# ' )- ~ FOOD CORPORATION OF !NOIA & ANR v. PALA RAM & ORS - **Citation:** [2008] 9 S.C.R. 549 - **Court:** Supreme Court of India - **Decided:** 2008-05-16 - **Case number:** Civil Appeal Nos. 3641-42 of 2008 - **Bench:** S.B. Sinha, V.S. Sirpurakar - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/food-corporation-of-noia-anr-v-pala-ram-ors-24882 - **Pages:** 30 ## Headnote -)- Labour Laws - Contract Labour - Abolition - Notification by Central Government - Subsequently the Notification withdrawn - Thereafter, again Central Government adopting the c .. Notification without noticing the withdrawal thereof - Supreme '\, court by judgment in *Air India case held that after the issuance of the above Notification contract labourers became direct employees of the concerned management - By the judgment in **Steel Authority case judgment in Air India case over0 -..... ruled and the Notification quashed with prospective effect - Action giving effect to the Notification, if already attained finality, was saved - High Court passing orders giving effect to the Notification in respect of a particular unit - Subsequent writ petitions by employees of other units seeking relief in view E of the judgments of the High Court - Allowed by High Court - Other writ petitions by employees Union and also the workmen seeking protection under the Notification - Dismissed by High Court- On appeal, held: The Notification having been . )' withdrawn, cannot be said to have attained finality and hence not saved by Steel Authority case - High Court did not pose F unto itself the question of applicability of the decision of High Court in respect of one unit to other units- The writ petitions filed by the employee Union as well as the employees were not maintainable in the facts of the case - Contract Labour ( Regulation and Abolition) Act, 1970 - s. 10 (1) - Industrial G -"( Disputes Act, 1947 - s. 25 (h). Appellant-Corporation maintained large number of godowns in different parts of the country including States 549 H 550 SUPREME COURT REPORTS (2008] 9 S.C.R. A of Punjab and Haryana. Government of India in exercise of its power u/s 10 (1) of Contract Labour (Regulation and Abolition) Act, 1970 issued a Notification No. S.O. No. 779 (E) dated 9.12.1976 prohibiting employment of contract Labour. In Food Corporation of India workers' Union v. Food B Corporation of India and Ors. 1985 (2) sec 294 decision was taken as regards the appropriate Government for deciding abolition of contract labour. Thereafter Central Government issued a Notification on 28.5.1992 stating that no case for abolition of contract labour in respect of the jobs c of sweeping, cleaning, dusting and watching of buildings in the appellant-Corporation was made out. In *Air India Statutory Corporation and Ors. v. United Labour Union and Ors. 1997 (9) sec 377 it was held that all the contract labourers became direct employees of the respective manD agements after issuance of Notification dated 9.12.1976. By the judgment in **Steel Authority of India Ltd. and , Ors. v. National Union Waterfront workers and Ors. 2001 (7) sec 1 the judgment in Air India case was overruled and the Notification dated 9.12.1976 was quashed with proE spective effect. Several writ petitions were filed before High Court. In LPA No. 742/1993 Division Bench of High Court by order dated 21. 7 .1998 held that contract Labours in the depots of the appellant-Corporation were entitled to the benF efit of Air India case. '1 In another writ petition (469511999) High court opined that Notification dated 9.12.1976 became final vis-a-vis the establishments of appellant-Corporation in Sangrur DisG trict and hence Steel Authority case did not apply to them. Thereafter appellant-Corporation issued advertisements for enrolment of agencies for provision of security r coverage of its godownslcomplexes in Haryana and Chandigarh. In the writ petitions (CWP Nos. 15484 of 2003; H 16476 of 2003 and 16482 of 2003) challenging the same ' ' ·' FOOD CORPORATION OF INDIA & ANR. v. PALA 551 RAM & ORS. )- Division Bench of High Court set aside the advertisements A holding that the workmen were not covered by Steel Authority case by virtue of its Para 125 (b) and hence entitled to the benefit of the Notification dated 9.12.1976. Employees' Union of the appellant-Corporation filed B writ petitions (CWP Nos. 4891 of 204 and ## Text _Characters 0–39,576 of 57,426. This is a partial read: ask again with offset=39576 for what follows._ [2008] 9 S. C.R. 549 ' )- ~ FOOD CORPORATION OF !NOIA & ANR. A V. PALA RAM & ORS. (Civil Appeal Nos. 3641-42 of 2008) MAY 16, 2008 B [S.B. SINHA AND V.S. SIRPURAKAR, JJ.] -)- Labour Laws - Contract Labour - Abolition - Notification by Central Government - Subsequently the Notification withdrawn - Thereafter, again Central Government adopting the c .. Notification without noticing the withdrawal thereof - Supreme '\, court by judgment in *Air India case held that after the issuance of the above Notification contract labourers became direct employees of the concerned