WORKMEN OF THE FOOD CORPORATION OF INDIA versus M/S. FOOD CORPORATION OF INDIA

Citation: [1985] 2 S.C.R. 1065 · Decided: 28-02-1985 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

J 
' . 
1065 
WORKMEN OF THE FOOD CORPORATION OF INDIA 
A 
v. 
M/S. FOOD CORPORATION OF INDIA 
February 28, 1985. 
(D.A. DESAI, V. BALAKRISHNA ERADI AND V. KHALID. JJ.] 
Industrial Disputes Act, 1947, sec. 9A-Contract System abofished-
lntroduction of direct payment system ejfectof-Whetker reintrodiiction of contract 
system amounts to discharge, termination of service or retrenchment <Jf workmen-
B 
Whether notice u/s. 9A is a condition precedent to such change-Effect of non~ 
C 
issuance of such notice. 
There were 464 workmen designated as handling Mazdoors for hand .. 
ling foodgrains at Siliguri Depot set up by the respondedt"'Food Corporation 
of India in West Bengal. 
Prior to January 2, 1973, the work of handling 
foodgrains at the said depot was entrusted by the respondent to a contractor 
who used to engage workmen and the workmen received their salaries or 
wages or remuneration from the contractor as determined by the contractor 
or as agreed between the Contractor and the workmen. 
The respondent 
introduced direct payment system with effect from January 2, 1973 pur· 
suant to an agreement arrived at between the parties and the intermediary 
contractor disappeared from the picture. 
The method adopted was that 
the bills for the piece rate wag.es payable to handling Mazdoors were 
prepared by the Depot staff. 
The work rendered by each workmen had to 
be entered into 
a muster roll 
register. 
The 
rCspondeot-Corpora .. 
tion 
distributed 
the 
wages 
calculated on 
piece 
rate 
to 
each 
workman through Sardars/Mondals 
and each workman 
was required 
to be a party to the acquittance roll to be retained by the respondent. 
The Sardars/Mondals used to accept payment and sign bills on behalf of 
the aforesaid workmen. 
The respondent changed this method of direct 
payment with effect from March 10, 1975 superseding the direct payment 
system and reintroducing contractor system and that too without giving 
any notice of change to the Workmen's Union-appellant herein as contemp· 
lated by section 9(A) of the Industrial Disputes Act 1947 (l.D. Act, for 
short). 
Consequently the respondent 
discontinued employment of the 
aforesaid 464 workmen and brought in the in' ermediary contractor and 
treated the workmen as the workmen employed by the contractor. 
The 
appellant~Uoion raised an industrial dispute as to whether the disconti. 
nuance of employment of 464 workers of their Silliguri Depot w.e.f. 21st 
July 1974 by the respondent is lawful and justified and the same was 
referred to the tribunal which negatived the claim of the appe\lant .. union 
and held that the discontinuance of contractor system in the year 1973 and 
D 
E 
F 
G 
H 
1066 
SUPREME COURT REPORTS 
(1985] 2 s.c.a. 
A 
introduction a direct payment system did not bring about any change in the 
status of the workmen and therefore they never became the workmen of 
the respondent.Corporation. 
As a corrollary, it further held that reintro-
duction of the contractor system in 1975 did not constitute discontinuance 
of the services of the affected workmen. 
Hence this appeal by special 
leave. 
B 
The appellant-Union contended (il that even though the workmen 
were initially engaged by the contractor when the work of handling food· 
grains brought to Silliguri Depot was entrusted to a contractor, but subse-
quently at least from April 1973, the intermediary contractor was removed 
and they became the workmen directly employed by the Corporation and 
were therefore_, the workmen of the respondent; and unless their services 
were legally terminated, they cannot be discontinued from service of the 
Corporation and some other master imposed upon them. 
(ii) that apart 
from being an unfair labour practice, the changeover was illegal and vindic·· 
tive and malicious in character and that the respondent was legaHy bound 
to give a notice of the said change to the Union as contemplated u/s. 9A 
of the I.D. Act. 
On the other hand, the respondent·Corporation argued 
(i) that even when the so called direct payment system was introduced after 
removing the contractor, it was basically a spill over of the old contract 
system save and except that the contractor was replaci::d by Sardars/Mondals 
to whom total payment on piece rate was made and who distributed tbe 
wages to the individual workmen, the rate of payment remaining the san1e 
as ·was in vogue at the time the contractor handled the work;ind therefore 
at no point of time, the concerned workman ev

Excerpt shown. Read the full judgment & AI analysis in Lexace.