OIL AND NATURAL GAS CORPORATION LTD. versus THE PRESIDENT, OIL FIELD EMPLOYEES ASSOCIATION & ORS.

[2022] 19 S.C.R.

AOIL AND NATURAL GAS CORPORATION LTD.

THE PRESIDENT, OIL FIELD EMPLOYEES ASSOCIATION& ORS.

B(Civil Appeal No. 1033 of 2022)

FEBRUARY 04, 2022

[L. NAGESWARA RAO AND ANIRUDDHA BOSE, JJ.]

Industrial Disputes Act, 1947: If irregularity or illegalitycommitted by Tribunal touches upon the jurisdiction to try andCdetermine over subject dispute is altogether beyond its purview,that question would go to the root of the matter and it would bewithin the jurisdiction of the superior court to correct such error –In the facts of the present case, it is not the question of inherentlack of jurisdiction on the part of the Tribunal – The question ofDjurisdiction, as held by the High Court, was mixed question offact and law – In the instant case, the settlement of 19th September,2016 was settlement essentially between the contractors andworkmen engaged by the former – The appellants were onlyconsenting parties to the settlement – The dispute related to thequestion as to whether the workmen engaged by the contractorsEwould be entitled to pay at par with other workmen of the employerand demand to that effect was raised with the appellants only – Therespondent Unions claimed to be, in reality, employees of ONGCand the demand was raised upon the latter, and not on theircontractors – The nature of their demand was thus differentFparticularly as regards the status of the workmen, i.e., their claimto be workmen of ONGC – Thus, the settlement of 19th September,2016, in which the employers were the contractors cannot bind thesubject-dispute, where the appellants have been found to be theemployer on the basis of materials considered by the High Court –Engagement by the contractors cannot be the sole basis forGdetermining status as workmen of contractors – The High Courtrightly affirmed the findings of the Industrial Tribunal that thesettlement of 19th September, 2016 did not bind the workmen whosecause the respondent Unions were espousing – The finding of theTribunal that the settlement involving implementation of the FairHWage Policy (FWP) was not just and fair, which finding has been376

OIL AND NATURAL GAS CORPORATION LTD. v. THE PRESIDENT, OILFIELD EMPLOYEES ASSOCIATION

sustained by the High Court, is essentially finding on facts basedon appreciation of evidence – Such finding not tainted by anyelement of perversity – The scope of jurisdiction of the IndustrialCourt is wide and in appropriate cases it has the jurisdiction evento make contract – Directives issued by the Tribunal, as modifiedby the High Court are reasonable and cannot be termed as perverse.

Dismissing the appeal, the Court

HELD:1.1 If irregularity or illegality committed by Tribunaltouches upon the jurisdiction to try and determine over subjectdispute is altogether beyond its purview, that question would goto the root of the matter and it would be within the jurisdiction ofthe superior court to correct such error. In the facts of the presentcase, it is not the question of inherent lack of jurisdiction on thepart of the Tribunal. The question of jurisdiction, as held by theHigh Court, was mixed question of fact and law. [Para 15][391-E-G]1.2 The dispute out of which the present appeal arisesrelates to the question as to whether the workmen engaged bythe contractors would be entitled to pay at par with other workmenof the employer and demand to that effect was raised with theappellants only. The respondent Unions claimed to be, in reality,employees of ONGC and the demand was raised upon the latter,and not on their contractors. The nature of their demand wasthus different particularly as regards the status of the workmen,i.e., their claim to be workmen of ONGC. Thus, the settlementof 19th September, 2016, in which the employers were thecontractors cannot bind the subject-dispute, where the appellantshave been found to be the employer on the basis of materialsconsidered by the High Court. Their engagement by thecontractors cannot be the sole basis for determining their statusas workmen of contractors. [Para 23][398-D-F]

1.3. The High Court rightly affirmed the findings of theTribunal that the settlement of 19th September, 2016 did not bindthe workmen whose cause the respondent Unions are espousing.The finding of the Tribunal that the settlement involvingimplementation of the FWP was not just and fair, which finding

Ahas been sustained by the High Court, is essentially finding onfacts based on appreciation of evidence. [Para 24][398-F-G]

1.3. The scope of jurisdiction of the Industrial Court is wideand in appropriate cases it has the jurisdiction even to make acontract. The directives issued by the Tribunal, as modified bythe High Court are reasonable and cannot be termed as perverse.[Para 25][399-A-B]

ITC Ltd. Workers’ Welfare Association & Anr. v.Management of ITC Ltd. & Anr. (2002) 3 SCC 411:[2002] 1 SCR 711 – held inapplicable.

Workmen of the Food Corporation of India v. FoodCorporation of India (1985) 2 SCC 136; ParimalChandra Raha & Ors. v. Life Insurance Corporationof India and Ors. (1995) 2 Supp SCC 611 : [1995] 3SCR 34; Indian Petrochemicals Corporation Ltd. andAnr. v. Shramik Sena & Ors. (1996) 6 SCC 439 : [1999]1 Suppl. SCR 47; Steel Authority of India Ltd. & Ors.v. National Union Waterfront Workers & Ors. (2001) 7SCC 1 : [2001] 2 Suppl. SCR 343; Secretary, State ofKarnataka & Ors. v. Uma Devi & Ors. (2006) 4 SCC 1: [2006] 3 SCR 953; Steel Authority of India Limitedvs. Union of India & Ors. (2006) 12 SCC 233 : [2006]6 Suppl. SCR 663; Mukand Ltd. v. Mukand Staff andOfficers’ Association (2004) 10 SCC 460 : [2004] 2SCR 951; Rattan Lal Sharma v. Managing Committee,Dr. Hari Ram (Co-Education) Higher Secondary School& Ors. (1993) 4 SCC 10 : [1993] 3 SCR 863; Secretaryto Govt. of India and Others v. Shivram MahaduGaikwad (1995) 3 Supp SCC 231; Kalyani Sharp IndiaLtd. v. Labour Court No.1, Gwalior & Anr. (2002) 9SCC 655; National Engineering Industries Limited v.State of Rajasthan & Ors. (2000) 1 SCC 371 : [1999] 5Suppl. SCR 87; Ramnagar Cane and Sugar CompanyLtd. v. Jatin Chakravorty & Ors. (1960) 3 SCR 968 :[1960] 3 SCR 968; General Manager, Security PaperMill, Hoshangabad v. R.S. Sharma and Others (1986)2 SCC 151 : [1986] 1 SCR 281; Associated Cement