management - By the judgment in **Steel Authority case judgment in Air India case over0 -..... ruled and the Notification quashed with prospective effect - Action giving effect to the Notification, if already attained finality, was saved - High Court passing orders giving effect to the Notification in respect of a particular unit - Subsequent writ petitions by employees of other units seeking relief in view E of the judgments of the High Court - Allowed by High Court - Other writ petitions by employees Union and also the workmen seeking protection under the Notification - Dismissed by High Court- On appeal, held: The Notification having been . )' withdrawn, cannot be said to have attained finality and hence not saved by Steel Authority case - High Court did not pose F unto itself the question of applicability of the decision of High Court in respect of one unit to other units- The writ petitions filed by the employee Union as well as the employees were not maintainable in the facts of the case - Contract Labour ( Regulation and Abolition) Act, 1970 - s. 10 (1) - Industrial G -"( Disputes Act, 1947 - s. 25 (h). Appellant-Corporation maintained large number of godowns in different parts of the country including States 549 H 550 SUPREME COURT REPORTS (2008] 9 S.C.R. A of Punjab and Haryana. Government of India in exercise of its power u/s 10 (1) of Contract Labour (Regulation and Abolition) Act, 1970 issued a Notification No. S.O. No. 779 (E) dated 9.12.1976 prohibiting employment of contract Labour. In Food Corporation of India workers' Union v. Food B Corporation of India and Ors. 1985 (2) sec 294 decision was taken as regards the appropriate Government for deciding abolition of contract labour. Thereafter Central Government issued a Notification on 28.5.1992 stating that no case for abolition of contract labour in respect of the jobs c of sweeping, cleaning, dusting and watching of buildings in the appellant-Corporation was made out. In *Air India Statutory Corporation and Ors. v. United Labour Union and Ors. 1997 (9) sec 377 it was held that all the contract labourers became direct employees of the respective manD agements after issuance of Notification dated 9.12.1976. By the judgment in **Steel Authority of India Ltd. and , Ors. v. National Union Waterfront workers and Ors. 2001 (7) sec 1 the judgment in Air India case was overruled and the Notification dated 9.12.1976 was quashed with proE spective effect. Several writ petitions were filed before High Court. In LPA No. 742/1993 Division Bench of High Court by order dated 21. 7 .1998 held that contract Labours in the depots of the appellant-Corporation were entitled to the benF efit of Air India case. '1 In another writ petition (469511999) High court opined that Notification dated 9.12.1976 became final vis-a-vis the establishments of appellant-Corporation in Sangrur DisG trict and hence Steel Authority case did not apply to them. Thereafter appellant-Corporation issued advertisements for enrolment of agencies for provision of security r coverage of its godownslcomplexes in Haryana and Chandigarh. In the writ petitions (CWP Nos. 15484 of 2003; H 16476 of 2003 and 16482 of 2003) challenging the same ' ' ·' FOOD CORPORATION OF INDIA & ANR. v. PALA 551 RAM & ORS. )- Division Bench of High Court set aside the advertisements A holding that the workmen were not covered by Steel Authority case by virtue of its Para 125 (b) and hence entitled to the benefit of the Notification dated 9.12.1976. Employees' Union of the appellant-Corporation filed B writ petitions (CWP Nos. 4891 of 204 and 4887 of 2004) seeking their employment as per the Circular of 1976. The -)o_ writ petition was dismissed by High Court with liberty to approach Labour Court. " Some other employees of the appellant-Corporation c also filed a writ petition contending that the employees who had been working as watchman could not have been asked to appear at a test. High Court dismissed the writ petition in view of judgment in Secretary, State of Karnataka and Ors. v. Umadevi and Ors. 2006 (4) SCC 1. Hence the D present appeals. Disposing of the appeals, the Court HELD: 1.1 By the judgment of this Court in Steel Au- .... thority of India Limited and in particular clause (b) of para ' E 125 thereof, the judgment in Air India has been overruled prospectively. What has been directed is that despite the said judgment, if any order had been passed or any action had been taken giving effect to the Notification dated .,, y 9.12.1976, the same would not be called in question in any Tribunal or Court including the High Court subject to F the condition that the same has otherwise attained finality or had been implemented. What was required to be ~ implemented or finality attached to any judgment deliv- ' ered or action taken, relates to the Notification of the Central Government dated 9.12.1976. From the discussions G of the judgments of the High Court it is not evident that - .... the said Notification dated 9.12.1976 had been given effeet to. [Paras 21 and 22] [571-E-H, 