MUNICIPAL CORPORATION OF GREATER MUMBAI versus K.V. SHRAMIK SANGH AND ORS.

Citation: [2002] 2 S.C.R. 1122 · Decided: 12-04-2002 · Supreme Court of India · Bench: D.P. MOHAPATRA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
MUNICIPAL CORPORATION OF GREATER MUMBAI 
v. 
K.V. SHRAMIK SANGH AND ORS. 
APRIL 12, 2002 
B 
[D.P. MOHAPATRA AND SHIVARAJ V. PATIL, JJ.] 
Labour Laws: 
Contract Labour (Regulation and Abolition Act, 1970)-Contract 
C Labour-Employment of-Allegation that contract was sham-Denial of 
allegation by principal employer-High Court ordered for abolition of contract 
labour system and absorption of identified contract labourers directly without 
referring it to State or Industrial Adjudicator-Contract held to be sham on 
the ground that the principal employer and the contractors did not comply 
D with the provisions of the Act-On appeal-Held, order of High Court not 
sustainable-High Court could have directed the appropriate Authority to 
pass Orders instead of taking up the task on itself-When disputed questions 
of fact arise Court cannot arrive at conclusion that the contract was sham as 
.a matter of law for non-compliance of the provisions of the Act-Absorption 
of Contract Labourers cannot be auto~atic. 
E 
Constitution of India, 1950-Article 226-Jurisdiction under-
Adjudication of disputed question of fact-Held, not permissible. · 
Workmen, represented by the respondent-Union, who were working in 
Solid Waste Management Department, one of the Sections of appellant-
F Corporation as contract labourers, filed writ petition seeking abolition of 
contract labour system in the Department and for their absorption in the 
Department as permanent employees. They alleged that the contractors as 
well as the Corporation did not comply with the provisions of Contract Labour 
(Regulation and Abolition) Act, 1970; that the Contract was a sham 
G arrangement. The Union, in support of its petition referred to complaints filed 
by it to the Labour Commissioner, and to the recommendations of Labour 
Commissioner, Labour Minister and Labour Contract Advisory Board with 
regard to abolition of Contract Labour under Section 10 of the Act. The 
Corporation denied that the arrangement was sham or illegal. 
·H 
On interim direction by High Court to verify the authenticity of the List 
1122 
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I 
MUNICIPALCORPN OF GREATER MUMBAI"· KV SHRAMIK SANGH 
} } 23 
of the workmen claiming to be members of the Union, Labour Commissioner A 
in his Reports pointed out that investigation regarding authenticity of 
workmen could not be carried out as the contractors did not maintain any 
record. He also suggested that in absence of any record, the list of the workers, 
as submitted by the Union, might be considered as valid list. 
High Court held that although powers to abolish contract labour vested B 
in the Government but since the State/Authority could not take action to 
prohibit employment of contract labour due to Election Code of Conduct, 
the Court instead of referring the matter to State/ Authority and relying on 
Air India's case ordered for abolition of Contract Labour System in the 
Department and ordered for absorption of 782 identified workers. It held the C 
Contract as sham in view of the fact that the Corporation and the contractors 
did not comply with the provisions of the Act. However, it did not record a 
finding that the contract was sham or camouflage considering the material 
on record. 
In appeal to this Court, Corporation contended that High Court was D 
not justified in exercising jurisdiction under Article 226 of the Constitution, 
when the case involved disputed question of fact; that it was for Industrial 
Adjudicator to decide in appropriate proceedings; that High Court was wrong 
in ordering automatic abolition of contract labour on the basis of Judgment 
in Air India's case as the same stood overruled by Judgment in Steel Authority's 
case. 
Respondent-Union contended that contract labour system may be 
characterised as sham if the work is of continuous nature, supervision and 
control is by principal employer, and the work is of statutory nature; that 
normally High Court inquires as to whether the contract labour system is a 
sham, and direct absorption under ArtiCle 226, but where facts are by and 
large undisputed and many years have passed and all the authorities have 
commended the absorption of workers but the ultimate authority has failed 
to act for a long time and it would be an act in futility and waste of time and 
also cause injustice to the workers, High Court could go into the question of 
facts and pass orders instead of remanding the matter. 
Allowing the appea~ the Court 
E 
F 
G 
HELD: 1.1. The co

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