M/S OIN EXCHANGE (INDIA) LTD. vs SATVEER KAUSHIK AND ORS.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of order: 31st January, 2024
+ W.P.(C) 13598/2018 & CM APPL. 21090/2021 & CM APPL. 20168/2023
M/S OIN EXCHANGE (INDIA) LTD. ….. Petitioner
Through: Ms.Roopali Chaturvedi, Advocate

versus

SATVEER KAUSHIK AND ORS. ….. Respondents
Through: Kamlesh Kumar Mishra (DHLSC) Along with Ms. Renu, Bibhuti Bhusan Mishra, Ms.Shamisti Solomon, Ms.Megha Gupta & Ms.Trupty Juyal, Advocates

CORAM:
HON’BLE MR. JUSTICE CHANDRA DHARI SINGH

ORDER

CHANDRA DHARI SINGH, J (Oral)
1. The petitioner vide the present petition under Article 226 read with 227 of the Constitution of India, seeks the following reliefs:
“G) Set-aside the Award dated 25.09.2017 passed by Labour Court No. IX in I.D.No.290/14
H) Pass such other order as this Hon’ble Court deems fit in the facts and circumstances of the case.”

2. The petitioner company is an entity engaged in the business of manufacture, operation and maintenance of water purification. In the year, 2002, the petitioner successfully participated in a Tender bearing no. IRCTC/RN/PROJ/2002/02 notified by the respondent no. 16 (‘respondent Corporation’ hereinafter) for operation and maintenance of a bottling plant for packaged drinking water plant situated in Nangloi, New Delhi.
3. Pursuant to the successful bidding, the parties i.e. the petitioner and the respondent Corporation entered into an agreement dated 17th July, 2003 for a period of 5 years. In the said agreement, the petitioner was defined as the contractor and the respondent Corporation was termed as the purchaser.
4. Thereafter, the petitioner entity engaged an agency namely M/s AVM Services (respondent no. 7) for the supply of contract labour and entered into a contract dated 1st August, 2003. Pursuant to the said contract, the respondent no. 1- 6 (‘respondent workmen’ hereinafter) started working at the said plant of the petitioner.
5. In the year 2006, the respondent workmen were terminated, leading to filing of a dispute bearing ID no. 290/2014 before the learned Labour Court. The learned Court examined the statement of claims and heard the matter, and thereafter passed the impugned award dated 25th September, 2017 thereby, directing the petitioner entity to compensate the respondent workmen for the illegal retrenchment.
6. Aggrieved by the same, the petitioner has filed the present petition.
7. Learned counsel appearing on behalf of the petitioner submitted that the impugned award is liable to be set aside since the learned Labour Court failed to take into consideration the entire facts and circumstances available on its record, and hence erred in passing the said award.
8. It is submitted that the impugned award suffers from illegality as the learned Labour Court followed a flawed and erroneous line of interpretation in holding the respondent Corporation as the principle employer and petitioner as the contractor for the purpose of the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter “the Act”).
9. It is submitted that the learned Court below failed to appreciate that the petitioner and the other management except respondent no. 7 had no control over the payment of salaries to the respondent workmen. Therefore, no liability arises on part of the petitioner.
10. It is submitted that the contract agreement dated 17th July, 2003, was misconstrued by the learned Labour Court as it failed to examine the facts of the dispute in totality.
11. It is submitted that the learned Labour Court erred in holding that the clause 7.3 of the agreement provides for sole liability on the petitioner entity in case of wrongful termination.
12. It is also submitted that the respondent workmen were supplied to the respondent Corporation through a sub-contractor, i.e., respondent no. 7 and therefore, they should have been labeled as a contractor under the Act, and not the petitioner herein.
13. It is further submitted that despite being the supplier of the respondent workmen, the respondent no. 7 was not made party to the original dispute and were only included by way of amendment dated 15th April, 2009, and in spite of the same, the learned Court failed to amend the issues framed before the inclusion of the said respondent.
14. Therefore, in view of the foregoing submissions, the learned counsel for the petitioner prays that the present petition be allowed and impugned award be set aside.
15. Per Contra, the learned counsel appearing on behalf of the respondent workmen vehemently opposed the instant petition submitting to the effect that impugned award has been passed in accordance with the law and hence, there is no infirmity thereto which makes the petition liable to be dismissed being devoid of any merits.
16. It is submitted that the failure of payment on part of the contractor would automatically shift the burden on the principle employer, i.e. the petitioner.
17. It is submitted that the respondent workmen were employed under the establishment of the petitioner and the respondent Corporation and therefore, they are the principal employers as defined under Section 2(g) of the Act.
18. It is submitted that the above said provision covers any person/entity responsible for the supervision and control of the establishment and terms the same as the principal employer, which in present case would be both the petitioner and the respondent Corporation.
19. It is submitted that the agreement entered between the petitioner and the respondent Corporation clearly provides for liability upon the petitioner to provide and employ site of operation and maintenance of the said site which also includes the responsibility to take care of the workman employed to perform the task.
20. It is submitted that the sub-contract dated 8th April, 2003 entered between the parties i.e. the petitioner and the respondent no. 7 was for the supply of the respondent workmen which clearly defines the role of the respondents which can directly be construed as workmen for the establishment.
21. It is also submitted that even if clause 7.3 of the original agreement dated 17th July, 2003 is interpreted in a way where the respondent no. 7 is also held liable to pay for retrenchment, the fact that the respondent workmen were employees of the petitioner cannot be denied.
22. It is further submitted that the impugned award specifically mentions that the petitioner had the responsibility to manage the site of the respondent Corporation and therefore, the obligation to provide manpower for the same also lies with the petitioner only.
23. In view of the foregoing submissions, the learned counsel for the respondent workmen prays that the present petition, being devoid of any merits, may be dismissed.
24. Heard the learned counsel for the parties and perused the records.