572-A] i4 1.2 Central Government upon becoming the approH ~t 552 SUPREME COURT REPORTS [2008] 9 S.C.R. A priate Government in relation to the appellant-Corpora- -( tion issued a Notification on or about 28.5.1992. The validity of the said Notification is not in question. Once the prohibition purported to have been made by the Central Government in terms of its Notification dated 9.12.1976 B stood withdrawn with effect from 28.5.1992, the question of prohibiting employment of contract labour in sweeping or watching buildings owned or occupied by all the establishments of Food Corporation of India, inter alia, >(- would not arise. [Para 22] [572-A,B,C] c 1.3 By reason of the Office Memorandum dated 8.2.1999, the Central Government acting as the 'appropriate Government' in respect of the Food Corporation of India opined that the Notification dated 9.12.1976 is applicable to it and the Regional Labour Commissioner (C) D Chandigarh has initiated action to enforce the said Notification. The Circular No. 2 of 1999 dated 23.3.1999 issued by the Food Corporation of India is to the same effect )..- whereby it was directed not to engage the contract labour in the jobs specified in the Notification dated 9.12.1976. E What however has not been noticed is the Notification issued under Section 10 (1) of Contract Labour (Regulation and Abolition) Act, 1970 by the Central Government itself in the year 1992 whereby the Central Government withdrew its Circular dated 9.12.1976. The effect of the F Notification issued under sub-Section (1) of Section 10 of '1 the 1970 Act cannot be taken away by a Circular letter is- • sued by the Central Government or by the appellant itself. [Para 22] [572-E,F, 573-A,C,D] 1.4 The right of the workmen to file a writ petition for G obtaining a writ in the nature of mandamus must be based on a legal right. This Court in Steel Authority of India Limited only recognized an existing right and not any future yright. Such a right was to be existing as on 30.8.2001 i.e. the date of judgment and not thereafter. Any decision renH dered thereafter could not confer a right much less any FOOD CORPORATION OF INDIA & ANR. v. PALA 553 RAM & ORS. '>- other right. In terms of the aforementioned judgment, what A has been done is to recognize such a right and not declaring the same afresh. The law as enunciated in Steel Authority of India Limited is very clear. Even the provisions of 1970 Act are unambiguous and explicit. There has to be a Notification abolishing contract labour as regards B watching of the buildings or godowns belonging to the Corporation for the purpose of storage of foodgrains. --· ~ [Para 22) [573~0,E,F] 1.5 Application of the judgment passed in LP.A. No. 742 of 1993 in relation to the Sangrur establishment of c the Corporation is not in dispute. But the question as to whether in absence of any valid Notification abolishing contract labour the same could be held to be binding on other establishments or not required serious consideration. The High Court in its judgment did not pose any D such question. [Para 24] [574-C,D,E] 2.1 The writ petition filed by the employees' Union and that filed by the employees apparently proceeded on the basis that they were appointed by the Corporation. In E the writ petition filed by employees camouflage was pleaded. What was sought to be contended was that the contractor was supplier of labour. It was not the contention that the watchmen had been deployed by the con- .. y tractor. The gravamen of the contention is that for all intent and purport they have been appointed by the CorpoF ration itself. The writ petition, therefore, was not maintainable. [Para 24] [574, F,G, 576-A] 2.2. The writ petitions of the workmen do not disclose the names of the contractors. It has not been disclosed G as to whether the contractors were registered or not. What are the terms and conditions of employment have also not been stated. On and from which date each individual was appointed and by which contractor and in respect of which establishment has not been disclosed. The writ H 554 SUPREME COURT REPORTS [2008] 9 S.C.R. A petition filed by the employees categorically show that -( • the averments made therein proceeded on the basis that the actual employer was the Corporation. If that be so, having regard to the decision of this Court in Steel Authority of India Limited the writ petition could not have been enterB tained. No authority or forum has scrutinized the records. The registers maintained by the so-called contractors had not been scrutinized. It was obligatory on the part of the High Court to take recourse thereto. The benefit of any or- "' . der or action taken must have a direct nexus with the Notic (ication dated 9.12.1976. Notification dated 9.12.1976 ceased to have any application, question of its attaining finality in law would not arise. [Para 25] [576-D-H, 577-A] 2.3 Keeping in view the decision of this Court in Steel Authority of India Limited , it is evident from the writ petition D itself that another right, viz., a