COURT MASTER COURT MASTER

(Signed Reportable Judgment is placed on the file)