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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 1389 OF 2015 (Arising out of SLP(C) No.33509/2011)

Oshiar Prasad and Others       Appellant(s)

VERSUS

The Employers in relation to  Management of Sudamdih  Coal Washery of M/s BCCL,  Dhanbad, Jharkhand       Respondent(s)

                 J U D G M E N T

Abhay Manohar Sapre, J.

1. Leave granted.  

2. This civil appeal is filed by the unsuccessful  

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writ  petitioners  against  the  judgment  and  order  

dated  17.06.2011  passed  by  the  High  Court  of  

Jharkhand  at  Ranchi  in  L.P.A.  No.  447  of  2009  

which  arises  out  of  the  order  dated  03.09.2009  

passed  by  the  learned  single  Judge  of  the  High  

Court in C.W.J.C. No. 616 of 1999(R).  

3. By  impugned judgment,  the  Division  Bench  

dismissed the appellants’  intra court  appeal  and  

upheld  the  order  of  the  writ  court,  which  had  

dismissed  the  appellants’  writ  petition  and  in  

consequence upheld the award dated 21.12.1998  

passed by  the Labour Court in Reference Case No.  

75 of 1995.

4. In  order  to  appreciate  the  controversy  

involved in this appeal, it is necessary to set out  

the facts in detail.  

5. The respondent - M/s Bharat Coking Coal Ltd  

(hereinafter  referred  to  as  “the  BCCL”)  is  a  

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Government of India undertaking.  It is engaged in  

the business of manufacture and sale of various  

kinds  of  coal.   It  has  a  colliery  at  Dhanbad,  

Jharkhand known as "Sudamdih Coal Washery”.

6. On 24.07.1974, the BCCL invited tenders for  

construction  of  Washery  on  Turnkey  basis  for  

running the colliery.   The contract was awarded to  

one Company - M/s MC Nelly, Bharat Engineering  

Company  Ltd.  (hereinafter  referred  to  as  “the  

Contractor").  An  agreement  was  accordingly  

executed between the BCCL and the Contractor on  

29.01.1976.  Since the execution of the work was  

to be done on turnkey basis, the Contractor was  

required to do every thing to make the Washery  

operational.   The  work  included  the  complete  

design  of  the  Washery,  supply  of  materials  

required  for  construction  of  plant,  building,  

installation of machinery, all kinds of construction  

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of the structures of Washery etc.

7. Pursuant  to  the  contract,  the  Contractor  

started  the  work  in  1977  by  employing  several  

skilled and unskilled workers and completed the  

same by December 1979. After completion of the  

work, the Contractor terminated the employment  

of all the workers and offered them retrenchment  

compensation as per the provisions of Section 25  

of Industrial Disputes Act, 1947 (in short “the Act”)  

except 39 skilled workers,  who were retained to  

look after the maintenance work of Washery after  

it  was made operationalized.   These 39 workers  

continued to work.  After retaining their services  

for about one year,  the Management terminated  

the  services  of  these  39  employees  in  January,  

1981.   These  39  employees  raised  a  dispute  

demanding  their  absorption  and  continuation  in  

service with the BCCL. Since their demands were  

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not accepted, a reference was made under Section  

10 of the Act to Industrial Tribunal No. 3 Dhanbad  

vide Reference Case No. 58 of 1981 to answer the  

following question:

“Whether  the management of  Sudamdih  Coal Washery of M/s Bharat Coking Coal  Ltd.,  P.O.  Sudamdih,  Dist.  Dhanbad  are  justified  in  not  absorbing  Sarvashri  Gorakh  Sharma  and  38  others  as  their  regular employees?  If not, to what relief  are the said workmen entitled?”

8. The  Industrial  Tribunal  by  its  award  dated  

03.03.1983  answered  the  reference  in  workers’  

favour and directed that 39 workers be absorbed  

by the BCCL in their employment as their regular  

employees  and  they  be  given  all  such  

consequential benefits to which they were entitled  

to claim due to their regularization in the services  

of BCCL.  The BCCL did not challenge the award  

and implemented the directions by absorbing and  

regularizing  these  39  workers  in  their  

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employment.