right under Section 25(h) of the Industrial Disputes Act, 1947 had been claimed. The benefit of Steel Authority of India Limited was sought to be invoked without stating the requisite foundational facts therefor. [Para 27] [577-D,E] E 2.4 The High Court may not be correct in following the Constitution Bench decision of this Court in Umadevi case but there cannot be any doubt whatsoever that the ultimate conclusion of the High Court is correct, particuF larly, when it had categorically been stated in the written reply of the Corporation that the recruitment for the post -, ( provided for a test so that it could be determined as to whether the candidates were literate or not. A series of disputed questions of fact therefore were raised. Even on that premise, the writ petition was, thus, not maintainable. G [Para 27] [577-G, 578-A,D] Steel Authority of India Limited and Ors. v. National Union r Waterfront Workers and Ors. 2001 ( 7) SCC 1 - applicability clarified. H Secretary, State of Karnataka and Ors. v. Umadevi and FOOD CORPORATION OF INDIA & ANR. v. PALA 555 RAM & ORS. [S.B. SINHA, J.] - )- Ors. 2006 (4) SCC 1- held inapplicable. A Bharat Heavy Electric Ltd. v. ES.I. Corporation, AIR 2008 SCW 1494;"Food Corporation of India Workers' Union v. Food Corporation of India and Ors." 1985(2) S.C.C. 294; Air India Statutory Corporation and Ors. v. United Labour Union and B Ors. 1997 (9) S.C.C. 377 - referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. ~- )> 3641-42 of 2008 From the final Judgment and Order dated 23.01.2004 & 21.5.2004 of the High Court of Punjab and Haryana at c Chandigarh in CWP No. 16482 of 2003 & in Review Application No. 146 of 2004 respectively WITH C.A. Nos. 3655-56, 3657 & 3654 of 2008 D Ajit Pudussery for the Appellants. Dharmendra Kumar Sihna and S. Janani for the Respondents. The Judgment of the Court was delivered by E S.B. SINHA, J.1. Leave granted. 2. The case has a chequered history. • y Appellant has been constituted under the Food CorporaF tion of India Act, 1964. For the purpose of carrying out its activities, it maintains a large number of godowns in different parts of the country including the States of Punjab and Haryana. As the law stood then, the respective State Governments were considered to be the appropriate Government in respect of the appeflant. Various State Governments issued Notification prohibG iting employment of contract labour in some processes in its ---; establishments purported to be in exercise of its power under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 (for short, "the Act"). H I A B c D E F G H 556 SUPREME COURTREPORTS [2008] 9 S.C.R. Indisputably, the Government of India in exercise of the same power issued a Notification bearing Nci. S.O. No. 779(E) on or about 9.12.1976 to the following effect: "S.O. No. 779(E) - In exercise of the power conferred by sub-section (1) of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (37 of 1970) the Central Government after consultation with the Central Advisory Contract Labour Board, hereby prohibits employment of contract labour on and from the 1.3.1977, for sweeping, cleaning, dusting and watching of buildings owned or occupied by the establishments in respect of which the appropriate Government under the said Act is the Central Government: (emphasis supplied) Provided that this notification shall not apply to the outside cleaning and other maintenance operations of multi~ storeyed buildings where such cleaning or maintenance operations cannot be carried out except with specialized experience." In a decision of this Court titled "Food Corporation of India Workers' Union v. Food Corporation of India & ors." reported in (1985) 2 S.C.C. 294, it was held: "On the interpretation of the relevant sections extracted above, we hold that the 'appropriate Government' for the purpose of this case pertaining to the regional offices and their warehouses in the respective States is the State Government and not the Central Government." 3. However, on or about 28.1.1986, the definition of 'Appropriate Government' was amended by Act 14of1986 in terms whereof, the Central Government was declared to be the 'appropriate Government', inter alia, so far as establishments of FCI are concerned. 4. The Central Government thereafter issued a Notifica- -~ - - y , y- ....... FOOD CORPORATION OF INDIA & ANR. v. PALA 557 RAM & ORS. [S.B. SINHA, J.] tion oh or about 28.5.1992 stating that no case for abolition of A . contract labour in respect of the jobs of sweeping, cleaning, dusting and watching of buildings in Food Corporation of India was made out. It reads as under: To, "No. U.23013/11/89-LW Government of India : Ministry of Labour Jaisalmar House, Mansingh Road, NewDelhi, Dated 28'h May, 1992 All the members of Central Advisory contract Labour Board. B c Subject: Report (Part-I) of the Committee constituted to D study the working of Contractor Labour System in Sweeping, Cleaning, Dusting and Watching of Buildings owned or occupied by establishments in respect of which the Central Government has become the appropriate government after the amendment in 1986 of the Contract E Labour (Regulation and Abolition) Act, 1970. Sir, I am directed to refer to this Ministry's letter of even No. dated 3rd April, 1992 and to say that the matter relating to . the dusting and watching of buildings owned or occupied F by the Corporation of India. Unit Trust of India, and Central Warehousing Corporation was discussed in the 24th meeting of the Central Advisory Contract Labour Board held on 29.02.1992 at New Delhi under the Chairmanship of Union Deputy Labour Minister. It was inter-alia decided G to leave the matter further for a decision by Government keeping in views the views expressed in the matter. 