KIRLOSKAR BROTHERS LIMITED versus RAMCHARAN AND ORS

Citation: [2022] 18 S.C.R. 330 · Decided: 05-12-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 18 S.C.R.
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KIRLOSKAR BROTHERS LIMITED
v.
RAMCHARAN AND ORS.
(Civil Appeal Nos. 8446-8447 of 2022)
DECEMBER 05, 2022
[M. R. SHAH AND HIMA KOHLI, JJ.]
Contract Labour (Regulation and Abolition) Act, 1970: s. 10
– Absorption of contractual labour – Concept of – On facts,
respondents nos. 1-6 were contractual labourers of the respondent
no. 7-contractor engaged by the appellant in terms of the contract
– On labour contract coming to an end, services of the respondents
were dispensed with by the contractor – Respondents seeking re-
instatement, on the ground that they were employees of the appellant
and were orally terminated – Labour Court held that the contractor
had obtained license under the CLRA Act and that the contesting
respondents were the employees of the contractor and not of the
appellant – Tribunal ordered reinstatement and held that a contract
labourer automatically becomes an employee of the principal
employer as per the MPIR Act which was upheld by the Single Judge
of the High Court, however, set aside by the Division Bench – On
appeal, held: No documentary evidence produced that the
respondents were the employees of the appellant – Even the direct
control and supervision of the contesting respondents was always
with the contractor – No evidence on record that any of the
respondents were given any benefits, uniform or punching cards by
the appellant – Merely because sometimes the payment of salary
was made and/or PF contribution was paid by the appellant, which
was due to non-payment of the same by the contractor, the
respondents shall not automatically become the employees of the
appellant – No notification u/s. 10(1) issued prohibiting the contract
labour, nor there are allegations and/or even findings that the
contract is sham and bogus and/or camouflage, the direction to
absorb or regularise the services of the contract labour cannot be
made to the principal employer/appellant – Thus, both the tribunal
as well as the High Court erred in reinstating the contesting
respondents and directing the appellant-principal employer to
absorb them as their employees – Judgment and order passed by
the labour court is restored.
[2022] 18 S.C.R. 330
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Allowing the appeals, the Court
HELD 1.1 The contesting respondents were the contractual
labourers of the respondent No. 7-contractor, who was a
contractor engaged by the appellant in terms of the contract dated
22.04.1995, which was renewed from time to time. In the instant
case, that no notification u/s. 10 of the Contract Labour
(Regulation and Abolition) Act has been issued by the State
Government/appropriate Government, prohibiting the contract
labour. Upon entering into the contract, necessary compliance
under the CLRA Act was also completed by the appellant and
the respondent No. 7-contractor. On the labour contract coming
to an end, the services of the contesting respondents were
dispensed with by the contractor. [Para 4][336-B-C]
1.2 On going through the entire material on record, no
documentary evidence was produced, by which it can be said that
the contesting respondents were the employees of the appellant.
There is no provision under Section 10 of the CLRA Act that the
workers/employees employed by the contractor automatically
become the employees of the appellant and/or the employees of
the contractor shall be entitled for automatic absorption and/or
they become the employees of the principal employer. Even the
direct control and supervision of the contesting respondents was
always with the contractor. There is no evidence on record that
any of the respondents were given any benefits, uniform or
punching cards by the appellant. [Para 4.1][336-D-F]
1.3 Under the contract and even under the provisions of
the CLRA, a duty was cast upon the appellant to pay all statutory
dues, including salary of the workmen, payment of PF contribution,
and in case of non-payment of the same by the contractor, after
making such payment, the same can be deducted from the
contractor’s bill. Thus, merely because sometimes the payment
of salary was made and/or PF contribution was paid by the
appellant, which was due to non-payment of the same by the
contractor, the contesting respondents shall not automatically
become the employees of the principal employer-appellant. [Para
4.2][336-F-G]
KIRLOSKAR BROTHERS LIMITED v. RAMCHARAN AND
ORS.
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SUPREME COURT REPORTS
[2022] 18 S.C.R.
1.4 In the absence 

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