9. It  may  be  mentioned  that  five  workers  

(including the appellants herein), who claimed to  

be working in the same project, filed Title Suit No.  

51/1980 against the BCCL in the Court of Munsif  

2nd Dhanbad under Order I Rule 11 of the Code of  

Civil Procedure, 1908 for declaration that they are  

entitled  to  continue  in  their  services  under  the  

BCCL and prayed that their services be absorbed  

and regularized  in  the services  of  BCCL with  all  

consequential  benefits.  They  also  prayed  for  an  

injunction restraining the  BCCL from terminating  

their services pending civil suit.  

10. The Trial Court, however, on contest declined  

to grant the temporary injunction to the plaintiffs.  

It is not in dispute that during the pendency of the  

suit,  the  services  of  these  workers  were  

discontinued. They were, therefore, no more in the  

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employment.

11.  By judgment and decree dated 27.05.1983,  

the trial Court decreed the suit and held that the  

plaintiff's  are  entitled  to  continue  in  services  of  

BCCL.  

12. Felt  aggrieved,   the BCCL filed Title  Appeal  

No. 71 of 1983 before the Appellate Court.   The  

Appellate  Court  by  judgment  and  order  dated  

16.12.1986  dismissed  the  appeal  and  confirmed  

the judgment and decree of the Trial Court.  

13. The  BCCL  pursued  the  matter  further  and  

filed  an  appeal  being  Second  Appeal  No.23  of  

1987(R) before the High Court. The High Court, by  

judgment and order dated 05.03.1993 allowed the  

Second Appeal  and  set  aside  the  judgment  and  

decree of the two Courts which had decreed the  

plaintiffs’  suit.  It  was held that  the suit  was not  

maintainable in  the light  of  provisions of  Labour  

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laws.

14. Against the aforesaid judgment, the plaintiffs  

(workers) filed Special Leave Petition being Special  

Leave Petition  (C)  No.  4495 of  1994 before  this  

Court.   By  order  dated  14.11.1994,  this  Court,  

after  granting  leave,  dismissed  the  appeal  (C.A.  

No.8403/1994)  with  a  liberty  to  the  

plaintiffs/appellants  to  approach  the  Industrial  

Tribunal for claiming any appropriate relief,  if  so  

advised.  

15. It is with this background, the plaintiffs (five  

workers)  approached  the  Central  Government  

under Section 10 of the Act and also on behalf of  

as many as 150 workers espousing their cause in  

representative  capacity  for  their  absorption  and  

regularization and prayed for making an industrial  

reference  to  the  Industrial  Tribunal  for  its  

adjudication.  The  Government  acceded  to  their  

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request  and  accordingly  made  the  following  

reference to the Industrial Tribunal to adjudicate:

“Whether  the management of  Sudamdih  Coal Washery of M/s Bharat Coking Coal  Ltd.,  P.O. Sudamdih,  Dist.  Dhanbad are  justified  in  not  absorbing  Ainuel  Haque  and 150 others (as in the list annexed) as  their  regular employees? If  not,  to what  reliefs are the said workmen entitled?”

16. The  Industrial  Tribunal  by  award  dated  

21.12.1998  answered  the  reference  against  the  

workers.  It was held that they were not entitled to  

seek their absorption in the Services of BCCL as  

their  regular  employees.  The  workers,  felt  

aggrieved, filed C.W.J.C.No. 616 of 1999(R) before  

the High Court.  The learned single Judge by orders  

dated 03.09.2009 dismissed the writ petition and  

upheld  the  award  passed  by  the  Tribunal.  The  

workers pursued the matter and filed intra Court  

appeal being L.P.A. No. 447 of 2009.  The Division  

Bench  by  impugned  judgment  dismissed  the  

appeal finding no fault in the award. Challenging  

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the  said  order,  the  workers  filed  this  appeal  by  

way of special leave before this Court.

