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Delhi High Court
Central Warehousing Corportion vs Govt. Of India on 24 April, 2025
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~89
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 27.03.2025
Pronounced on: 24.04.2025
+ W.P.(C) 4114/2008
CENTRAL WAREHOUSING CORPORATION.....Petitioner
Through: Mr. Vikas Singh, Sr. Adv. With
Mr. K.K. Tyagi, Mr. Iftakhar Ahmed, Ms.
Vasudha Singh, Ms. Garima Tyagi, Advs.
versus
GOVT. OF INDIA .....Respondents
Through: Mr. T.P. Singh, Sr. Central
Govt. Counsel for R-1/UOI.
Ms. Asha Jain Madan, Adv. For R-2 to R-
225.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE AJAY DIGPAUL
JUDGMENT
% 24.04.2025
AJAY DIGPAUL, J.
1. The present writ petition challenges notification dated 17
November 2006 issued by the Ministry of Labour and Employment,
Government of India, whereby employment of contract labour in the
petitioner’s 1 establishment was prohibited.
2. The impugned notification issued under Section 10 (1) of the
Contract Labour (Regulation and Abolition) Act, 1970 2, prohibited the
employment of contract labour in the works of handling import and
1
Central Warehousing Corporation, “CWC” hereinafter
2
“the Act” hereinafter
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export container/ cargo, their loading and unloading from road
vehicles, along with their stuffing and de-stuffing in/from containers,
in the CWC’s Inland Clearance Depot 3 at Ghazipur, Patparganj, with
immediate effect.
3. CWC’s challenge alleges non-application of mind, as required
by, and in accordance with, Section 10 (2) of the Act, while issuing
the impugned notification under Section 10 (1) of the Act.
4. CWC is a statutory corporation, established under the
Warehousing Corporation Act, 1962. The relevant facility to the
present dispute is an ICD established in 1985 by CWC at Patparganj,
for which it had been granted a license by Customs Authorities under
the Customs Act, 1992.
5. The ICD at Patparganj forms a dry port. Here, all formalities
related to export/import 4 of containers are said to be completed before
transit to their respective destinations. It is CWC’s case that EXIM
related handling and transport activities are largely mechanised and
include activities such as stuffing/de-stuffing of containers, which
happen in factories of parties intending to export/import relevant
containers, and that these parties are free to have their own labour and
equipment.
3
“the ICD” hereinafter
4
EXIM
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6. Clauses 29 and 30 of the General Terms and Conditions of
Storage, CWC, are relevant in ascertaining CWC’s relationship with
their contractor(s) for activities involving handling and transport of
containers. It stands reproduced as under:
“Handling and Transport:
29. Normally the depositors are required to make their own
arrangements for handling of their stocks. The depositors will bear
all the charges on handling of stocks till the same are stacked in
Warehouse.
30. A depositor may entrust the work of Handling and
Transport of his goods to the Central Warehousing Corporation
with prior arrangement at the Warehouses where he has made the
reservation of space. The Central Warehousing Corporation will
provide such facilities to the depositors through H & T contractors
appointed of delivery.”
7. Therefore, the handling and transport 5 work at the ICD has
contracted out by the CWC. The contractor currently allotted H & T
work at the ICD since 6 January 2021 is one M/s Rahul Roadways,
Respondent 227 in the present petition. They were preceded by M/s
Suman Forwarding agency, Respondent 226 in the present petition,
who handled H & T operations at the ICD between 3 January 2013
and 5 January 2021.
8. In January 2000, one Inder Paswan along with 96 other
contractual labourers filed WP (C) 48/2000 before this Court praying
for the regularisation of their services by CWC and issuance of a
notification for abolition of contract labour at ICD Patparganj. Vide
5
H&T
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judgment dated 17 October 2000, the petition as disposed of with
directions to not substitute the workmen’s services with that of any
other contract labour. The dispute, on parties consenting ad idem, was
referred to the Central Advisory Contract Labour Board, constituted
under Section 3 of the Act by the Central Government, for making
appropriate recommendations, if any, on whether contract labour was
to be abolished at CWC’s ICD.