OIL AND NATURAL GAS CORPORATION LTD. v. THE PRESIDENT, OILFIELD EMPLOYEES ASSOCIATION

Companies Ltd., Porbandar v. Workmen (1960) AIR777: [1960] 3 SCR 157; Barauni Refinery PragatisheelShramik Parishad v. Indian Oil Corporation Ltd. (1991)1 SCC 4 : [1990] 3 SCR 282; ANZ Grindlays BankLtd. v. Union of India & Ors. (2005) 12 SCC 738 :[2005] 5 Suppl. SCR 63; Tata Engineering andLocomotive Co. Ltd. v. Their Workmen (1981) 4 SCC627 : [1982] 1 SCR 929; Jhagrakhan Collieries (P)Ltd. v. G.C. Agarwal, Presiding Officer, CentralGovernment Industrial Tribunal-cum-Labour Court,Jabalpur (1975) 3 SCC 613 : [1975] 2 SCR 873; TataChemicals Ltd. v. Workmen (1978) 3 SCC 42 : [1978] 3SCR 535 - referred to.

Case Law Reference

ACIVIL APPELLATE JURISDICTION : Civil Appeal No. 1033of 2022.

From the Judgment and Order dated 30.01.2020 of the High Courtof Bombay in WP No. 13015 of 2019.

J. P. Cama, Sr. Adv., G.D. Talreja, Akshay Amritanshu, AnkitBKumar Lal, Advs. for the Appellant.

Pallav Shishodia, Sr. Adv., Dr. Vinod Kumar Tewari, PramodTiwari, Vivek Tiwari, Priyanka Dubey, N Dubey, Advs. for theRespondents.CRespondent-in-person.

The Judgment of the Court was delivered by

ANIRUDDHA BOSE, J.

Leave granted.D2. The appellants before us are Oil and Natural Gas CorporationLimited (in short “ONGC”), public sector undertaking engaged in thebusiness of exploration and production of oil and gas. In this appeal, theyassail judgment of the Bombay High Court delivered on 30[th] January,2020 in Writ Petition No. 13015 of 2019 in which the claims of workmento be entitled to fixation of pay and other allowances as per an award ofEthe Central Government Industrial Tribunal No. II, (“Tribunal”) Mumbaihas been upheld with certain modification in the implementation part ofthat award. The controversy involved in this proceeding originates froma Direct Action notice raised by Union (Oil Field Employees Associationrepresented by their President-respondent no.1 in the present appeal)Fon 26[th] August, 2016. The workmen, whose cause the said Union wereespousing, were engaged by and getting their salaries paid through differentcontractors appointed by the ONGC. ONGC’s stand all along has beenthat these were contractors’ workmen – and not workmen of ONGC.In fact, ONGC’s case is that another settlement has been reached withthe Unions representing majority of the contractors’ workmen (over 77%)Gand that settlement arrived at on 19[th] September, 2016 is binding on allsimilar workmen including those represented by the respondent Unions.We shall address this issue later in this judgment. Earlier, there werethree memoranda of understanding reached in the years 1992, 1995 and2000 involving ONGC and different Unions representing the contractHworkmen working with the ONGC. These memoranda covered wages,

allowances and other facilities to be provided by the contractors to the“contract labour”. Copies of these memoranda of understanding havebeen annexed at pages 93, 102 and 113 of the paperbook. The 2000MoU had lapsed on 31[st] December, 2007.

3. There had been certain parallel developments on the industrialfront involving ONGC and Unions espousing the cause of workmenengaged by their contractors, which cast shadow on the dispute givingrise to this appeal. Six Unions representing workmen engaged bycontractors had submitted charter of 28 demands against ONGC and57 of their contractors. This was admitted for conciliation. ONGC wantedto introduce Fair Wage Policy (“FWP”) to cover contract employees.Negotiation in that regard had started among the parties. Memorandumof Settlement was signed on 19[th] September, 2016 (to which we havealready referred) under which the FWP extended to contract labourersof Western Offshore Unit, Mumbai was agreed to be implemented at allwork-centers of ONGC. This settlement, according to the appellants,was in terms of Section 12(3) read with Section 18(3)(d) of the IndustrialDisputes Act, 1947 (the Act) and entailed upward revision of wages asalso certain other measures of social protection including job security.The signatories to this settlement were contractors’ representatives andrepresentatives of six Unions “In the presence of and representingprincipal employers” as also the Conciliation Officer. The representativesof ONGC signed in the capacity of representatives of the principalemployer. The Tribunal and the High Court, however, held that theaforesaid arrangement was not settlement within the meaning of Section18(3)(d) of the Act and was not binding on the workmen involved in thesubject dispute. The Tribunal had also referred to certain order of statusquo passed by the High Court to sustain its finding on this count. Weshall however address this issue on merit, testing the reasoning of theHigh Court given in the impugned judgment.

4. The respondent-Oil Field Employees Association (the actualparty-respondent no. 1 is the President of the Oil Field EmployeesAssociation) issued the Direct Action Notice on 26[th] August, 2016 to theappellants. This Union was registered in the year 2014 and claims torepresent workmen engaged by contractors of the ONGC. On 19[th]September, 2016 itself, one P.D. Sunny, Conciliation Officer called theappellants and the first respondent for conciliation of dispute arising outof the notice for direct action of 26[th] August, 2016. On 26[th] September,

A2016, Charter of Demands was submitted before the ConciliationOfficer with copy to the appellants. The main demand of the respondentno.1 was that wages and service conditions of the workmen engaged bythe contractor should be at par with the regular employees of ONGC.