17. While assailing the legality and correctness of  

the  impugned  judgment,  Mr.  R.P.  Bhatt,  learned  

Senior  Counsel  for  the  appellants  mainly  urged  

two  points.  His  first  submission  was  that  the  

Courts below erred in not answering the reference  

in  favour  of  the  appellants  and  thereby  Courts  

below  erred  in  not  granting  them  the  relief  for  

which  the  reference  was  made.   His  second  

submission was that since the identical reference  

(Reference  Case  No.58/1981)  made  at  the  

instance  of  39  workers  alike  the  appellants  was  

answered  in  workers’  favour  vide  award  dated  

03.03.1983, a fortiori, the present reference being  

identical  in  nature  should  also  have  been  

answered in favour of the appellants  to maintain  

the parity. In other words, the submission was that  

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if one set of workers got the benefit earlier in point  

of time from the Court, the other set of workers  

similarly placed too should have been granted the  

same benefits.  In the alternative, learned Senior  

Counsel  urged that  in  any event,  the appellants  

were not paid any retrenchment compensation, for  

which otherwise they were entitled to get from the  

Contractor  or/and BCCL as  per  the provisions  of  

Section 25 of the Act read with the provisions of  

Contract  Labour Prohibition and Regulation  Act,  

1970 and hence to this extent, this Court can still  

direct either Contractor or the BCCL or both, as the  

case  may  be,  to  pay  the  retrenchment  

compensation to the appellants.  

18. In  Contra,  learned  Counsel  for  the  

respondent-BCCL  supported  the  impugned  order  

and contended that no case is made out by the  

appellants to interfere in the impugned order and  

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hence the appeal merits dismissal.

19. Having  heard  the  learned  counsel  for  the  

parties and on perusal of the record of the case,  

we find no merit in the main submissions of the  

appellants  but  find  substance  in  the  alternative  

submission.

20. Before we examine the factual matrix of the  

case in hand, we consider it apposite to take note  

of  law  laid  down  by  this  Court  regarding  the  

powers of the appropriate Government in making  

reference  under  Section  10  of  the  Act  and  the  

jurisdiction  of  the  Tribunal  while  answering  the  

reference.  Indeed it is well settled and remains no  

more res integra.

21. One  of  the  questions  which  fell  for  

consideration  by  this  Court  in  Delhi  Cloth and  

General Mills Co. Ltd. vs.  The Workmen and  

Others (AIR 1967 SC 469) was that what are the  

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powers  of  the  appropriate  Government  while  

making a reference and the scope and jurisdiction  

of Industrial Tribunal under Section 10 of the Act.  

22. Justice Mitter, speaking for the  Bench, held  

as under:

“(8) ……Under S. 10(1)(d) of the Act, it is  open to the appropriate Government when  it is of opinion that any industrial dispute  exists to make an order in writing referring  "the dispute or any  matter appearing to be  connected with, or relevant to the dispute, …..to a Tribunal for adjudication" under s.  10(4)  "where in an order referring an industrial  dispute  to  a  Labour  Court,  Tribunal  or  National Tribunal under this section or in a  subsequent  order,  the  appropriate  Government  has  specified  the  points  of  dispute for adjudication, the Labour Court  or the Tribunal or the National Tribunal, as  the  case  may  be,  shall  confine  its  adjudication  to  those  points  and  matters  incidental thereto."  

(9)  From  the  above  it  therefore  appears  that  while  it  is  open  to  the  appropriate  Government  to  refer  the  dispute  or  any  matter  appearing  to  be  connected  therewith  for  adjudication,  the  Tribunal  must confine its adjudication to the points  of dispute referred and matters incidental  

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thereto. In other words, the Tribunal is not  free  to  enlarge  the  scope  of  the  dispute  referred to it but must confine its attention  to  the  points  specifically  mentioned  and  anything  which  is  incidental  thereto.  The  word  'incidental'  means  according  to  Webster's New World Dictionary :  "happening or likely to happen as a result  of  or  in  connection  with  something  more  important;  being  an  incident;  casual;  hence,  secondary  or  minor,  but  usually  associated :"  

"Something incidental  to a dispute"  must  therefore mean something happening as a  result of or in connection with the dispute  or associated with the dispute. The dispute  is the fundamental thing while something  incidental  thereto  is  an  adjunct  to  it.  Something  incidental,  therefore,  cannot  cut at the root of the main thing to which it  is an adjunct to it…..”