25. The petitioner entity has approached this Court against the impugned award claiming that the learned Labour Court failed to appreciate the material facts and therefore, wrongly held the petitioner to be liable for payment of compensation for the retrenchment of the respondent workmen. It has been submitted that the petitioner entity has been wrongly termed to be the employer of the workmen which clearly is not the case. In light of the same, the petitioner submits that the impugned award suffers from illegality making it liable to be set aside.
26. Therefore, this Court needs to examine whether the impugned award suffers from illegality and in order to ascertain whether the same is liable to be set aside or not, the extracts of the evidence of the parties and arguments advanced by them before the learned Labour Court have been reproduced here under:
“EVIDENCE OF WORKMEN
9. In support of the case workmen Sateer Kaushik has appeared as WW1 and filed his evidence by way of affidavit Ex.WW1/A, workman Rajesh Chand appeared as WW2 and filed his evidence by way of affidavit Ex.WW2/A, Dashrath Pd., Appeared as WW3 and filed his evidence by way of affidavit Ex.WW3/A , Kishan Chand Yadav appeared as WW4 and filed his evidence by way of affidavit Ex.WW4/A, Rajesh Gupta appeared as WW5 and filed his evidence by way of affidavit Ex. WW5/A, Pramod Tyagi appeared as WW6 and filed his evidence by way of affidavit Ex. WW6/A, Manphool Singh appeared as WW7 and filed his evidence by way of affidavit Ex. WW7/A, Rama Kant appeared as WW8 and filed his evidence by way of affidavit Ex.WW8/A, Sunil Gupta appeared as WW9 and filed his evidence by way of affidavit Ex.WW9/A. No document was filed by the workmen in their examination in chief. The cross examination of all the nine workmen were deferred. The other workmen did not appear in the witness box in support of their case.
10. On 08.08.2007 cross-examination of WW1, WW3, WW6 and WW9 was treated as Nil. Op. given by the predecessor of this court and case was fixed for remaining workmen evidence.
11. Thereafter workmen has moved an application u/o 1 rule 10 CPC for impleading M/s AVM services and the said application was allowed vide order dt. 22.04.2008 passed by the Predecessor court. Management N4 was summoned, who appeared but did not file W/S and opportunity of management No. 4 to file W/S was forfeited vide order dt. 21.01.2009. On the same day since none had appeared on behalf of management No. 2 and 3, they were proceeded exparte.
12. Thereafter workmen moved an application for amendment of the claim qua management No. 4 which was allowed vide order dt. 15.04.2009 by the then POLC.
13. Thereafter workmen filed amended statement of claim. The brief facts as mentioned in the amended statement of claim are that the workmen were the contract employee of management No. 3 & 4 within the ambit and as defined under sec. 2(B)(i) of contract labour (regulation and abolition) act, 1970 r/w Sec.2(s) of Industrial disputes act 1047; that management No. 1 is contractor as defined, u/sec. 2(g) of contract Labour Act and are the management and Industry within the ambit of sec. 2(j) of l.d. act while the management No. 3 & 4 at its establishment at the Rail Neer Plant, Rohtak Road, Nangloi, New Delhi-41 for preparing, purifying and packaging the water in the plant, run and under the control and which is undertaking of govt. of India. The details of nature of work and salary and time of commencement of the employment of the each workmen is given in para no. 3 of the claim that the workmen had been performing their duties to the satisfaction of managements but they were not provided the basic amenities/working facilities such as holidays, over time, bonus, HRS,DA. Provident Fund, gratuity etc., to the workmen and used to deduct he monthly salary or each workmen towards the leaves; that workmen requested management No.1 and 3 several times to grant them all the facilities and perks but of no avail; that in December 2005 when the workmen demanded these amenities, it asked the workmen to proceed on leave in the wake of New Year and to resume their duties in month of January 2006 and so thinking that good sense might be prevailing in the mind of managements, they proceeded on leave in December 2005 and when reported to their duties and approached to the plant of managements, their officials did not allow them to resume duties by looking out after threatening to kill them alive ; that managements have illegally expelled workmen Satveer Kaushik, Manphool Singh, Rejender Paswan, Rajesh Chand and Krishan Chand Yadav by not allowing them to resume their duties w.e.f. 06.1.2006 and management No. 1 and 2 arbitrarily transferred workmen pramod Tyagi. Dhoom Singh, Rama Kant, Harish Chand, Rajesh Gupta, Rajesh Chand and Sunil Gupta in the first week of January 2006 to the establishment of management no. 2 M/s Auto Link, assigning/ entrusting the work wherein they are neither trained not experienced and subsequently when they reported for taking up their new assignment at the establishment of management No. 2 they were not allowed to resume their duties, w.e.f. 08.01.2006 by management No. 2 hence the workmen were illegally terminated from services ; that on 28.01.2006 workmen No. 1 to 12 had issued the legal notice and workman no. 13 had issued legal notice on 10.02.2006 through DTDC Courier calling upon them to provide them joining of duties and to clear out their outstanding service monetary benefits but they did not respond that the workmen are rendered jobless by the management and the workmen have claimed reinstatement with smooth working conditions, service benefits and directions to the management not to transfer them from existing site to another site and to provide adequate security to their life and liberty and restraining the management from entering the working site.
14. after filing of amended statement of claim, management no. 4 was again allowed to-file W/S but since no W/S was filed by management No. 4 opportunity of filing W/S by management No. 4 was again closed vide order dt. 31.08.2010.
15. As the managements No. 2,3 and 4 did not appear even thereafter, they were again proceeded exparte vide order dt. 22.12.2011 and 11.04.2012 passed by the then Presiding Officer labour Court and the case was proceeded for exparte workmen evidence.
16. Thereafter on the application moved by management No 1 the exparte order was set aside qua management no. 1 vide order dt. 19.07.2012 passed by Sh. Chander Shekhar POLC and the case was adjourned for cross-examination of WW5, WW7 AND WW8.
17. The three workmen WW6 Pramod; WW7 Manphool and WW8 Ramakant were cross-examined and discharged.
18. Thereafter on 23.12.2015 the AR for workmen had closed workmen evidence and the case was adjourned for management evidence.