5. Thereafter, in course of conciliation proceeding the FWP wasBbrought on record and the respondent no. 1 questioned the legitimacy ofthe FWP. The conciliation records subsequently were transferred fromsaid P.D. Sunny to one Dr. S. Gunahari, Conciliation Officer & RegionalLabour Commissioner (C), Mumbai. The latter recorded failure ofconciliation and forwarded the failure report to the Central Government.The dispute then was referred by the Central Government to the TribunalCand it was registered as Ref. CGIT No.2/40 of 2017. The referenceorder was made by the Central Government on 18[th] September, 2017 interms of Section 10(2A) (1) (d) of the Act. The order of reference wasin the following terms:-

“Whether the following demands of The President, Oil FieldDEmployees Association are legal and justified?

1. To have uniform policies for all the workers irrespective ofthe contracts in the establishment of ONGC.

2. To get the MOU renewed with pay Revisions w.e.f. 1.1.2008.

E3. To advise M/s. ONGC Management to release an advance ofRs.50,000/- per worker and to adjust it with the arrears afterimplementation of the Pay Revisions. If not, to what relief theworkmen are entitled to?”

6. ONGC questioned the legality of the order of reference in aFwrit petition filed in the High Court of Bombay (registered as Writ PetitionNo. 5045 of 2018). This writ petition was not entertained by DivisionBench of the High Court and was rejected by an Order passed on29[th] January, 2019. It was, inter-alia, held in this order:-

“8) It is further to be noted that in pursuance to the communicationGaddressed by the Petitioner to the Chief Labour Commissioner, aConciliation Officer vide his notice dated 15[th] September 2016kept the matter for conciliation on 19[th] September, 2016 at 12:30hrs. Perusal of the minutes would reveal that in the said meeting,the representative of the Petitioner as well as the RespondentNo.3 were directed to do certain compliances. However, itH

appears that on same day i.e. 19[th] September 2016 at 15:00 hrs.,settlement was entered into by the representatives of the certainUnion and ONGC and 57 contractors of the ONGC. It is to benoted that though the said settlement was to be arrived on thesame day, the Petitioner neither informed the Conciliation Officerin the present proceedings about such settlement being arrivedat. The conduct of the Petitioner in not bringing to the notice of theConciliation Officer in the present proceedings, the settlementwhich was to arrive within hours with representative of certainUnions before some other Conciliation Officer, in our consideredview is not conduct befitting the employer who is an organ ofState and State within the meaning of Article 12 of theConstitution of India.

9) It is further to be noted that though the Respondent No.3 andthe Petitioner have completed their pleadings before the learnedCGIT and though there were rounds of litigations, which reachedupto this Court arising out of the interlocutory orders, the Petitionerhas chosen to move this Court for ad-interim orders only after thematter was kept for their evidence. We are of the consideredview that having consciously submitted to the jurisdiction of thelearned CGIT, it is not now open for the Petitioner to complain atsuch belated stage that the reference was not warranted.

10) Apart from that the question as to whether the settlementarrived at between some of the Unions at one hand and thePetitioner’s contractors on the other hand is binding on theRespondent No.3 and intervenors, can be very well looked intoby the learned Tribunal in the proceedings before it.

11) In that view of the matter, we are not inclined to entertainthe present Petition in its extraordinary jurisdiction under Article226 of the Constitution of India. The Writ Petition is thereforerejected.”

7. In the reference, two other Unions participated and wereimpleaded as parties therein on the basis of their applications. Thesetwo Unions are Maharashtra Sanghatit Asanghatit Kamgar Sabha(respondent no.2) and Maharashtra Employees Union (respondent no.3).

8. The Tribunal by its Order passed on 17[th] July, 2019 in substanceallowed the claim of the workmen articulated through the Unions andordered:-

A“1.The reference is allowed.

2.It is declared that the demands of the union to have uniformpolicies for all the workers irrespective of contracts in theestablishment of ONGC and to get the MOU renewed withpay revision w.e.f. 1.1.2008 are legal & justified.

3.First party management is directed to enter into MOU withsecond party unions with pay revision w.e.f. 1.1.2008 andimplement the same within 2 months from the date of order.

4.On renewal of MOU the first party management is directedto pay arrears arising out of implementation of MOUs within2 months from the date of order failing which concernedworkmen would be entitled to interest @ 6% per annum onthe arrears and other benefits to which they are entitled toon implementation of MOU.”

9. The High Court sustained the award in the writ petition broughtDby ONGC on substantive issues but partly allowed the petition challengingthe legality thereof, inter-alia, holding:-

“20. Coming now to the reliefs formulated by it, it is but apparentthat the tribunal does not appear to have applied its mind to individualrevisions that may have to be made. As we have noted above,Ethere is no infirmity in the conclusion of the tribunal that wagerevisions had to be on the lines of MbPT settlement for the relevantperiod, but then based on related MbPT settlements, the courthad to work out individual wage revisions for different categoriesof workmen, whose cause was espoused by the second partyFunions in the present case. The tribunal, firstly, had to work outindividual revised wage scales and allowances for workmen at 12Victoria Dock and Nhava Supply Base; it, then, had to formulatereasonable consolidated wages for workmen other than thoseworking in 12 Victoria Dock and Nhava Supply Base. This thetribunal appears to have clearly failed to do. It left it to the partiesGto work out the individual revisions. That I am afraid is notpossible. It is one thing to say that the basis of wage revision isavailable in document and quite another to apply that basis tothe individual facts of the case. For example, it is one thing to saythat workmen other than those working in 12VD and Nhava SupplyBase were to be paid wages, that is, consolidated wages, workedH