9. Around the same time, WP (C) 4407/2000 was filed by one
Subhash Chaurasia and 58 other contractual labourers seeking a
similar relief.
10. The CACLB constituted a committee under section 5 of the Act
to examine the matter vide Resolution dated 9 July 2001. The
Committee constituted submitted its report on 9 December 2002,
recommending the prohibition of contractual labour at the ICD. The
CWC made a representation to the Ministry of Labour against these
recommendations on 9 June 2003, praying for their reconsideration.
11. The CACLB in its 53rd meeting held on 11-12 March 2003
accepted the Committee’s report, and recommended to the
Government of India the prohibition of contract labour at CWC
Patparganj.
12. Numerous petitions were then filed by workmen seeking
prohibition of contract labour at the ICD by Government notification
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under Section 10 (1), as well as subsequent regularisation/absorption
of these labourers into the CWC’s workforce.
13. Vide order dated 18 April 2006, disposing of a large batch of
writ petitions being WP (C)s 4334-4421/2006, this Court noted that
the delay in the Government’s decision on the recommendation of the
CACLB to abolish contract labour deployment at the ICD was due to
the Central Government’s request for certain information and
documents not being complied with in a timely manner by the CWC.
This information was requested due to the presence of certain disputed
facts within the CACLB’s recommendations, regarding which the
Government sought clarity before taking a decision. The CWC only
submitted this information on 30 March 2006.
14. The aforementioned batch of petitions was disposed of with a
direction to the UOI to consider the matter expeditiously and to take a
final view on the matter within three months, in accordance with the
provisions of the Act.
15. Thereafter, the impugned notification prohibiting the
deployment of contractual labour at CWC’s ICD for the handling of
import/export container/cargo, their loading/unloading from road
vehicles and their stuffing/de-stuffing in/from containers, was issued
on 17 November 2006 by the Ministry of Labour and Employment.
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16. WP (C) 2849/2007 was filed on 26 May 2008 by the CWC in
challenge against the impugned notification. Vide order dated 24 April
2007, the petition was disposed of, in view of the Supreme Court’s
judgment in ONGC v Collector of Central Excise6, with directions to
approach the relevant high-powered committee, only upon whose
granting of clearance the CWC would be at liberty to approach the
Court.
17. The High-Powered Committee, while granting clearance to
approach this Court qua an appropriate writ petition, observed that the
CACLB is a quasi-judicial authority, and that there is no provision
under law for an administrative appeal against its decisions.
18. An order of stay was passed in WP (C) 2849/2007, relying upon
order dated 7 May 2007 in WP (C) 3041/2007 titled “Container
Corporation of India v GNCTD” due to the Court observing that
CWC was similarly placed as the petitioner in WP (C) 3041/2007.
19. The present writ petition dates back to the year 2008, its history
is rich and includes multiple disputes before the Industrial Tribunal,
intervention applications before this court, inter alia, the journey
through which is not germane to the dispute before us.
20. Heard learned Counsel appearing for the parties.
6
(2004) 6 SCC 437
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21. The contentions raised by Mr. Vikas Singh, learned Senior
Counsel appearing on behalf of the CWC, as well as those raised in
pleadings, are listed briefly below:
a. The impugned notification was passed without
application of mind and in disregard of the factors
contained within Section 10 (2) of the Act.
b. The notification is in the teeth of paras 52 and 53 of the
Supreme Court’s Judgment in SAIL v National Union
Waterfront Workers7.
c. The proposal of the economic officer in the ministry has
been signed without any examination or consideration,
more particularly para (f) of the CACLB’s report
regarding similar work being carried out in an
establishment run by the CCI through regular workmen.
d. The core activity of CWC is to provide storage and
preservation of food grains and that operating the ICD
would be an ancillary activity.
e. The VRS utilised to reduce staff strength at the ICD was
not considered by the CACLB.