23. The  same  issue  came  up  for  consideration  

before  three  Judge  Bench  in  a  case  reported  in  

Pottery  Mazdoor  Panchayat vs.  Perfect  

Pottery  Co.  Ltd.  and  Another, (1979)  3  SCC  

762.   Justice Y.V. Chandrachud - the learned Chief  

Justice  speaking  for  the  Court  laid  down  the  

following proposition of law:

“10. Two  questions  were  argued  before  

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the  High  Court:  Firstly,  whether  the  tribunals had jurisdiction to question the  propriety  or  justification  of  the  closure  and  secondly,  whether  they  had  jurisdiction  to  go  into  the  question  of  retrenchment  compensation.  The  High  Court has held on the first question that  the  jurisdiction  of  the  Tribunal  in  industrial disputes is limited to the points  specifically  referred  for  its  adjudication  and  to  matters  incidental  thereto  and  that  the  Tribunal  cannot  go beyond  the  terms of the reference made to it. On the  second  question  the  High  Court  has  accepted  the  respondent’s  contention  that  the  question  of  retrenchment  compensation  has  to  be  decided  under  Section 33-C(2) of the Central Act. 11. Having  heard  a  closely  thought  out  argument made by Mr. Gupta on behalf of  the appellant, we are of the opinion that  the High Court is right in its view on the  first  question.  The  very  terms  of  the  references show that the point of dispute  between the parties was not the fact of  the  closure  of  its  business  by  the  respondent  but  the  propriety  and  justification of the respondent’s decision  to close down the business.  That is why  the  references  were  expressed  to  say  whether  the  proposed  closure  of  the  business  was  proper  and  justified.  In  other  words,  by  the  references,  the  Tribunals  were  not  called  upon  by  the  Government  to  adjudicate  upon  the  question as to whether there was in fact a  closure of business or whether under the  pretence  of  closing  the  business  the  workers  were  locked  out  by  the  management.  The  references  being  limited  to  the  narrow  question  as  to  whether  the  closure  was  proper  and  

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justified, the Tribunals by the very terms  of  the references,  had no jurisdiction to  go behind the fact of closure and inquire  into  the  question  whether  the  business  was  in  fact  closed  down  by  the  management.”

24. The  abovesaid  principle  of  law  has  been  

consistently reiterated in  M/s Firestone Tyre &  

Rubber Co. of India (P) Ltd. vs. The Workmen  

Empoloyed,  represented  by  Firestone  Tyre  

employees’ Union AIR 1981 SC 1626,  National  

Engineering  Industries  Ltd. vs.  State  of  

Rajasthan & Ors., (2000) 1 SCC 371,  Mukand  

Ltd. vs. Mukand Staff & Officers’ Association,  

(2004) 10 SCC 460 and  State Bank of Bikaner  

& Jaipur vs. Om Prakash Sharma, (2006) 5 SCC  

123.

25. It  is  thus  clear  that  the  appropriate  

Government  is  empowered to  make a  reference  

under Section 10 of the Act only when "Industrial  

dispute  exists"  or  “is  apprehended  between  the  

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parties”. Similarly, it is also clear that the Tribunal  

while answering the reference has to confine its  

inquiry  to  the  question(s)  referred  and  has  no  

jurisdiction to travel beyond the question(s) or/and  

the  terms  of  the  reference  while  answering  the  

reference.  A fortiori,  no inquiry can be made on  

those questions, which are not specifically referred  

to the Tribunal while answering the reference.