out on the basis of minimum basic wages of the concernedcategories of MbPT workers plus adjustments towards allowances,and quite another to actually provide for and stipulate suchconsolidated wages so calculated and adjusted. This was obviouslyfor the tribunal to do and not for the parties to work out. Thetribunal appears to have clearly missed this point. To that extent,the matter must go back to CGIT for determination of actual wagescales/allowances of workmen working in 12VD and NhavaSupply Base (based on MbPT scales/allowances) as well as otherworkmen covered by the reference (for consolidated wages basedon MbPT scales and allowances).21. The question then is of interim relief to be granted to theseworkmen pending consideration of the matter on remand by CGIT.It is matter of fact, and probably sad commentary on the timesthat we live in, that the last wage revision of these workmenoccurred as far back as in 2000. That wage revision was applicableonly till 31 December 2007 and till date, there has been no furtherrevision in sight, though at least three revision periods have goneby. On these facts, this court is of considered view that it wouldbe in the interest of justice to at least direct ONGC to pay wagesto the workmen concerned on the basis of what was agreed inthe settlement of 19 September 2016 minus its condition ofwithdrawal of proceedings against ONGC. These would indeedbe minimum wages that might in any case be payable to theconcerned workmen, that is to say, even if the unions were wrongin the matter of calculation of wages in accordance with theparticulars submitted with the statement of claim. If, on the otherhand, they were right that the workmen were entitled to get wagesin accordance with the particulars submitted by them, these interimrevised wages could then be adjusted against such wages.

22. The writ petition is, accordingly, disposed of by setting asidethe operative order passed by CGIT and remitting the reference,being Reference No.CGIT-2/40 of 2017, to CGIT-2, Mumbai fora fresh decision on (i) individual wage scales and (ii) consolidatedwages payable, respectively, to the contract workmen of ONGCworking at (i) 12 Victoria Dock and Nhava Supply Base and (ii)the other workmen covered by the reference. It is made clearthat such determination must be in the light of what has been

observed above, in particular that the wage revision/s of theseworkmen has/have to be on the lines of the wage revision/sapplicable to workmen of MbPT, which are placed before thecourt (i.e. MbPT settlements applicable for the periods from 2007to 2011 and from 2012 to 2016).

B23. The tribunal is requested to accord top priority to thisdetermination and dispose of the reference as expeditiously aspossible and preferably within period of eight months from thedate this order is pointed out to the tribunal. To that end, eitherparty may appear before the tribunal with notice to the other sideand produce an authenticated copy of this order. The tribunal mayCthereupon fix the schedule of hearings and decide the referenceaccordingly.

24. Pending hearing and final disposal of the reference on remand,interim wages shall be paid to the concerned workmen by ONGCfor the whole of the period of revision in accordance with MoS ofD19 September 2016 and also prospectively from the month ofMarch 2020.

25. Since the operative part of the award of CGIT has been setaside, pending criminal proceedings for non-implementation of theaward shall not be proceeded with.”

10. The workmen, whose cause the three Unions espouse werethose who were inducted by contractors and were getting their salariespaid through the contractors only. The main claim of the workmen wasfor having uniform policy for all workmen, irrespective of contractsunder which they were engaged in the matter of wages and allowances.FLast of the memoranda of understanding signed in the years 1992, 1995and 2000 was executed on 29[th] December, 2000. The wage revisionprovided for in the last memorandum of December, 2000 was to operatetill 31[st] December, 2007. Primarily, signatories to these memoranda arethe appellants-employer and the Unions. The respective contractors wereGnot signatories to these memoranda. One of the major characteristics ofthe terms contained therein, though not specifically spelt out in thememoranda themselves, is that the wages and allowances agreed upontherein were linked to the lines of settlement signed between MumbaiPort Trust (earlier Bombay Port Trust) and their workmen. We shallhenceforth refer to that settlement as MbPT Settlement. These

memoranda classified contract employees in two categories, one setworking for Victoria Dock 12 and Nhava Supply base and the other setworking at various other locations including Mumbai and Uran. Therewas variance in pay and allowance between these two categories ofworkmen. This was in the case of 1992 settlement whereas the 1995settlement followed similar line of categorisation, but included workmenengaged in Panvel to Mumbai and Uran. The same form of categorisationwas there in the “2000 Settlement.”

11. Appearing on behalf of the appellants Mr. Cama, learned seniorcounsel, has primarily argued on two points. His first submission hasbeen that the reference itself was not maintainable as none of theworkmen the Unions were representing or espousing the causes of wereemployed by the appellants. He has pointed out the definition of workmenin Section 2(s) of the Act in this behalf. The other point on whichsubmission was advanced by him was that the Settlement arrived at on19[th] September, 2016 covered all the employees of contractors,considering the provisions of Section 18(3)(d). The Unions have beenrepresented by Mr. Pallav Shishodia, learned senior counsel and Mr.Shaligram G. Mishra, respondent no. 1 appearing in person. The stand ofthe Unions on the other hand has been that the concerned workmenwere actually employees of the appellants and before the Tribunal itself,it was their case that their engagement by the contractor would not byitself make them contractors’ employees. It is also their stand that thesettlement of 19[th] September, 2016 could not be treated to be one underSection 18(3)(d) of the Act to bind the workmen represented by thethree Unions in this appeal. First, it has been contended that the saidsettlement has not taken final shape as certain procedural aspects forconclusion thereof is yet to be taken. It has also been argued on theirbehalf that the said settlement related to contractors’ workmen onlywhereas the workmen involved in the present proceeding were notemployees of the contractors who had signed the said settlement. Onthe other hand, the workers represented by the Union are working in theestablishment of the appellants for long period of time and they claimedto be entitled to the service benefits directly from ONGC.