EVIDENCE ON BEHALF FOR MANAGEMENT NO. 1

19. The management No. 1 had produced Sh. C. Subarmanyam sr. Manager finance of Management No. 1 who has given his evidence by way of affidavit ex. MW1/A. He had tendered his evidence Ex.MW1/1 certificate of incorporation (OSR).Ex.MW112 Resolution (OSR), Ex. MW1/3 agreement dt. 17.07.2003 (OSR), Ex.MW1/4 agreement dt. 01.08.2003 with AVM Services(OSR). After examining MW1, AR for management No. 1 had closed its evidence on behalf of management No.1.
20. The other managements No. 2.3 and 4 are already exparte in the matter. They neither appeared not led any evidence.

ARGUMENTS OF AR FOR WORKMEN.

21. It is argued by Ld. AR for workmen that out of nine workmen management No. 1 has cross-examined only three workmen and remaining other workmen were not cross examined by management No. 1 and as such their case stands proved. It is argued that since management No. 1 was the principal employer, it is their duty to get the labour facilities provided. It is stated that as the other managements have not appeared to contest the case of the workmen, their case stands proved against those managements.

ARGUMENTS OF MANAGEMENT NO.1

22. It is argued by AR for management No. 1 that in fact all the workmen were employee of management No. 4, transferred by management No. 4 in January 2006 from the site of IRCTC to management No. 2 Auto Link but auto Link did not take them on duty. It is stated that none of the workmen worked under management No. 1, appointed the workmen nor paid PF, ESI or salary to them. No document is filed by workmen to prove the relationship and as such they have failed to prove relationship with management No. 1. The workmen have admitted the agreement between management No. 1 and 3, their case is not that the agreement between us is sham. Not having the license to engage contractor does not make the employees of the contractor as the employee of principal employer. Management No. 1 is not having any powers to take disciplinary action against the workmen. Workmen do not become of employees of principal employer in the absence of contractor. No document is filed by the workmen to proved that they were appointed, supervised by management no. 4 hence it is prayed that claim of workmen is liable to be dismissed against management No. 1 Ld. AR for management No. 1 has cited :
1. Kriloskar Mahale System Ltd. Pune vs Chander Kant Tuka Ram Ubhe & Ors.
2. APSRTO & Ors. Vs. g. Siri Niwas Reddy & Ors. LLR 2006 page 433.
3. M/s chand Chhap fertilizer and Chemical Ltd; Kanpur Vs. Labour Commissioner, U.P. Kanpur & Ors. LLR 2006 page 724.
4. Haldia Refinery Canteen employees Union Vs Indian Oil corporation Ltd LLR 2005 SC 529.
5. Sunil b Wagheia Vs Zuhoo Villa Zimkhana club & Ors. LLR. 2002 Bombay 1205.
6. Pramod Kumar Samal & Ors. VS National Eluminum co. Ltd. LLR 2002 Orrisa 318.
7. FCI & Ors. Vs Presiding Officer CGIT from labour Court-1 chandhi Garh Ors. LLR 2008 Punjab & Haryana 391.
8. Deena Nath & Ors. Vs. National Fertilizer Ltd. LLR 1992 Supreme court 46
9. New Delhi Mazdoor Union, Delhi Office & Establishment employees Union Vs standing conference of Public Enterprises (Scope) & Ors. Delhi Lawyer 1991(1)(2) 189 DB Delhi.
10. UCO Bank Vs. Presiding Officer & Ors. AD-V 1999 Delhi 514.
11. Suresh Chand Mathur vs Harish chand Mathur AD-IX 2010 Delhi 546. 12. Krishna Bhagya Gal Nigam Ltd. Vs Mohd. Raffi LLR 2006 Delhi 496.
13. Ravi N tikku Vs Depty commissioner SW & Ors. LLR 2006 Delhi 496.
14. Auto Mobile Associations of Upper India Vs Preliminary objections Labour Court – 2 & ors. LLR 2006 Delhi 851.
15. Extract of sec. 23 and 25 of contract Labour (Regulation & Abolition) Act 1970 is also relied upon.”

