STEEL AUTHORITY OF INDIA LTD. AND ORS. ETC. ETC. versus NATIONAL UNION WATER FRONT WORKERS AND ORS, ETC. ETC.

Citation: [2001] SUPP. 2 S.C.R. 343 · Decided: 30-08-2001 · Supreme Court of India · Bench: B.N. KIRPAL

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Judgment (excerpt)

STEEL AUTHORITY OF INDIA LTD. AND ORS. ETC. ETC. 
A 
V. 
NATIONAL UNION WATER FRONT WORKERS 
AND ORS, ETC. ETC. 
AUGUST 30, 2001 
[B.N. KIRPAL, SYED SHAH MOHAMMED QUADRI, M.B. SHAH, 
RUMA PAL AND K.G. BALAKRISHNAN, JJ.] 
Contract Labour (Regulation and Abolition) Act, 1970 : 
Sections 1(4) & (5), 2(1) (a) (Before and After 1986 Amendment) 2 (1) 
fb) (c) (e) (g) & (i), 7 to 9, JO, 16 to 21 and 23 to 25. 
Contract Labour (Regulation and Abolition) Rules, 1971 : 
B 
c 
Rules 21 (2), 25(2) (VJ (a), 72 to 77, 81(3) 82(2) Forms LIL lll, JV. VJ, D 
X!L XIV and llv. 
'Appropriate Government'-Correct import of expression-Government 
Company-Appropriate Government in respect of-Who is-Determination of 
appropriate Government-Test laid down for pre-amendment and post- E 
amendment period. 
"Appropriate Government"-Expression 'Any Industry carried on by or 
under the authority of the Central Government'-Scope and meaning of-Test 
to determine whether an industry was being carried out under the authority 
of Central Government laid down-The fact of being an instrumentality of p 
State is not determinative in this regard. 
Contract Labour-Central Government-Notification dated December 
9, 1976 issued under Section 10(1)-Prohibition of employment of contract 
labour under the Notification-Notification held invalid for non-compliance 
with requirements o.f Section I 0-Held there was non-application of mind by G 
Central Government-Notification quashed prospectively. 
Contract labour-Absorption-Issue of a valid Notification prohibiting 
contract labour-Effect of-Held provisions of Act neither expressly nor 
impliedly provide for automatic absorption of contract labour on issuance of 
343 
H 
344 
SUPREME COURT REPORTS [2001 J SUPP. 2 S.C.R. 
A a Notification-Position in this regard before and after enactment of the Ac/-
Discussed-Consequences of prohibition Notification issued under Section I 0-
Discussed. 
B 
Constitution of India, 1950 : Articles 12, 14, 23, 38, 39, 43A and 
Preamble. 
State-Duty and obligation to improve the lot of the work force. 
Industrial Disputes Act, 1947: Section 2(a)-Scope of-Object of Act. 
Interpretation of statute-Duty of Court to give effect to clear and explicit 
C language-Rule of literal interpretation-Distinction between public law and 
private law-Held not relevant in regard to interpretation of statutes-
Applicability of Mischief Rule-Principle of liberal construction of beneficial 
legislation-Applicability of 
Public law-Private law-Distinction between-Held not relevant in 
D regard to interpretation of statutes. 
Labour law-Principles of contract law-Applicability to labour law. 
Words and Phrases : 
E 
'Authority'-Meaning of-Jn the context a/Section 2(1) (a) of the Contract 
F 
Labour (Regulation and Abolition) Act, 1970. 
In these appeals the following questions arose for consideration : 
(i) What is the true and correct import of the expression 'appropriate 
Government' as defined in clause (a) of sub-section (I) of Section 2 of the 
Contract Labour (Regulation and Abolition) Act, 1970; 
(ii) Whether the Notification dated December 9, 1976 issued by the 
Central Government under Section IO (I) of the C.L.R.A. Act prohibiting 
employment of contract labour in all establishments of the Central 
G Government companies is valid and applies to all Central Government 
companies; and 
(iii) Whether automatic absorption of contract labour, working in the 
establishment of the principal employer as regular employees, follows on 
issuance of a valid notification under Section 10(1) of the C.L.R.A. Acl, 
H prohibiting the contract labour in the concerned establishment. 
STEEL AUTHORITY OF INDIA LTD. 11. NA TI ON AL UNION WATER FRONT WORKERS 
345 
Disposing of the appeals, the Court 
A 
HELD : 1. Clause (a) of sub-section (1) of Section 2 of the contract 
Labour (Regulation and Abolition) Act, 1970 defines the expression 
'appropriate Government'. This clause was substituted by the Contract 
Labour (Regulation and Abolition) Amendment Act, 1986 with effect from 
January 28, 1986. The phrase "any industry carried on by or under the B 
authority of the Central Government" is a common factor in both the 
unamended as well as the amended. definitions. 1364-E; 366-GJ 
2. Before January 28, 1986 the determination of the question whether 
Central Government or the State Government is the appi:opriate Government 
in relation to an establishment, will depend, in view of the definition of the C 
expression "appr

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