12. The Tribunal rejected the objection on jurisdictional groundtaken on the point that the concerned workmen were not employees ofthe appellants and hence no dispute could lie with ONGC. The Tribunalhas also given the finding that the FWP could not be treated as fair

Asettlement as it entailed withdrawal of the proceedings lodged by individualworkmen or Unions. It has been urged on behalf of the respondents thatmany of these proceedings were for regularization or absorption directlyinto the appellant company, dispute which has intricate link with thecontroversy involved in the present proceeding. Mr. Cama has assertedthat the finding of the High Court on facts was perverse, and, on thatBcount, he invited interference by this Court in exercise of its jurisdictionunder Article 136 of the Constitution of India. He has relied on thedecisions of this Court in the cases of Workmen of the FoodCorporation of India vs. Food Corporation of India [(1985) 2 SCC136], Parimal Chandra Raha & Ors. vs. Life InsuranceCCorporation of India and Ors. [(1995) Supp (2) SCC 611], IndianPetrochemicals Corporation Ltd. and Anr. vs. Shramik Sena &Ors. [(1996) 6 SCC 439] and Steel Authority of India Ltd. & Ors.vs. National Union Waterfront Workers & Ors. [(2001) 7 SCC 1]in support of his submission that the workmen of the contractor wouldnot become the workmen of the principal employer. He has also citedDthe case of Secretary, State of Karnataka & Ors. vs. Uma Devi &Ors. [(2006) 4 SCC 1] to contend that there could not be backdoorentry of contractors’ employees directly into the establishment of theprincipal employer. This genre of cases has been cited mainly in supportof two propositions of law urged on behalf of the appellants. First is thatEthere must be jural relationship brought about by an agreement toestablish employer-employee relationship between contractors’employees and that of the principal employer. Secondly, abolition ofcontract labour in certain industries does not result in automatic absorptionof the workmen engaged by them in the concerned establishment. In thecase of Parimal Chandra Raha (supra), however, it has been held thatFwhere there was statutory requirement of maintaining of canteens andthe canteens of the respondent corporation had become part of theestablishment, the contractors engaged from time to time in reality wereagencies of the corporation and were only veil between the corporationand canteen workers. In the case of Steel Authority of India LimitedGof 2001 (supra), it has been held that abolition of contract labour in certainin any part of an establishment by notification under Section 10(1) ofthe Contract Labour (Regularization and Abolition) Act, 1970 (1970 Act)automatically does not lead to absorption of contract labour working inthose parts directly in the establishment concerned. The case of IndianPetrochemicals (supra) mainly follows the ratio laid down in the caseH

of Parimal Chandra Raha (supra). The proposition of law laid down inthe case of Steel Authority of India Limited vs. Union of India &Ors. reported in [(2006) 12 SCC 233] is that mutually destructive pleathat the employees were of contractor and the principal employer couldnot be taken. The ratio of the decision of Uma Devi (supra) also wouldnot apply in the facts of the present case. Here, the issue is not ofbackdoor entry into an establishment but finding out subsisting status ofa set of workmen on the question as to who is their actual employer. Fordetermination of the fate of the dispute raised by Unions, adjudication ofthe former question becomes inevitable.

13. Mr. Cama has emphasised on the ratio of the case of MukandLtd. vs. Mukand Staff and Officers’ Association [(2004) 10 SCC460]. In this judgment it has been held:-

“23. We have already referred to the order of reference dated17-2-1993 in paragraph supra. The dispute referred to by the orderof reference is only in respect of workmen employed by theappellant Company. It is, therefore, clear that the Tribunal, beinga creature of the reference, cannot adjudicate matters not withinthe purview of the dispute actually referred to it by the order ofreference. In the facts and circumstances of the present case,the Tribunal could not have adjudicated the issue of salaries of theemployees who are not workmen under the Act nor could it havecovered such employees by its award. Even assuming, withoutadmitting, that the reference covered the non-workmen, theTribunal, acting within its jurisdiction under the Act, could not haveadjudicated the dispute insofar as it related to the “non-workmen.”

14. As regards the lack of jurisdiction of the Tribunal to determineor adjudicate the dispute between the appellants and the workmenrepresented by the three Unions, perusal of the award does not revealthat this point was pressed before the Tribunal by the employer. Weaccept that the Tribunal could not go beyond the disputes that werereferred to it, as held in the case of Mukand Ltd. (supra). But legalityof the order of reference was challenged by ONGC in Writ Petition(C)No. 5045 of 2018. In the judgment of the Division Bench, which wehave already quoted, it was opined on the aspect of jurisdiction of theTribunal, that it was not open for the petitioner to complain at such abelated stage that the reference was not warranted. In the judgment of

Athe High Court under challenge before us, this question was dealt withand it was held :-

“5. Apropos the first objection of Mr. Talsania, which, accordingto him, goes to the root of the matter, it must be noted at the veryoutset that the jurisdiction of the tribunal in the present case toBadjudicate the reference was never questioned by ONGC on theground that the workmen represented by the second party werenot ‘workmen’ within the meaning of section 2(s) of the Act,particularly, because they were employees of contractors and notof ONGC. If this issue was not part of the lis before the referencecourt, there was no way it could be raised before the writ court.CThe issue is, after all, mixed issue of law and facts; it wouldhave to be adjudicated first before the trial court upon foundationalpleadings in that behalf being led before it, before the writ court,in its scrutiny of the order of the trial court, could be asked to gointo it.

6. Mr. Talsania, however, submits that the fact that these workmenwere employees of contractors is not really in dispute; thereference itself termed them as workmen engaged throughcontractors. The question is not whether the workmen wereengaged through contractors. That may indeed be an apparentEposition. The question is whether, by reason of perennial natureof the work at the premises of the principal employer, and havingregard to the circumstances bearing on their service and serviceconditions, whether the workmen could be said to be in realityemployees of the principal employer despite the apparent positionthat they were engaged through contractors. Indeed, there was aFclear statement on the part of the workmen in the statement ofclaim of the second party that they were in fact and in realityworkmen of ONGC and not of the contractors. No doubt, in itswritten statement, ONGC contested this position, and in theirrejoinder second party No.2 union reiterated its statement thatGthe contract/s was/were sham and bogus. It is apparent from theimpugned award of the tribunal, however, that this issue was notpressed by ONGC at the hearing. The issue anyway reflected onthe jurisdiction of CGIT to adjudicate the reference and ONGCdid not choose to contest the jurisdiction on the issue. Had theissue been pressed by ONGC before the reference court, the