2. In pursuance of the recommendations of the Board, the matter has been considered in detail by the Central H A B c D E F G H 558 SUPREME COURT REPORTS [2008] 9 S.C.R. Government and it has been decided not to prohibit employment of Contract Labour in the sweeping, cleaning, dusting and watching of Building owned or occupied by the establishments, of Food Corporation of India, Industrial Finance Corporation of India, for which the appropriate Government under the Contract Labour (Regulation and Abolition) Act, 1970 is the Central Government. Yours faithfully, Sd/- (Smt. P. Vankatachalam) Deputy Secretary of the Govt. of India And Secretary of the Central Advisory Contract Labour Board." 5. The question as to whether on abolition of contract labour, the contract labourers working under the contractors became direct employees of the management, has been debated in various High Courts. The question came up before this Court in Air India Statutory Corporation & Ors. v. United Labour Union & ors. reported in (1997) 9 S.C.C. 377 where it was held that all the contract labourers on issuance of Notification dated 9.12.1976 became the direct employees of the respective managements. The decision of this Court in Food Corporation of India Workers' Union (supra) however was not noticed. 6. A series of writ petitions thereafter were filed before the Punjab & Haryana High Court. In one of the matters, a Division Bench of the said Court in LPA No. 7 42 of 1993 by a judgment and order dated 21.7.1998 opined that the contract labour in the depots of the appellant by reason of the said notification dated 9.12.1976, the workmen were entitled to the benefits of the said decision of Air India (supra) holding: "Accordingly, on finding the work to be perennial nature, it )r v .. .,..,. FOOD CORPORATION OF INDIA & ANR. v. PALA 559 . ).. RAM & ORS. [S.B. SINHA, J.] had recommending and the Central Government had A considered and accepted the recommendation to abolish the recommendation to abolish the contract labour system in the afore-said services. Having abolished it the Central Government was denuded its power under Section 10( 1) I to again appoint insofar as the above services of the B .... )t Mohile Committee· to go once over into the self - same question and recommendation of the latter not to abolish the contract labour system in the above service and the acceptance there of by the Central Government are without any legal base and therefore nonest." c 7. It was also held that the Central Government was the appropriate Government in view of the decision of this Court in Air India (supra), stating : "11. After recording the above mentioned conclusions their D Lordships examined the correctness of the directions given by Bombay High Court for enforcement of the notification dated 09-12-1976 qua to the establishment of the Corporation and upheld the same. 12. In view of the judgment of the Supreme Court in Air E India Statutory Corporation's Case (supra) approving decision of the Bombay High Court which has direct bearing on the case of the appellant, the impugned order .... of the learned Single Judge in which he dissented from the decision of the Bombay High Court cannot be regarded F as laying down correct law. In our opinion the interpretation given by the Apex Court to the definition of appropriate Government is also sufficient to upset the impugned judgment. 13. In the result we allow and set aside the order of the G --.... learned Single Judge. Consequently the writ petition filed by the appellant is accepted and the respondent - Corporation is directed to give effect to the notification dated 09.12.1976 while making employment in its establishment. As a logical corollary, the respondent is H 560 SUPREME COURT REPORTS [2008] 9 S.C.R. A restrained from employ watchman for its godowns as contract labour." B c 8. Indisputably, a Special Writ Petition filed thereagainst by the petitioner was dismissed by an order dated 30.8.1999 stating: "In view of the circular No. 2 of 1999 dated 23.3.1999 by the Food Corporation of India and Office Memorandum No. S-16-11/2/99-LW dated 8.2.1999 issued by the Government of India, this Special Leave Petition deserves to be dismissed. The Special Leave Petition is, therefore, dismissed." 