27. Upon perusal of the above, it is made out that both the parties i.e. the petitioner entity and the respondent workmen had placed necessary facts and evidences on record to supplement their respective claims. The aforesaid paragraphs also shows that the learned Labour Court pointed out that the respondent workmen were not provided basic amenities such as holidays, overtime, bonus, HRS, PA. Provident Fund, gratuity despite deductions for the same from their salaries.
28. Pursuant to the leading of evidence and claims of the respective parties, the learned Court below formulated three issues, first being the question of whether the management no. 1 i.e. the petitioner herein had deployed the respondent workmen at the premises of the respondent Corporation. Second, being the question of whether the respondent workmen were terminated illegally or not and third, being the quantum of compensation (if applicable) to be given to the respondent workmen.
29. While concluding in affirmative for the issue ‘I’, the Court below held the same in favor of the respondent workmen, thereby, terming them employees of the petitioner. The findings of the learned Court with respect to issue ‘I’ reads as follows:
“ISSUE NO. 1

25. The present claim is filed by 13 workmen out of whom only 9 workmen pursued the same and out of those 9 workmen, three workmen i.e. WW2, WW4 and.WW5 never appeared in witness box for their cross- examination and. as such their part recorded testimony will not be read in evidence-and it is held that they have failed to prove their case. Out of remaining 6 workmen, W/W1,WVW3 and WW9 are not cross-examined by, management no, 1 and managements No. 2 to 4 (who are exparte) and WW6, WW/7 and WW8 are cross-examined only by management No. 1 and other managements failed to cross-examine them. 26. Management’ No. 2 and 4 neither appeared not filed written statement in this case. Management No. 3 appeared, filed written statement and thereafter proceeded exparte.
27. Both management No. 1 and 3 denied the relationship, with workmen.
28. Management no. 3-stated that they deployed management no. 1 as their contractor and have no relationship with workmen. Workmen’s Have also admitted that they were deployed with management no. 3 through management no. 1.
29. However, management no. 1 has claimed that he was contractor of management no. 3; vide contract/agreement dt. 17.07.2003 and also executed an agreement dt. 08.04.2003 with M/s AVM Services to provide the workmen as per the requirement on daily basis and that workmen were appointed by M/s AVM Services and deployed at place of management no.. 3 to execute the respective job under their supervision and control and that eight employees, namely Rajesh, Sushil, Dhoom Singh, Pramod Tyagi, Babu Ram, Amit Kurinar, Deepak and Kishan Chand transferred vide letter dt. 05.01.2006 who reported to accept the same which were sent to them by post and thereafter they started abstaining and along with them other workers also absolutely started abstaining from duty’ and that AVM is constantly pursuing them to resume duty through different letters. It is stated workmen raised ID and before conciliation officer 5 workers taken full and final from AVM Service?. It is stated that they have no relationship with the workmen.
30. Though it is correct that the responsibility to prove employer and employee relationship’ is upon workmen but reliance can always be placed on the admitted facts between the parties.
31. As management no. 1 and other managements have not cross examined workmen -no. 1.3.9.11 it means they have not rebutted the statement of these workmen and have not contested their claim that they were employed by. management no. 1 and deployed at the place of management no. 3. So far as remaining workmen WW6, WW7 and WW8 are concerned, all the, three have accepted that workmen no. 3 had, given, a contract to management no. 1. All have stated that they have no knowledge that management no. 1, had entrusted the work to management no. 4 or whether-they were appointed by management no. 4 or paid wages or ESI/PF by management. no. 4. During their cross-examination management no. 1 it is stated that salary before conciliation officer was given by management no. 4. But it is clear that they were shown under the employment of management no. 4 is now known to the workers otherwise they would have made management no. 4 as party in the case. Management .No. 4 was added as party in this case later on, after., management no. 1 had filed the written statement mentioning that they were employees of its contractor management no. 4.
32. Management no, 4 have appeared in court but later on intentionally Stopped appearing and did not file any written statement to plead their defence but on their behalf management no. 1 had put suggestion to the workmen that few of them did not join at transferred place and other few stopped coming to their duties and all of them failed to join the duties despite letters sent tp them. This defence, ought to be of management no.4, was never put by-management no. 4 nor any documentary evidence eg. Transfer order or attendance report are place on record by management no. 1 who has only-.raised this defence. The workmen have categorically denied that they were transferred or failed to report at transferred place or were absenting from duties of their own. Hence without there being any supporting document, the plea of management no. 1 are not convincing and trustworthy. It is also worthwhile to mention here that management no. 4 has not filed written statement despite taking time and the submission of’ management no. 1 is not supported.
33. All the workmen have categorically deposed that they were deputed with management no. 3 through management no. 1 and were illegally terminated by both of them. Though management no. 1 has tried to show all the workmen as employees of its contractor/management no. 4 on the basis of the agreement between management no. 1 and management no. 4 dt. 01.08.2004 Ex.MW1/4 stating that management no. 1 .had engaged it for providing workforce and that workmen were employees of management no. 4 but not a single document is filed by management no. 1 to show that workmen were employees of management no. 4 or were paid ESI and PF under him.
xxx xxx xxx
35. Hence all the provisions mentioned above specially clause-7.3 specifically provide that in the event of retrenchment of workers by the contractor or sub contractor employed by the contractor during or after the completion of facilities,’ the contractor will pay the retrenchment compensation and .other benefits to the workers as per Industrial Dispute Act: Hence the entire responsibility as per original contract between the management no. 1 appoint any contractor, the ultimate responsibility on account of their retrenchment ‘s of management no. 1 only and management no. 1 cannot plead that the workers were not its employees. It is also pertinent to mention here that I have gone through the agreement between management no. 1 and management no. 4 and there is no specific work for
which the same was entered into between them. Putting a work force for the execution of a project which was given to the management no., 1 by management no. 3 on account of being a successful builder, is the responsibility of management no. 1 only. Merely saying that the workmen were employees of management no. 4 its sub-contractor cannot absolve it from the responsibility as mentioned in the original agreement between management no. 1 and management no. 2. The workmen categorically deposed that they are not aware if they were the employees of management no. 4 as it was management no. 1 who had deputed them at the place of management no. 3. No document is produced by management no. 1 to show that all the workmen were on the rolls of management no. 4 its sub-contractor or were appointed by management no. 4, As management no. 4 has chosen not to contest the proceedings, there is no corroboration to the facts- as projected by management no. 1. Moreover, it is relevant to mention that in the evidence by way of affidavit filed by all the six workmen, they have not uttered a single word against management no. 4 and relied upon the affidavits of evidence which were already filed on record prior to amendment of the claim hence the workmen have not claimed any relief against management no. 4 and their claim against management no. 2 and 4 is not proved.
36. Even if management no. 1 has entered into any sub contract with management no. 4, the ultimate responsibility qua the workmen is-only of management no. 1 in terms of the clauses of the agreement between management no. 1 and management no. 3 as referred above.
37. Accordingly in view of above discussion it is proved by the workmen that they were the employees no. 1, and deputed at the premises of management no.3 by management no.1 only. Accordingly this issue is decided in favour of workmen and against the management.”