second party would have led appropriate evidence in support ofits case in this behalf. It obviously chose not to do so, because thisquestion was not debated by ONGC before the reference court.Could the second party be then visited with the consequence ofhaving to deal with this issue merely on the basis of the materialavailable before this court at the stage of scrutiny under Articles226 or 227 of the Constitution of India. The answer would be anemphatic “no”. The second party would most certainly be seriouslyinconvenienced if it were now required to sustain its plea in thestatement of claim of the workmen being in reality employees ofONGC, without having had an opportunity to lead evidence insupport of such case before trial court. For whatever reasons,ONGC found it worth its while not to contest the jurisdiction ofthe tribunal in the reference and this court, sitting as writ court,must leave the matter at that and not scrutinize it any further.”15. On the question of raising issue of lack of jurisdiction beforethe Tribunal, the cases of Rattan Lal Sharma vs. ManagingCommittee, Dr. Hari Ram (Co-Education) Higher SecondarySchool & Ors. [(1993) 4 SCC 10], Secretary to Govt. of India andOthers vs. Shivram Mahadu Gaikwad [(1995) Supp (3) SCC 231]and Kalyani Sharp India Ltd. vs. Labour Court No.1, Gwalior &Anr. [(2002) 9 SCC 655] were relied upon by the appellants. We accept,as proposition of law, that if irregularity or illegality committed by aTribunal touches upon the jurisdiction to try and determine over subjectdispute is altogether beyond its purview, that question would go to theroot of the matter and it would be within the jurisdiction of the superiorcourt to correct such error. In the case of Kalyani Sharp India Ltd.(supra) raising plea on application of law was found permissible at theappellate stage before this Court, but in that case no fresh investigationof fact was required. But in the facts of the present case, it is not thequestion of inherent lack of jurisdiction on the part of the Tribunal. Thequestion of jurisdiction, as held by the High Court was mixed questionof fact and law. Both the cases of Rattan Lal Sharma (supra) andKalyani Sharp India Ltd. (supra) arose out of admitted fact. In thecase of Shivram Mahadu Gaikwad (supra) it was the limitation questionwhich went to the root of the matter. This case arose out of proceedingbefore the Central Administrative Tribunal. Point was taken before theTribunal by the Union of India but was not addressed to in the judgmentof the Tribunal. So far as the present proceeding is concerned, as reflected

Ain the judgment under appeal, there was clear statement on the part ofthe workmen in the statement of the second party (Union) before theTribunal that in fact and reality, the concerned workmen were employeesof ONGC and were not of the contractors. This was denied by theONGC but in their rejoinder the said Union reiterated their stand that thecontracts were sham and bogus. In the award, certain other referenceBorders were cited which involved adjudication of the question as towhether contracts between ONGC’s contractors and workmen engagedby them were sham and bogus. (Ref. No. CGIT I 16, 17, 18 and 19/2005) or not and if the said workmen in reality were ONGC’s workmenonly. In the case of Steel Authority of India of 2001 (supra), it hasCbeen laid down that in cases where plea is raised that contract is foundto be sham and nominal, camouflage to suppress the actual status of aworkman vis-à-vis who his employer is, the veil could be pierced to findout the such status. If to this perspective is added the fact that earlierthree MoUs were entered into directly by ONGC with the Unionsrepresenting contractors’ workmen, this question does not remain aDquestion of law alone, to be sustained with the aid of the ratio of thecases of Rattan Lal Sharma (supra), Shivram Mahadu Gaikwad(supra) and Kalyani Sharp India Ltd. (supra). Signatories to the earlierMoUs were the appellants and the Unions and Section 30(2) of theContract Labour (Regulation and Abolition) Act, 1970 permits contractElabourers to enter into agreements with principal employers. Thus, bythemselves, the aforesaid MoUs would not establish that the contractworkmen are workmen of the principal employer. But the circumstanceswhich we have narrated clearly point to the relationship between theappellants and the workmen represented by the respondent Unions inthat direction. The stand that the concerned workmen were employeesFof the principal employer were not specifically outlined in the reference,but was implicit therein. In the reference order the dispute therein wasbetween ONGC and the Union. The Charter of Demand was also raisedagainst ONGC. The Tribunal examined the issue and returned its findingwhich was upheld by the High Court. This was finding of fact. In theGcase of National Engineering Industries Limited vs. State ofRajasthan & Ors. [(2000) 1 SCC 371] it has been held that the IndustrialTribunal is the creation of statute and it cannot go into the question onvalidity of the reference. That issue ought to be considered by the HighCourt, according to the appellants. So far as the present proceeding isconcerned, the High Court has considered that question and we do notH

find any error in the approach of the High Court in deciding the jurisdictionquestion against the appellants.

16. Next comes the issue as to whether the settlement of 19[th]September, 2016 was binding on the Unions who are before us asrespondents, having regard to the provisions of Section 18(3) (d) of theAct. Section 18 of the Act stipulates:-

“18. Persons on whom settlements and awards are binding.-(1) settlement arrived at by agreement between the employerand workman otherwise than in the course of conciliationproceeding shall be binding on the parties to the agreement.

(2) Subject to the provisions of sub-section (3), an arbitration awardwhich has become enforceable shall be binding on the parties tothe agreement who referred the dispute to arbitration.

(3) settlement arrived at in the course of conciliation proceedingsunder this Act or an arbitration award in case where notificationhas been issued under sub-section (3A) of section 10A or an awardof Labour Court, Tribunal or National Tribunal which has becomeenforceable shall be binding on—

(a) all parties to the industrial dispute;

(b) all other parties summoned to appear in the proceedings asparties to the dispute, unless the Board, arbitrator, Labour Court,Tribunal or National Tribunal, as the case may be, records theopinion that they were so summoned without proper cause;

(c) where party referred to in clause (a) or clause (b) is anemployer, his heirs, successors or assigns in respect of theestablishment to which the dispute relates;

(d) where party referred to in clause (a) or clause (b) is composedof workmen, all persons who were employed in the establishmentor part of the establishment, as the case may be, to which thedispute relates on the date of the dispute and all persons whosubsequently become employed in that establishment or part.”