9. This question, however, again came up for consideration before a Constitution Bench of this Court in Steel Authority of India Limited & ors. v. National Union Waterfront WorkD ers & ors. ((2001) 7 sec 1]. The Constitution Bench took a different view. Air India (supra) was overruled prospectively. It was held that there being no provision under the Act to direct absorption of the contract labour on abolition thereof, Air India (supra) did not lay down a good E law, stating: F G H "107. An analysis of the cases, discussed above, shows that they fall in three classes: (1)where contract labour is engaged in or in connection with the work of an establishment and employment of contract labour is prohibited either because the industrial adjudicator/court ordered abolition of contract labour or because the appropriate Government issued notification under Section 10(1) of the CLRA Act, no automatic absorption of the contract labour working in the establishment was ordered; (it) where the contract was found to be a sham and nominal, rather a camouflage, in which case the contract labour working in the establishment of the principal employer were held. in fact and in reality, the employees of the principal employer himself. Indeed, such cases do not y • y- - ).. -~ FOOD CORPORATION OF INDIA & ANR. v. PALA 561 RAM & ORS. [S.B. SINHA, J.] relate to abolition of contract labour but present instances A wherein the Court pierced the veil and declared the correct position as a fact at the stage after employment of contract labour stood prohibited; (iii) where in discharge of a statutory obligation of maintaining a canteen in an establishment the principal employer availed the services 8 of a contractor the courts have held that the contract labour would indeed be lhe employees of the principal employer. *** *** *** 119. We are not persuaded to accede to the contention c that a workman, who is not an outworker, must be treated as a regular employee of the principal employer. It has been noticed above that an outworker falls within the exclusionary clause of the definition of "workman". The word "outworker" connotes a person who carries out the D type of work, mentioned in sub-clause {C) of clause (1) of Section 2(1 ), of the principal employer with the materials supplied to him by such employer either (1) at his home, or (ii) in some other premises not under the control and management of the principal employer. A person who is not an outworker but satisfies the requirement of the first E limb of the definition of "workman" would, by the very definition, fall within the meaning of the term "workman". Even so, if such a .workman is within the ambit of the contract labour, unless he falls within the aforementioned classes, he cannot be treated as a regular employee of F the principal employer. 120. We have also perused all the Rules and forms prescribed thereunder. It is clear that at various stages there is involvement of the principal employer. On an G exhaustive consideration of the provisions of the CLRA Act we have held above that neither they contemplate creation of direct relationship of master and servant between the principal employer and the contract labour nor can such relationship be implied from the provisions H 562 SUPREME COURT REPORTS [2008] 9 S.C.R. A of the Act on issuing notification under Section 10(1) of the CLRAAct, a fortiori much less can such a relationship be found to exist from the Rules and the forms made thereunder." The summary of the decision was outlined in paragraph B 125; the relevant portions whereof are as under: c D E "(2)(a) A notification under Section 10(1) of the CLRAAct prohibiting employment of contract labour in any process, operation or other work in any establishment has to be issued by the appropriate Government: (1) after consulting with the Central Advisory Board or the State Advisory Board, as the case may be, and (2) having regard to (1) conditions of work and benefits provided for the contract labour in the establishment in question, and (ii) other relevant factors including those mentioned in sub-section (2) of Section 1 O; (b) Inasmuch as the impugned notification issued by the Central Government on 9-12-1976 does not satisfy the aforesaid requirements of Section 10, it is quashed but we do so prospectively ~ - i.e. from the date of this judgment and subject v F G H to the clarification that on the basis of this judgment no order passed or no action taken giving effect to the said notification on or before the date of this judgment, shall be called in question in any tribunal or court including a High Court if it has otherwise attained finality and/or it has been implemented. (3) Neither Section 10 of the CLRA Act nor any other provision in the Act, whether expressly or by necessary implication, provides for automatic absorption of contract labour on issuing a notification by the appropriate FOOD CORPORATION OF INDIA & ANR. v. PALA 563 .... lir RAM & ORS. [S.B. SINHA, J.] Government under sub-section (1) of Section 10, A prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently the principal employer cannot be required to order absorption of the contract labour working in the establishment concerned. B ~ )r (4) We overrule the judgment of this Court in Air India case prospectively and decfare that any direction issued by any industrial adjudicator/any court including the High Court, for absorption of contract labour following the judgment in Air India case shall hold good and that the c .