30. The above cited paragraphs makes it clear that the learned Court had relied upon the contract dated 17th July, 2003, whereby clause 7.3 clearly specifies the role of the parties. In the said issue, the learned Labour Court held that the petitioner entity was responsible for compensating the workmen even if there is any sub-contract for employment of such workers as the terms in the agreement put an onus on the contractor, i.e. the petitioner herein.
31. Having dealt with the said issue, the learned Court adjudicated the other two issues and held as under:

“ISSUE NO. 2
38. All the workmen categorically deposed that on demanding the legal facilities they were asked to proceed on long leave by management no. 1 and 3 and when they reported, management no.1 and 3 did not allow them to resume their duties by looking out the premises. As already observed management no. 2,3 and 4 have not cross-examined any of the workmen, it leads on the inference that they have no rebuttal to this statement of this workmen. So far as the management no. 1 is concerned, got a single suggestion is put to any of the workmen rebutting this statement. Management no.1 or other managements have not disputed the working of all the workmen for more than 240 days with the management. As already observed the defence projected by management no.1 workmen being employees of management no. 4 regarding transfer of the workmen by management no. 4 or their abandoning the job of management no. 4 is. not proved by management no. 1.
39. WW3 Dashrath Pd., WW6 Pramod Kumar, WW7 Manphool, WW8 rama Kant and WW9 Sunil Gupta have all stated in their affidavit that in the first week of January 2006 management no. 1 and 2 have arbitrarily/ whimsically transferred them to the establishment of management no. 2 Auto Link wherein they were neither trained nor experienced and when they reported, they were not allowed to resume duty by management no.2 w.e.f. 08.01.2006 whereas WW1 Sarveer Kaushik have stated that he was not allowed to join duties w.e.f. 06.01.2006 and earlier thereof since December 2005.Not a single suggestion is put to any of the workmen by management no.1 controverting all the averments as raised by these workmen and as such the ubrebutted testimony of these workmen is to be believed. Management is not proved, as already observed by me in my findings on issue no. 1.
40. Accordingly, from the statement of all six workmen i.e.WW1 Satveer Kaushik, Dashrath Pd., WW6 Pramod Tyagi, WW7 Manphool Singh, WW8 Rama Kant and WW9.Sunil Gupta their case stands proved that they were illegally terminated by management no. 1 & 4 without following the provisions of Industrial Dispute Act. Hence this issue is decided in favour of the workmen and against the management.