f. The work carried out is not perennial in nature as volume
fluctuates with Government policy.
g. The license conferred upon CWC by Customs authorities
may be revoked at any time.
h. The contract entered into with H & T contractors is not
for the supply of labour/workman, but is on a job-work7
(2001) 7 SCC 1
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basis and involves the contractor keeping heavy
machinery at hand, and that even payments are based on
Rupees per Twenty-foot Equivalent Unit 8, Rupees per
km, Rupees per quintal etc.
i. Almost all other ICD’s/CFS operated by CWC or other
public sector undertakings outsource H & T work. The H
& T contracts of CCI and other PSUs are on record as
Annexure P-1 Colly.
j. That the High-powered committee observed that the
CWC operates in the same market as private persons and
all handlers are not covered by the same rule.
k. The CACLB did not sufficiently deal with the dissenting
note of the employer-member.
22. Reliance is placed by learned Senior Counsel for CWC on the
judgments of the Supreme Court in SAIL, State of Karnataka v.
Umadevi 9, International Airport Authority of India v International
Air Cargo Workers’ Union10, and State of Haryana v Piara Singh11.
23. The contentions raised by Mr. T.P. Singh, learned Counsel
appearing on behalf of the UOI, as well as those raised in pleadings,
are summarised below:
a. The work mentioned in the impugned notification has
been carried out by contract labour at the ICD since 1985,8
TEU
9
(2006) 4 SCC 1
10
(2009) 13 SCC 374
11
(1992) 4 SCC 118
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wherein contractors have changed but the workers
engaged by them remain the same.
b. The work carried out is of a perennial nature and has
been of a sufficient duration. Data received on payments
to labourers from April 2001- November 2004 shows that
an average of 250-300 workers has been employed for 20
or more days per month in a year.
c. The trend of gradual mechanisation of processes may
have reduced manpower deployed in the year 2002
against the year 2001, but the fact remains that
mechanical operation cannot run without the aid of
manual labour, however few they may be.
d. The work in question is being carried out through regular
workmen in a similar establishment of the CCI.
e. Reduction in business due to the upcoming inauguration
of the Dadri terminal and the revocability of the CWC’s
Customs license are assumptions and cannot be taken
into account.
f. The dissenting note of the employer-member was taken
into account by the CACLB.
g. The competent authority not only examined the report of
the committee constituted by the CACLB but also
observed that the Act covers both composite and labour
contracts.
h. The CACLB noted that workers were being paid
significantly lesser than the lowest paid regular workers
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and weren’t given leave encashment, yearly increments
on wages, medical facilities, bonus, etc.
i. There is no requirement by law for the report of the
committee constituted by the CACLB to be made public
or for the decision to be a speaking one.
24. Reliance is placed by learned Counsel for the UOI on the
judgments of the Supreme Court in Baleshwar Rajbanshi v Board of
Trustees for Port Trust of Calcutta 12, Indian Oil Corpn Ltd v UOI 13,
Barat Fritz Werner Ltd v State of Karnataka 14, Mahindra and
Mahindra v State of Maharashtra 15, Indian Oil Corporation Limited
v UOI 16, Sankar Mukherjee v UOI17, Ram Avtar Sharma v State of
Haryana18, SAIL v UOI 19, and State of madras v C.P. Sarathy20.
Analysis
25. Presently, we are limited to the evaluation of the impugned
notification, to the extent that it conforms with the parameters laid
down within Section 10 (2) of the Act, which warrant reproduction:
“10. Prohibition of employment of contract labour.–(1)
Notwithstanding anything contained in this Act, the appropriate
Government may, after consultation with the Central Board or, as
the case may be, a State Board, prohibit, by notification in the12
(2013) 4 SCC 258
13
2013 SCC OnLine Del 2334
14
(2001) 4 SCC 498
15
1996 SCC OnLine Bom 22
16
2023 SCC OnLine Del 4046
17
1990 (Supp) SCC 668
18
(1985) 3 SCC 189
19
(2006) 12 SCC 233
20
(1952) 2 SCC 606
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Official Gazette, employment of contract labour in any process,
operation or other work in any establishment.