26. Coming now to the facts of this case, it is an  

admitted case that the services of the appellants  

and  those  at  whose  instance  the  reference  was  

made were terminated long back prior to making  

of the reference.  These workers were, therefore,  

not  in  the  services  of  either  Contractor  or/and  

BCCL  on  the  date  of  making  the  reference  in  

question.   Therefore,  there  was  no  industrial  

dispute that "existed" or "apprehended" in relation  

to  appellants’  absorption  in  the  services  of  the  

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BCCL on the date of making the reference.

27. Indeed  a  dispute  regarding  the  appellants’  

absorption  was  capable  of  being  referred  to  in  

reference  for  adjudication,  had  the  appellants  

been in  the services  of  Contractor  or/and BCCL.  

But as said above, since the appellants’ services  

were  discontinued  or/and  retrenched  (whether  

rightly or wrongly) long back, the question of their  

absorption  or  regularization  in  the  services  of  

BCCL, as claimed by them, did not arise and nor  

this issue could have been gone into on its merits  

for the reason that it was not legally possible to  

give  any  direction  to  absorb/regularize  the  

appellants  so  long  as  they  were  not  in  the  

employment.  

28. It is a settled principle of law that absorption  

and regularization in the service can be claimed  

or/and  granted  only  when  the  contract  of  

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employment  subsists  and  is  in  force  inter  se  

employee and employer.  Once it comes to an end  

either by efflux of time or as per the terms of the  

Contract of employment or by its termination by  

the employer, then in such event, the relationship  

of employee and employer comes to an end and  

no longer subsists except for the limited purpose  

to  examine  the  legality  and  correctness  of  its  

termination.

29. In our considered opinion,  the only industrial  

dispute,  which  existed  for  being  referred  to  the  

Industrial Tribunal for adjudication was in relation  

to termination of appellants’ employment  and   -  

whether it was legal or not? It is an admitted fact  

that  it  was  not  referred  to  the  Tribunal  and,  

therefore,  it  attained  finality  against  the  

appellants.  

30. In  our  considered  opinion,  therefore,  the  

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reference, even if made to examine the issue of  

absorption  of  the  appellants  in  the  services  of  

BCCL, the same was misconceived.   

31. Apart from this infirmity noticed in this case,  

we have also not been able to find any parity in  

the  facts  of  the  earlier  reference  (R.C.No.58/81)  

and the case in hand. As noted above, the earlier  

reference was made to decide the absorption of 39  

workers in the BCCL. This could be made because  

they were in the service.  So far as the present  

case is  concerned,  the appellants   were   not  in  

service.  

32. It  can safely be noted that  merely because  

the workers in both the references were working in  

one project by itself was not enough to give them  

any right to claim parity with the claim of others.  

So long as, the parity was not proved on all the  

relevant  issues  arising  in  the  case,  no  worker  

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whether individual  or  collectively was entitled to  

claim the relief only on the basis of similarity in  

the status qua employer.   

33. In the light of foregoing discussion, we are of  

the considered opinion that the reference made to  

examine the issue of  appellants’  absorption  qua  

the BCCL was incapable of being referred to on the  

said question and in any event,  it was incapable  

of being answered in favour of the appellants.  

34. That  apart,  when three Courts,  despite  this  

infirmity,  went  into  the  facts  and  held  that  the  

appellants  were  not  entitled  to  claim  any  

absorption in the services  qua the BCCL, then in  

our considered opinion, they were right in holding  

so and we do not find any good ground to go into  

the  factual  issues  de  novo in  our  appellate  

jurisdiction.  The factual  findings recorded by the  

three Courts are binding on this Court.

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35. We, therefore, find no ground to set aside the  

impugned order and accordingly uphold the same.

36. This  takes  us  to  the  next  question  as  to  

whether  the appellants are entitled to claim the  

relief of payment of retrenchment compensation.  

Having  given  our  anxious  consideration  to  this  

issue, we are of the considered view that having  

regard to the peculiar facts of this case and the  

reasons, which we have set out hereinbelow, we  

are inclined to hold that the appellants are entitled  

to claim the retrenchment compensation from the  

Contractor/BCCL.