17. In the case of Ramnagar Cane and Sugar Company Ltd.vs. Jatin Chakravorty & Ors. [(1960) 3 SCR, 968], the binding natureof settlement on all persons employed in an establishment has beenexplained, having regard to Section 18(3)(d) of the Act. This principle

Awas reaffirmed in the case of General Manager, Security Paper Mill,Hoshangabad vs. R.S. Sharma and Others [(1986) 2 SCC 151]. Ithas been laid down in the case of Ramnagar Cane and Sugar CompanyLtd. (supra):-

“5. In appreciating the merits of the rival contentions thus raisedBin this appeal it is necessary to bear in mind the scheme of theAct. It is now well settled that an industrial dispute can be raisedin regard to any matter only when it is sponsored by body ofworkmen acting through union or otherwise. When an industrialdispute is thus raised and is decided either by settlement or by anaward the scope and effect of its operation is prescribed by SectionC18 of the Act. Section 18(1) provides that settlement arrived at

by agreement between the employer and the workman otherwisethan in the course of conciliation proceeding shall be binding onthe parties to the agreement; whereas Section 18(3) provides thata settlement arrived at in the course of conciliation proceedingsDwhich has become enforceable shall be binding on all the partiesspecified in clauses (a), (b), (c) and (d) of sub-section (3). Section18(3)(d) makes it clear that, where party referred to in clauses(a) or (b) is composed of workmen, all persons who were employedin the establishment or part of the establishment, as the case maybe, to which the dispute relates on the date of the dispute and allEpersons who subsequently become employed in that establishmentor part, would be bound by the settlement. In other words, therecan be no doubt that the settlement arrived at between the appellantand the Employees’ Union during the course of conciliationproceedings on February 25, 1954, would bind not only the membersFof the said Union but all workmen employed in the establishmentof the appellant at that date. That inevitably means that therespondents would be bound by the said settlement even thoughthey may belong to the rival Union. In order to bind the workmenit is not necessary to show that the said workmen belong to theUnion which was party to the dispute before the conciliator.GThe whole policy of Section 18 appears to be to give an extendedoperation to the settlement arrived at in the course of conciliationproceedings, and that is the object with which the four categoriesof persons bound by such settlement are specified in Section 18,sub-section (3). In this connection we may refer to two recentHdecisions of this Court where similar questions under Section 19(6)

and Section 33(1)(a) of the Act have been considered. (Vide:Associated Cement Companies Ltd., Porbandar v. Workmen [Civil Appeal No. 404 of 1958 decided on 3.3.1960] and New IndiaMotors (P.) Ltd. v. K.T. Morris.”

Same proposition of law was reiterated in the case of BarauniRefinery Pragatisheel Shramik Parishad vs. Indian Oil CorporationLtd. [(1991) 1 SCC 4].

18. In the case of ANZ Grindlays Bank Ltd. vs. Union ofIndia & Ors. [(2005) 12 SCC 738], this Court, while testing referencefound no subsisting industrial dispute and the reference was set aside.This authority also does not assist the appellants in the facts of the presentcase.

19. Now we shall test the appellants’ arguments on binding effectof the settlement dated 19[th] September, 2016 on the workmen whosecause the respondent Unions are espousing before us. The High Courtdealt with this question in the following manner:-

“13. That brings us to the question as to whether the MoS of 19September 2016, even if it were to be termed as settlement inthe course of conciliation proceeding, could be said to be fairsettlement so as to bind workmen who were not party to it. Thetribunal, in the present case, has arrived at an unequivocal findingthat the settlement could not be termed as fair. It, particularly, hastaken into account the fact that the MoS of 19 September 2016required the workmen concerned to withdraw their legitimatedisputes and complaints on the issues of regularization, etc. as acondition of settlement. It is important to bear in mind in this behalfthat when the reference was made, there were about 1300workmen, covered by the earlier MoU 29 December 2000, whowere originally sought to be protected as against about 2000 oftotal number of contract employees with ONGC working inMumbai, Panvel, Uran and Nhava. The other employees werenot covered by the MoUs executed earlier by ONGC with theunions. If these other workmen and their union/s were to agree toa fair wage policy, which is not on the basis of the earlier MoUsexecuted between ONGC and the unions, such policy, on the basisof such agreement, cannot be termed as fair policy for theworkmen covered by the earlier MoUs and whose references or

Acomplaints for their legitimate demands were pending beforevarious industrial adjudicators. Anyway, on the facts availablebefore this court, the conclusion of the Tribunal that the MoS of19 September 2016 could not be termed as fair settlement,particularly, for the workmen covered by the earlier MoUs, cannotbe termed as perverse. This court cannot bring itself to hold thatBno reasonable person could have given any such finding. Thefinding is clearly supported by some evidence; it does take intoaccount all relevant and germane circumstances and materials;and it does not consider any non-germane or irrelevantcircumstance or material. It must, in that case, pass muster as aCpossible conclusion, which is not amenable to judicial scrutiny eitherunder Article 226 or 227 of the Constitution of India.”

20. The appellants’ case is that Unions representing above 77percent of the workmen engaged by the contractors had agreed to thatsettlement. In the case of Tata Engineering and Locomotive Co.DLtd. vs. Their Workmen [(1981) 4 SCC 627], this Court permitted asettlement to be binding which was assailed by set of workmen. Inthat case, one set of Unions had entered into settlement which hadbeen assented to by 564 out of 635 daily-rated workmen. The finding ofthe Tribunal was that the settlement was not just and fair. This Court,however, allowed the appeal of the employer and set aside the award.EBut this judgment is not an authority for the proposition that differentset of workmen cannot raise an industrial dispute claiming to be workmendirectly under the principal employer. Recognition of such right of minorityworkmen would be apparent from paragraph 12 of the said report [(1981)4 SCC 627], which reads:-F“12. There is no quarrel with the argument addressed to us onbehalf of the workers that mere acquiescence in settlement orits acceptance by worker would not make him party to thesettlement for the purpose of Section 18 of the Act [videJhagrakhan Collieries (P) Ltd. v.G.C. Agarwal, PresidingGOfficer, Central Government Industrial Tribunal-cum-LabourCourt, Jabalpur [(1975) 3 SCC 613 : 1975 SCC (L&S) 63 : AIR1975 SC 171 : (1975) 2 SCR 873] ]. It is further unquestionablethat minority union of workers may raise an industrial disputeeven if another union which consists of the majority of them entersinto settlement with the employer (vide Tata Chemicals Ltd. v.