(2) Before issuing any notification under sub-section (1) in relation
to an establishment, the appropriate Government shall have regard
to the conditions of work and benefits provided for the contract
labour in that establishment and other relevant factors, such as–
(a) whether the process, operation or other work is
incidental to, or necessary for the industry, trade, business,
manufacture or occupation that is carried on in the
establishment;
(b) whether it is of perennial nature, that is to say, it is of
sufficient duration having regard to the nature of industry,
trade, business, manufacture or occupation carried on in
that establishment;
(c) whether it is done ordinarily through, regular workmen
in that establishment or an establishment similar thereto;
(d) whether it is sufficient to employ considerable number
of wholetime workmen.
Explanation.–If a question arises whether any process or
operation or other work is of perennial nature, the decision of the
appropriate Government thereon shall be final.”
26. Right off the bat, given that the present petition only assails the
impugned notification, we find that the CWC’s reliance on Umadevi,
International Airport Authority of India, and Piara Singh to be
misplaced. These judgments discuss the regularisation of workmen,
inter alia, but do not lay down law that may aid us in determining
whether the impugned notification ought to be upheld or set aside.
27. The same can be said about the respondents’ reliance on Ram
Avtar Sharma and C.P. Sarathy, both of which deal with reference of
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disputes to the industrial tribunal, inter alia, and would not aid us with
determining the issue that lies before us in the present matter.
28. Now that we have trimmed the weight of the material before us
to only that which may aid us in determining whether the impugned
notification ought to be set aside, we shall proceed with our analysis
on the points in contention.
29. This exercise is not one of an appeal, and does not take us into
the merits of the matter as they lay before the Committee constituted
by the CACLB under Section 5 of the Act, and the minutes of the
CACLB in its 53rd meeting that deliberated upon the findings of the
said Committee. The Supreme Court’s observations with respect to the
ambit of a Court’s Certiorari jurisdiction under Article 226 of the
Constitution in Syed Yakoob v K.S. Radhakrishnan 21 merits
reproduction:
“7. The question about the limits of the jurisdiction of High
Courts in issuing a writ of certiorari under Article 226 has been
frequently considered by this Court and the true legal position in
that behalf is no longer in doubt. A writ of certiorari can be issued
for correcting errors of jurisdiction committed by inferior courts or
tribunals : these are cases where orders are passed by inferior
courts or tribunals without jurisdiction, or is in excess of it, or as a
result of failure to exercise jurisdiction. A writ can similarly be
issued where in exercise of jurisdiction conferred on it, the Court
or Tribunal acts illegally or properly, as for instance, it decides a
question without giving an opportunity, be heard to the party
affected by the order, or where the procedure adopted in dealing
with the dispute is opposed to principles of natural justice. There
is, however, no doubt that the jurisdiction to issue a writ of
certiorari is a supervisory jurisdiction and the Court exercising it is21
AIR 1964 SC 477
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not entitled to act as an appellate Court. This limitation necessarily
means that findings of fact reached by the inferior Court or
Tribunal as result of the appreciation of evidence cannot be
reopened or questioned in writ proceedings. An error of law which
is apparent on the face of the record can be corrected by a writ, but
not an error of fact, however grave it may appear to be. In regard to
a finding of fact recorded by the Tribunal, a writ of certiorari can
be issued if it is shown that in recording the said finding, the
Tribunal had erroneously refused to admit admissible and material
evidence, or had erroneously admitted inadmissible evidence
which has influenced the impugned finding. Similarly, if a finding
of fact is based on no evidence, that would be regarded as an error
of law which can be corrected by a writ of certiorari. In dealing
with this category of cases, however, we must always bear in mind
that a finding of fact recorded by the Tribunal cannot be challenged
in proceedings for a writ of certiorari on the ground that the
relevant and material evidence adduced before the Tribunal was
insufficient or inadequate to sustain the impugned finding. The
adequacy or sufficiency of evidence led on a point and the
inference of fact to be drawn from the said finding are within the
exclusive jurisdiction of the Tribunal, and the said points cannot be
agitated before a writ Court. It is within these limits that the
jurisdiction conferred on the High Courts under Article 226 to
issue a writ of certiorari can be legitimately exercised.
