GUJARAT ELECTRICITY BOARD, THERMAL POWER STATION UKAI, GUJARAT versus HIND MAZDOOR SABHA AND ORS. ETC.

Citation: [1995] SUPP. 1 S.C.R. 173 · Decided: 09-05-1995 · Supreme Court of India · Bench: P.B. SAWANT · Disposal: Disposed off
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Judgment (excerpt)

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GUJARAT ELECTRICITY BOARD, THERMAL POWER 
A 
STATION UKAI, GUJARAT 
v. 
HIND MAZDOOR SABHA AND ORS. ETC. 
MAY 9, 1995 
(P.B.SAWANT AND S.B. MAJMUDAR, JJ.] 
Contract Labour (Regulation and Abolition) Act, 1970: Sections 7, 10, 
12, 14 and 23. 
Contract Labour (Regulation and Abolition) Rules, 1971 : Rules, 17, 
18, 20, 21, 25 and 27. 
B 
c 
Contract Labour-Authority to abolish-Held exclusively vests in ap-
propriate Government under Section JO-Such powers can be exercised only 
when there i; a genuine contract-In case of sham contract workers can raise D 
industrial dispute-For ascertaining genuineness of contract Court can inves-
tigate factors mentioned in section 10(2)(a) to (d). 
Contract Labour-Contractoi-Non-production of registration certifi-
cate and licence-Effect of 
Abolition of contract labour-Absorption of ex-contractors' 
employees-Direct employees of principal employer can raise industrial dis-
pute for-Industrial adjudicator can direct absorption of workmen of erstwhile 
contractors. 
Constitution of India, 1950: Articles 38, 39, 41, 43 and 47. 
Contract Labour-Engaging of in public sectoi-Deprecation of-
Recommendation for discontinuance of. 
E 
F 
The appellant-Board had deployed through various contractors 1500 
skilled and unskilled manual labourers, besides its direct workmen, for G 
carrying on its work or generation and distribution or electricity at its 
Thermal Power Plant, Ukai in Gujarat. Respondent • Union initiated legal 
proceedings seeking (i) reinstatement or some or the workers alleged to 
have been illegally terminated and (ii) for enforcement or labour laws on 
the ground that the contractors were flouting the labour laws. Some or the H 
173 
174 
SUPREME COURT REPORTS (1995] SUPP. 1 S.C.R. 
A disputes were settled with the help of Court Commissioner. As to the 
remaining disputes viz. those relating to the revision of wages of workmen, 
their rights and privileges under different statutes as well as the claim of 
workers that they were employees of the appellant-Board, it was agreed 
between the parties that the same should be referred for adjudication by 
B a joint reference under section 10(2) of the Industrial Disputes Act, 1947. 
Accordingly, a joint application was made to the Assistant Commissioner 
of Labour under section 10(2) requesting him that these disputes be 
referred for adjudication to the Industrial Tribunal and consequently the 
reference from which the present proceedings arise was made. The refer-
ence application was duly signed by the present appellant-Board, all the 
C contractors involved in the dispute and by the then Surat Labour Union 
which had both direct as well as contract labourers, as its members. The 
respondent-Union is the successor of the said Surat Labour Union. The 
Tribunal rejected the preliminary point raised by the contractors that it 
had no jurisdiction to entertain the demand raised for abolition of con-
D tract labour. Further after recording evidence and hearing the parties the 
Tribunal came to the conclusion that the workmen concerned in the 
reference are not the workmen of contractors and directed that they should 
be deemed to be the workmen of the Board. The Tribunal, came to the 
conclusion that (i) contractors had no licence under the Contract Labour 
(Regulation and Abolition) Act, 1970 as no such original certificates were 
E brought on record; (ii) the work was being done on the premises of the 
Board itself as the coal was being used for the purposes of the Board, viz., 
generation of electricity; (iii) the workmen were broadly under the control 
of the Board; (iv) there was overall supervision of the work by the officers 
of the Board; (v) the work was of a continuous nature and (vi) the work 
F was an integral part of the overall work to be executed for the purposes of 
the generation of electricity and that it had to be performed within 
specified time limits as part of the integrated process. Against the decision 
of the Tribunal, the Electricity Board preferred a writ petition before the 
High Court which was dismissed. 
G 
In the connected appeal the High Court held that the workmen 
concerned do not become the direct employees of the enterprises merely 
because there are no registration certificates and licence with the under-
takings and the concerned contractors respectively. 
H 
In the other connected appeal the Labour Court has given relief of 
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GUJ. ELEC1RICITY BOARD v. HIND MAZDOOR SABHA 
175 
reinstatemen
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