ISSUE NO. 3
41.Now question is whether workmen, WW1, WW3, WW6, WW7, WW8 and WW9 should be reinstated or should be granted compensation. Workmen have not pleaded that they were unemployed since the date of termination, moreover it is presumption of fact that after illegal termination, they must not remain idle and must be working and as such I deem it appropriate to grant. compensation to them instead of reinstated. It is held by this Hon’ble Supreme Court of India in the case titled Employers, Management of central P&D Inst. Ltd. Vs. Union of India & Another, AIR 2005 Supreme Court 633 that it is not always mandatory to order reinstatement after holding the termination illegal and instead compensation can be granted by the Court. Similar views are expressed by Hon’ble Delhi High Court in case titled as Indian Hydraulic Industries Pvt. Ltd. Vs. Kishan Devi and Bhagwati Devi & Ors. ILR (2007) 1 Delhi 219 wherein it is held by the Court that even if the termination of a person is held illegal, Labour Court is not supposed to direct reinstatement along with full back wages and the relief can be moulded according to the facts and circumstances of each case and the Labour Court can allow compensation to a workman instead of reinstatement and back wages.
42.Accordingly, I grant a compensation of Rs. 1,50,000/-(Rupees One. Lac Fifty Thousand Only) to each workmen namely Satveer Kaushik, Dashrath Pd.Pramod Tyagi, Manphool Singh, Rama Kant and Sunil Gupta instead of reinstatement and back wages to be paid by Management no. 1, the amount of compensation shall be paid to the workmen within one month from the date the award becomes enforceable failing which the amount shall carry an interest @ 9% p.a. from the date it becomes due till the time it is realized. The claim of remaining workmen is dismissed. For want of proof.”

32. The perusal of the above said paragraphs states that the learned Labour Court had duly considered the evidence of both the parties in dispute and thereafter held the dispute in favor of the respondent workmen.
33. In issue ‘II’, the learned Court dealt with the dispute of retrenchment of the workmen and had taken the statements of the workers and the petitioner while holding the termination illegal.
34. In the said paragraphs of the impugned award, it is also specifically mentioned that the respondent workmen were ill treated by the petitioner entity where they were entrusted to be solely responsible for their wellbeing. Furthermore, paragraph no. 38 of the impugned order also clarifies that subsequent to them being sent on a long leave, they were denied rejoining therefore, creating an obstacle to resume their duties.
35. The said observations by the learned Labour Court makes it clear that the workmen were harassed/ill treated by the petitioner entity with the motive to remove them from the work.
36. In the last issue, i.e. determination of the compensation towards the retrenchment, the learned Court had directed the petitioner entity to pay a compensation of Rs. 1,50,000/- towards those who filed and participated in the dispute proceedings.
37. During the course of proceedings before this Court, the learned counsel appearing for the petitioner vehemently argued that the learned Court below failed to correctly interpret the provisions of the agreement dated 17th July, 2003, and therefore, wrongly held the petitioner entity to be the employer of the workmen whereas the respondent Corporation ought to have been held as the principal employer of the respondent workmen.
38. The relevant extracts of the said agreement are reproduced herein:
“7.1 Labour: The Contractor shall provide and employ on the site for the Operation Maintenance of the Plant such skilled, semi-skilled and unskilled Labour as is necessary for the proper and timely execution of the contract. The Contractor shall at all times during the progress of the contract use its best endeavors to prevent any unlawful, riotous, or disorderly conduct or behavior by or amongst its employees and Labour and Labour of its sub-contractors/contractors.
The contractor shall, in all dealings with its Labour and the Labour of its sub-contractors employed on or connected with the contract, pay due regard to the laws and regulations pertaining to the employment of Labour.
7.2 Labour Rules: In respect of all Labour directly or indirectly employed on the works by the contractor, the contractor shall comply with and implement all the Provisions of the Contract Labour (Regulation and Abolition) Act 1970, or any amendment thereof, and all legislation and Rules of the state and/or Central Government or other local authority formed from time to time governing the protection of health, sanitary arrangements to be provided by the purchaser, wages, welfare measure and safety of Labour employed on the works and the contractor shall be deemed to the Principal Purchaser for this purpose. The rules and other statutory obligations with regard to fair wages, welfare and safety measures, maintenance of register, ctc, will be deemed to be part of the contract. The contractor will get it registered with the concerned statutory authorities as provided in the act and shall be directly responsible of the authorities there under for compliance with the provisions thereof.
7.3 Provision of Minimum Wages Act and payment of wages. The contractor shall employ with the provisions and procedures of State Government’s Minimum Wages act 1948 & State Government’s Minimum Wages Fixation Act, 1962 and rules made there under in respect of all employees employed by the contractor or its sub-contractor (s) directly or indirectly for the purpose of carrying out the works. The contractor shall pay employees wages not less than the minimum rates of wages, if any, fixed by the State Government from time to time. The contractor’s/sub-contractor’s establishment will be subject to inspection, investigation, etc., by the Purchaser or its representative for assuring proper and faithful compliance of the provisions of the contract by the contractor (so with regard to the implementations of labor laws & other matters anticipated herein). The contract:/sub-contractors shall abide by the decisions and orders of the Purchaser with regard to any such matter and furnish if required, necessary compliance.
In the event of retrenchment of workers by the contractor or sub-contractors employed by the contractor during or after the completion of facilities the contractor will pay the retrenchment compensation and other benefits to the workers as per the Industrial Dispute Act.
If any money shall as a result of any claim of application made under the said acts, be directed to be paid by the Purchaser, such money shall be deemed to be money payable to the Purchaser by the contractor and/or failure by the contractor to repay the Purchaser, and money paid by the Purchaser as aforesaid, latest within 30 days after the same shall have been demanded from the contractor, the. Purchaser shall be entitled to recover the same from any money due or accruing to the contractor under this or any other contract with the Purchaser, failing which such amount shall be considered as debt due from the contractor to the Purchaser.