· same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final. (5) On issuance of prohibition notification under Section D -~ 10(1) of the CLRAAct prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the E ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract or is " "( a mere ruse/camouflage to evade compliance with various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine F but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the establishment concerned subject to the conditions as may be specified by it for that purpose G _,,, in the light of para 6 hereunder. (6) If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRAAct in respect of the establishment concerned has been issued by the H A B c D E 564 SUPREME COURT REPORTS [2008) 9 S.C.R. appropriate Government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation · or other work of the establishment the principal employer intends to employ ~egular workmen, he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately, taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications." The meaning of the expression "industrial adjudicator" was stated in the following terms: "126. We have used the expression "industrial adjudicator'' by design as determination of the questions aforementioned requires enquiry into disputed questions of facts which cannot conveniently be made by High Courts in exercise of jurisdiction under Article 226 of the Constitution. Therefore, in such cases the appropriate authority to go into those issues will be the Industrial Tribunal/Court whose determination will be amenable to judicial review." 10. Interpretation of the decision of this Court in Steel AuY ., F thority of India Limited (supra) vis-a-vis the circulars issued by the Central Government as also by the appellant fell for consideration in a large number of writ petitions filed by the concerned workmen of different establishments of the appellant. 11. We have noticed hereinbefore the decision of the DiG vision Bench of the Punjab & Haryana High Court rendered in L. P.A. No. 7 42 of 1993. The said decision itself was construed ydifferently. Whereas one Division Bench in its judgment and order dated 22.8.2002 passed in Writ Petition No. 4695of1999 titled "Sunil Kumar Vs. FCI & Ors." opined that the said NotifiH cation dated 9.12.1976 became final vis-a-vis the establish- FOOD CORPORATION OF INDIA & ANR. v. PALA 565 RAM & ORS. [S.B. SINHA, J.] -.. ment of FCI in Sangrur District, as noticed hereinafter, other A Benches of the said Court, however, took a different view. We may, however, notice the Division Bench decision in "Sunil Kumar" wherein it was held: "The only argument which survives for consideration of B this Court is whether the petitioners are entitled to claim benefit of the directions contained in sub-para No. (6) of .... )' paragraph No. 121 of the judgment in Steel Authority of India's case (supra). Learned counsel for the petitioners contended that the judgment in relation to Food c . Corporation India Class IV Employees Union (Regd.) Sangrur, has attained finality and has been implemented and, thus, would fall under the exception carved out by the Hon'ble Apex Court in clause (2)(b) of paragraph No. 121 and, therefore, the petitioners are entitled to the relief limited to the extent that the Corporation would grant them D preferential treatment in terms of sub-para (6) of paragraph 121 of the judgment. According to him, by issuing the letters of 1999 and the judgment of the Letters Patent Bench as well as the Apex Court would make the judgment enforceable in favour of all employees of the Food E Corporation India, irrespective of territory, as the judgment would have to be read as a judgment in rem and not in personem. In other words, the Food Corporation India being the respondent in these petitions, is bound to enforce )' ... the judgment qua all its employees and particularly those F who are working in the State of Punjab." 12. Posing the question as to what would be the meaning of the expression "if it has otherwise attained finality and/or it has been implemented" used in Steel Authority of India Lim- . ited (supra) and having noticed the fact that the Notification dated G 9.12.1976 stood set aside by the Constitution Bench of this . --,. Court, it was observed that the appellant cannot justify refusing relief to the employees of the same sector of the Corporation, rather same District, i.e. Sangrur in the following terms : H 566 SUPREME COURT REPORTS [2008] 9 S.C.R. A "It is not disputed that Sunam is a part of District Sangrur ~ and the petitioners are well within their rights to claim the -