37. It is for the reason that firstly, the respondent  

in their written statement filed before the Tribunal  

have  offered  to  pay  the  retrenchment  

compensation  to  all  such  workers  in  accordance  

with  the  provisions  of  Section  25F  of  the  Act.  

Secondly,  no  documents  were  filed  by  the  

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respondent to show that any such compensation  

was paid  to  the appellants  or  to  any worker  till  

date  by  the  respondent  and  lastly,  more  than  

three decades have passed and yet the issues of  

absorption, and/or payment of compensation has  

not attained finality.  

38. Indeed, in similar circumstances, this Court in  

the case of Pottery Mazdoor Panchayat’s case  

(supra)  had  directed  payment  of  retrenchment  

compensation  to  the  workers  and  made  the  

following pertinent observations in the concluding  

paras:

“17.  It  is  unnecessary  to  consider  the  second question as regards the payment  of  retrenchment  compensation  and  we  will,  therefore,  express no opinion as to  whether the Tribunals had jurisdiction to  go into that question. Happily, the parties  have  arrived  at  a  settlement  on  that  question  under  which,  the  respondent  agrees to fix within a period of six months  from  today  the  retrenchment  compensation payable to the retrenched  workers in accordance with the provisions  of  Section  25FFF   of  the  Central  Act,  namely, the Industrial Disputes Act, 1947,  

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without  the  aid  of  the  proviso  to  that  section.  After  the  retrenchment  compensation is  so  fixed,  a  copy of  the  decision fixing the compensation payable  to each of the worker will be sent by the  respondent  to  the  appellant  Union.  The  workers or their legal representatives, as  the case may be, will then be entitled to  receive  the  retrenchment  compensation  from the respondent, which agrees to pay  the same to them. The respondent will be  entitled  to  set  off  of  the  amounts  of  retrenchment compensation already paid  to the workers against the amounts found  due  to  them  under  this  settlement.  On  receiving the retrenchment compensation  the workers concerned shall withdraw the  applications,  if  any,  filed  by  them  for  relief in that behalf.

18.  We would  only  like  to  add that  the  compensation  which  will  be  paid  to  the  workers will be without prejudice to their  right, if any, to get employment from the  respondent  in  the  new business  as  and  when occasion arises.”

39. Following the course adopted by this Court in  

Pottery Mazdoor Panchayat (supra), we direct  

the  Industrial  Tribunal  to  verify  the  case  of  the  

appellants (150 or so) for deciding each worker’s  

claim for payment of retrenchment compensation  

to him/her as per the provisions of Section 25F of  

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the  Act  and  accordingly  he/she  be  paid  

retrenchment compensation.  In case any worker  

has expired then his/her compensation amount be  

paid to his/her legal  representative after  making  

proper verification of the case.  

40. We,  however,  make  it  clear  that  the  

respondent  would  not  raise  any  objection  about  

the  maintainability  of  workers’  claim  nor  would  

raise any objection on merits before the Tribunal  

and the inquiry would only confine to determine  

the  quantum  of  retrenchment  compensation  

payable to each worker.

41. The  appellants  and  respondents  would  

appear before the Tribunal on 16.02.2015 and file  

necessary  documents  to  enable  the  Tribunal  to  

verify the claim of each worker for determining the  

quantum  of  compensation.   The  Tribunal  would  

issue notice to the Contractor to enable them to  

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participate  in  the  proceedings  in  the  light  of  

provisions  of  Contract  Labour  Prohibition  and  

Regulation Act, 1970. The appellants and all such  

workers  can  be  represented  through  recognized  

Union before the Tribunal.

42. The entire exercise should be completed and  

payment  be  made  to  the  workers  within  six  

months.

43. With  these  directions,  the  appeal  stands  

disposed of.

               …………….…. ……...................................J.

[FAKKIR MOHAMED IBRAHIM KALIFULLA]

                               ……….. ………………..................................J.

[ABHAY MANOHAR SAPRE]

New Delhi; February 02, 2015.

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