7.4 Reporting of Accidents: The contractor shall be responsible for the safety of its own and its sub-contractors’ workmen and employees. All accidents at site are to be immediately reported to the required authorities. The contractor shall be responsible for all such accidents.
7.5 Provision of Workmen’s Compensation Act: The contractor shall be liable for in respect of any damages or compensation payable by law in respect of or in consequences of any accident or injury to any workmen or other person in the employment of the contractor or any of its sub-contractors and the contractor shall save harmless and shall indemnify and keep indemnified the Purchaser against all such damages and compensation and against all claims, demands, proceedings, costs, charges and expenses, whatsoever, in respect thereof or in relation thereto. The contractor shall at all times indemnify and keep indemnified the Purchaser against all claims for compensation under the provisions of the workmen’s Compensation Act, 1923, (VIII of 1923) or any other law for the time being in. forces by or in respect of any workmen employed by the contractor or its sub-contractors/agencies in crying out the contract and against all costs and expenses or penalties incurred by the Purchaser in connection therewith: In every case in which by virtue of the provisions of Section-I2, Sub-Section (1) of the Workmen’s Compensation Act, 1923, the Purchaser is obliged to pay compensation to a workmen employed by the contractor or its sub-contractors/agencies, the amount of compensation so paid and without prejudice to the rights of the Purchaser under Section-12, Sub-section (2) of the said Act, the Purchaser shall be at liberty to recover such amount or any part thereof from he security deposit or from the sums due or to become due to the contractor /whether under this contract or any other contract).
The Purchaser shall not be bound to contest any claim made against him under section-12; Sub-section (1) of the said Act, except on the written request of the same or his Sub-contractors/agencies and upon their giving to the Purchaser full security 10r all costs for which the Purchaser might become liable in consequence of contesting such claims.
7.6 Provisions of Apprentices Act: The contractor shall comply with the provisions of the Apprentices Act, !961, and the rules and orders issued there under from time to time. If contractor fails to do so, his failure may be treated as breach of the Contract and the Purchaser may, in its discretion, terminate the contract.
The contractor shall also be liable for any pecuniary liability arising on account of any violation by him of the provisions of the said Act.
7.7 Labour Returns: The contractor shall, if required by the Purchaser, submit periodical statements of labour employed by the contractor in the perform prescribed by the Purchaser from time to time.
7.8 Preservation of Peace: The contractor shall take requisite precautions and use its best endeavor to prevent riotous or unlawful behavior by or amongst his workmen and/or other employed on the works by the contractor or its sub-contractors and for the preservation of peace and protection of the inhabitants and security of the property in the neighborhood of the works/site. In the event of the Purchaser requiring the maintenance of a special police force at or in the vicinity of the site during the tenure of the contract in consequence of the riotous or unlawful behavior by or amongst the contractor’s or its sub-contractor’s workmen and/others employed by the contractors/sub-contractors all expenses thereof and costs of all damages due to such riotous or unlawful behavior shall be, borne by the contractor and it paid by the Purchaser, shall be recoverable from the contractor from. any money due or that may become due to the contractor by the Purchaser.
7.9 Payment of Wages: The contractor shall make regular and prompt payment of wages to the labour engaged in the work and in no case should the payment be delayed mere than seven days following the period for which the wages are due. The contractor shall send a certificate to the Purchaser to this effect every month. If it is found that workers are not paid regularly, the contract is liable to the terminated. As a number of contractors may be working at the same time in the erection of different parts of the facilities, there is need for pursuance of a coordinated policy in regard to employment, wages, and other conditions of work. The contractor shall consult the Purchaser on all such matters to arrive at mutually agreed settlements.
7.10 Sanitary Arrangements: The contractor shall comply with all sanitary rules in force and carry out all sanitary measures and permit inspection of all sanitary arrangements at all reasonable times by the Purchaser and or Statutory Authorities.
7.11Infectious Diseases: The contractor shall employ such persons as are found to be free of contagious diseases and shall produce if required by the Purchaser, certificate of fitness of all his employees working at site. The contractor shall, if required by the Purchaser, subject all its employees to regular medical checkup and produce satisfactory evidence of their being free from any contagious disease. The contractor shall remove from its Labour camp such Labour and their families who refuse protective inoculations and vaccination when called upon to do so by any competent authority.
7.12 Use of Intoxicants: The use of sale of ardent spirits or other intoxicating beverages, upon the works or in any of the building, boarding houses, encampments or other tenements owned, occupied by or within the control of the contractor or any of its employees or its sub- contractor is strictly forbidden and the contractor shall secure strict compliance.
7.13 Age Limits of Labour: The contractor shall not employ for the purpose of the work, any person below the age as its statutorily forbidden. The Purchaser shall have the right to refuse to allow any Labour, which the Purchaser considers to be underage to be employed by the contractor. The contractor shall submit periodical statements of Labour employed by the contractor to the Purchaser.
7.14 Provident Fund: The contractor shall be solely responsible for deduction and contributions under the Employees Provident Fund and Family Pension Act, 1952 and the scheme made there under as amended from time to time. The contractor shall be solely responsible for the maintenance of records for payment of contributions and submission of returns in accordance with the said act and scheme
In case the contractor fails to make payments under the above Act and the scheme made there under and as amended from time to time, the Purchaser reserves the right to make such payment on behalf’ of the contractor on demand from the authorities under the Act and recover the same from the payments due to the contractor. Further, tire contractor shall indemnify and keep indemnified the Purchaser against any loss or damage whatsoever that may be suffered by the Purchaser as a result of any claims, damage, penalties for any failure, non-compliance on his part with the provisions of the aforesaid Act and its: scheme framer there under.
7.15 Observance by Sub-Contractors: The contractor shall also be responsible for the compliance of all the above clauses by. his Sub-contractor(s). All contractors’ equipment brought by the contractor onto the site shall be deemed to be intended to be used exclusively for the execution of the contract. The contractor shall not remove the same from the site without the representative’s consent that such contractor’s equipment is no longer required for the execution of the contract.
7.16Site Regulations and Safety: As the works under the contract are to be carried out within the protected area, the contractor shall abide by all the security regulations promulgated from time to time by the Purchaser/other concerned authorities.
The contractor shall comply with the site regulations, during the execution of the contract at the site. Such site regulations include, but not limited to, rules in respect of security, safety of the facilities, gate control, sanitation, medical care, and fire prevention.
The employees/Labour of the contractor/sub-contractor and plant & equipment brought to site shall be subject to gate pass to be issued by security department or the respective department.
Preparation of gate pass normally takes around 10 days time. The contractor/sub- contractor shall plan their program in advance accordingly.
All representatives and workers of the contractors/sub-contractors shall possess admit pass issued by the security department on the recommendation of the Purchaser. Purchaser shall have the right to refuse pass to any workers or representatives without assigning any reasons.
The contractor shall ensure that gate pass issued to their workers/representatives/sub- contractors by the Purchaser are not misused by unauthorized persons for entry in the plant area or in specified area inside the plant. It shall amount to breach or rules and regulations regarding entry into a prohibited place by the contractors in case any admit pass issued on their demand is found to be misused by unauthorized person.
7.17 Care of Facilities: Any loss or damages that may occur to the facilities or the relevant part thereof from any cause whatsoever during such period. The contractor shall also be responsible for any loss or damage to the facilities caused by the contractor: or its sub-contractors in the course of any work carried out.
Contractor will take out and maintain adequate insurance policies for their personnel and for works executed by then under the contract.
Purchaser shall be indemnified by the Contractor against any violation of the aforesaid Acts and Rules and shall accept the liability for their breach.”

