A.P.S.R.T.C. AND ORS versus G. SRINIVASA REDDY AND ORS.

Citation: [2006] 2 S.C.R. 494 · Decided: 24-02-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT

Judgment (excerpt)

A 
A.P.S.R.T.C. AND ORS. 
v. 
( 
G. SRINIV ASA REDDY AND ORS. 
FEBRUARY 24, 2006 
B 
[ARIJIT PASAYAT AND R.Y. RAVEENDRAN, JJ.] 
Contract labour (Regulation and Abolition) Act, 1970-Section 10(/)-
' 
Circular containing guidelines issued by State Corporation for absorption of 
1--
c persons employed on casual basis--Writ petitwn filed before High Court by 
respondents seeking direction/or regularisation of services on the basis of the 
Circular---High Court giving directions to th~ Corporation to consider the 
case of the respondents in terms of the Circular-Corporation passed an 
order rejecting the absorption of the respondents on the ground that they are 
contract labour and that there is no employee-employer relationship-Writ 
D petition filed by respondents before High Court challenging the order-High 
Court allowing the Writ Petition holding that the work of the respondents was 
perennial in nature and hence there was direct employee-employer 
relationship-Correctness of-Held, the High Court, while exercising the power 
I-
of judicial review under Article 226 of the Constitution of India, cannot 
E 
substitute its own decision and direct absorption of r.~spondents by assuming 
that the contract labour system was only a camouflage and that there was a 
direct employer-employee relationship-On facts, tile respondents are not 
entitled to the relief of absorptionlregularizatwn on the basis of the Circular 
as it specifically excluded contract labour. 
F 
Appellant-Corporation issued a Circular containing guidelines for 
absorption of persons employed on casual basis/consolidated pay/piecemeal 
rate/work charged establishment. The guiddines provided, inter alia, that 
~ . 
it is not applicable to contract labour. Res1mndents, who were employed 
as scavengers by the appellant, filed a Writ Petition before High Court 
seeking direction for regularisation of th1:ir seryices. The High Court, 
G without examining the claim on merits, din!cted the appellant to consider 
their cases in term of the Circular and pass order. The appellant, by a 
letter, instructed its concerned officer to verify the claims of the 
respondents and send necessary information. Since no further action was 
... 
taken, the respondents filed a Writ Petition before High Court (second 
I' 
H 
494 
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A.P.S.R.T.C. v. G. SRINIVASA REDDY 
495 
round) for declaration that the appellant's failure to take action was illegal A 
and praying for a direction to the appellant to absorb them into its service. 
The High Court disposed of the Writ Petition by directing the Corporation 
to consider the claim for absorption. 
A Selection Committee of the appellant, after interviewing the third 
respondent, found him to be a contract labour. The appellant passed an B 
order holding that the third respondent was not entitled to claim 
absorption under the Circular. The respondents filed a Writ Petition 
before High Court (third round) for quashing the order of the appellant 
and seeking a direction to treat them as ex-casual employees and absorb 
them under the Circular. The High Court quashed the order of the c 
appellant directing the appellant to pass a fresh order on the 
representation of the respondents. The High Court held that the appellant 
could not reject the claim of the respondents being contract labour as such 
ground was not taken by the appellant in earlier rounds of litigation. The 
Writ Appeal preferred by the appellant was dismissed by the High Court 
holding that the work of the respondents was perennial in nature and not D 
seasonal and hence there was direct master - servant relationship between 
• the appellant and the respondents. 
Allowing the appeal, the Court 
HELD: 1.1. There was no notification under section 10(1) of Contract E 
Labour (Regulation and Abolition) Act, 1970 prohibiting contract labour. 
There was also neither a contention nor a finding that the contract with 
the contractor was sham and nominal and the contract labour working 
in the establishment were, in fact, employees of the principal employer 
himself. The High Court could not have directed absorption of respondents 
who were held to be contract labour by assuming that the contract labour F 
system was only a camouflage and that there was a direct relationship of 
employer and employee between the corporation and the respondents. If 
respondents want the relief of absorption, they will have to approach the 
Industrial Tribunal and e

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