Workmen [(1978) 3 SCC 42 : 1978 SCC (L&S) 418 : AIR 1978SC 828 : (1978) 3 SCR 535] ). But then here the Company is notraising plea that the 564 workers became parties to the settlementby reason of their acquiescence in or acceptance of settlementalready arrived at or plea that the reference is not maintainablebecause the Telco Union represents only minority of workers.On the other hand the only two contentions raised by the Companyare:

“(i) that the settlement is binding on all members of theSanghatana including the 564 mentioned above because theSanghatana was party to it, and

(ii) that the reference is liable to be answered in accordancewith the settlement because the same is just and fair.”

21. In the case of ITC Ltd. Workers’ Welfare Association &Anr. vs. Management of ITC Ltd. & Anr. [(2002) 3 SSC 411], it hasbeen, inter-alia, held:-

“14. In answering the reference the industrial adjudicator has tokeep in the forefront of his mind the settlement reached underSection 12(3) of the Industrial Disputes Act. Once it is found thatthe terms of the settlement operate in respect of the dispute raisedbefore it, it is not upon to the Industrial Tribunal to ignore thesettlement or even belittle its effect by applying its mind independentof the settlement unless the settlement is found to be contrary tothe mandatory provisions of the Act or unless it is found that thereis non-conformance to the norms by which the settlement couldbe subjected to limited judicial scrutiny….”

22. In the instant case we do not find the settlement of 19[th]September, 2016 to be one which would be binding on the minority Union.That was settlement essentially between the contractors and workmenengaged by the former. The appellants were only consenting parties tothe settlement. This position of the appellants is apparent from thedescription of the parties to the said settlement, which records:-

“MEMORANDUM OF SETTLEMENT ARRIVED AT UNDERSECTION 12(3) OF THE INDUSTRIAL DISPUTES ACT, 1947BEFORE SHRI B.B. BHATNAGAR, CONCILIATIONOFFICER & DY. CLC(C), AS RESULT OF AND IN THECOURSE OF CONCILIATION PROCEEDINGS HELD ON

398SUPREME COURT REPORTS

[2022] 19 S.C.R.

A19.09.2016 AND SIGNED BY THE CONTRACTORS,EMPLOYERS OF CONTRACT WORKERS DEPLOYEDFOR PERFORMANCE OF CONTRACTS IN ONGCLIMITED, WESTERN OFFSHORE UNIT MUMBAIINCLUDING PANVEL, URAN AND NHAVA, ANDCONTRACT WORKERS REPRESENTED THROUGHBTRANSPORT & DOCK WORKERS UNION-MUMBAI,ONGC (BOP) KARMACHARI SANGHATANAPETROLEUM EMPLOYEES UNION, GENERALEMPLOYEES ASSOCIATION, ONGC GENERAL KAMGARSANGHATANA AND NHAVA SHEVA PORT & GENERALCWORKERS UNION, AS MENTIONED BELOW OVERCHARTER OF DEMANDS, INCLUDING REVISION OFWAGES AND OTHER SERVICE CONDITIONS OFCONTRACT WORKERS IN WESTERN OFFSHORE UNIT.”23. The dispute out of which the present appeal arises relates toDthe question as to whether the workmen engaged by the contractorswould be entitled to pay at par with other workmen of the employer anddemand to that effect was raised with the appellants only. The respondentUnions claimed to be, in reality, employees of ONGC and the demandwas raised upon the latter, and not on their contractors. The nature oftheir demand was thus different particularly as regards the status of theEworkmen, i.e., their claim to be workmen of ONGC. Thus, the settlementof 19[th] September, 2016, in which the employers were the contractorscannot bind the subject-dispute, where the appellants have been foundto be the employer on the basis of materials considered by the HighCourt. Their engagement by the contractors cannot be the sole basis forFdetermining their status as workmen of contractors.

24. For these reasons, we accept the High Court’s affirmation ofTribunal’s finding that the settlement of 19[th] September, 2016 did notbind the workmen whose cause the respondent Unions are espousing.The finding of the Tribunal that the settlement involving implementationGof the FWP was not just and fair, which finding has been sustained bythe High Court is essentially finding on facts based on appreciation ofevidence. We are of the opinion that such finding is not tainted by anyelement of perversity. The ratio of the decision in the case of ITC Ltd.Workers’ Welfare Association (supra) would not apply in the facts ofthe present case.H

25. Having held so, we would not like to interfere with the reliefdirected to be given by the High Court. The scope of jurisdiction of theIndustrial Court is wide and in appropriate cases it has the jurisdictioneven to make contract. In our opinion, the directives issued by theTribunal, as modified by the High Court are reasonable and cannot betermed as perverse. In the case of Steel Authority of India of 2006(supra), referring to the Contract Labour (Regulation & Abolition) Act,1970 it was opined:-

“20. The 1970 Act is complete code by itself. It not only providesfor regulation of contract labour but also abolition thereof.Relationship of employer and employee is essentially questionof fact. Determination of the said question would depend upon alarge number of factors. Ordinarily, writ court would not go intosuch question.”

So far as the judgment under appeal is concerned, the High Courthas taken similar approach and we do not intend to take differentview. The principle of limited interference would apply to proceedingof this nature under the 1947 Act.

26. The appeal is accordingly dismissed and the impugned judgmentis sustained. Interim order, if any, shall stand dissolved.

27. Other applications, if any, stand disposed of.

28. There shall be no order as to costs.

Bibhuti Bhushan Bose and Amarendra Kumar(Assisted by : Iram Jan, LCRA)

Appeal dismissed.