39. Upon perusal of the same, it is made out that clause 7.3 is of imperative for the adjudication of the issue at hand. Plain reading of the said clause makes it clear that the contractor, i.e. the petitioner in the instant case shall be responsible for compliance with the minimum wages and other rules made by the Government.
40. The said sub-clause also makes it evident that the issue of retrenchment, i.e. the illegal termination shall be taken care by the contractor and not the respondent Corporation. Furthermore, the liability of any payment towards such retrenchment was solely to be borne by the petitioner entity and not the respondent Corporation.
41. In view of the foregoing discussion, this Court is of the opinion that even though both the petitioner and the respondent Corporation could have been termed as the employer of the respondent workmen, the issue of the liability towards workmen is on the petitioner entity in terms of the agreement dated 17th July, 2003.
42. The conditions laid down in the contract signed by the parties makes it amply clear that the petitioner entity had undertaken the responsibility to make payments towards the workmen in case of retrenchment, therefore, the arguments advanced by the learned counsel for the petitioner for divisions of the responsibility cannot be accepted at this stage as the petitioner had earlier agreed to be solely responsible for the laborers.
43. Furthermore, the relevant statutory provision, i.e. Section 21 of the Act provides for payment of the wages (if in default) where the contractor shall be held responsible for the same.
44. In the instant case, the learned Court below had rightly held that the petitioner shall be the contractor and therefore, will be liable to pay compensation to the respondent workmen.
45. In view of the same, this Court is of the view that the impugned award is correct and therefore, cannot be set aside on the basis of the grounds taken by the learned counsel for the petitioner and therefore, the instant petition is liable to be dismissed.
46. Therefore, in view of the aforesaid discussions of facts and law, it is held that there is no infirmity in the impugned award dated 25th September, 2017 passed in ID No 290/2014, by the Presiding Officer, Labour Court-IX, KKD Courts, Delhi and the same is, hereby, upheld.
47. Hence, the present petition, being devoid of any merits is dismissed, along with pending application, if any.
48. The order be uploaded on the website forthwith

CHANDRA DHARI SINGH, J
JANUARY 31, 2024
SV/AV/RYP Click here to check corrigendum, if any

W.P.(C) 13598/2018 Page 27 of 27