8. It is, of course, not easy to define or adequately describe what an
error of law apparent on the face of the record means. What can be
corrected by a writ has to be an error of law; hut it must be such an
error of law as can be regarded as one which is apparent on the
face of the record. Where it is manifest or clear that the conclusion
of law recorded by an inferior Court or Tribunal is based on an
obvious mis-interpretation of the relevant statutory provision, or
sometimes in ignorance of it, or may be, even in disregard of it, or
is expressly founded on reasons which are wrong in law, the said
conclusion can be corrected by a writ of certiorari. In all these
cases, the impugned conclusion should be so plainly inconsistent
with the relevant statutory provision that no difficulty is
experienced by the High Court in holding that the said error of law
is apparent on the face of the record. It may also be that in some
cases, the impugned error of law may not be obvious or patent on
the face of the record as such and the Court may need an argument
to discover the said error; but there can be no doubt that what can
be corrected by a writ of certiorari is an error of law and the said
error must, on the whole, be of such a character as would satisfy
the test that it is an error of law apparent on the face of the record.
If a statutory provision is reasonably capable of two constructions
and one construction has been adopted by the inferior Court or
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Tribunal, its conclusion may not necessarily or always be open to
correction by a writ of certiorari. In our opinion, it is neither
possible nor desirable to attempt either to define or to describe
adequately all cases of errors which can be appropriately described
as errors of law apparent on the face of the record. Whether or not
an impugned error is an error of law and an error of law which is
apparent on the face of the record, must always depend upon the
facts and circumstances of each case and upon the nature and scope
of the legal provision which is alleged to have been misconstrued
or contravened.”
30. Section 10 (2) mandates the consideration of conditions of work
and benefits provided to contract labourers in the establishment, along
with factors (a) through (d) (supra), on the basis of which a
notification may be passed under Section 10 (1).
31. Therefore, we shall proceed to weigh the submissions of parties
against the findings contained within the CACLB’s 53rd minutes of
meeting 22 in the backdrop of the parameters contained within Section
10 (2) of the Act.
32. At the outset, we dismiss the CWC’s argument of not being
provided an opportunity to be heard. The MoM of the 53rd meeting of
the CACLB specifically notes as under :
“While the representative of the Management was present and
heard, none appeared on behalf of the Union.”
33. We shall begin with whether the conditions of work and
benefits available to contract labours at the ICD were taken into
22
“MoM” hereinafter
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consideration by the Committee’s report and the CACLB’s
recommendations.
34. The CACLB, in its report, observed that workers are being paid
minimum wages as prescribed by the GNCTD, but that does not
compare to the remuneration drawn by the lowest category of regular
employees in the organisation that are at least twice as high.
Furthermore, it is noted that no leave, enhancement of wages on a
yearly basis, medical facilities, bonus etc. is available to workmen.
However, it is acknowledged that welfare amenities to be provided
under the Act have been adhered to and are available to the workmen.
Para (b) of the MoM findings concerning the ICD merit reproduction:
“(b) The workers are paid minimum wages as prescribed by the
Government of NCT of Delhi which is approximately Rs.2700/- to
Rs.3000/- per month and quite low in comparison to the wages
paid to the lowest category of regular employees which comes to
about Rs.5500/- to Rs.7500/-. No leave, enhancement of wages on
an yearly basis, medical facilities, bonus etc. are available to the
workmen engaged through contractors though welfare amenities to
be provided under the Act have been adhered to.”
35. We may now proceed to the factors contained within Sections
10 (2) (a) to (d) and determine whether they have been considered
prior to the passing of the impugned notification.
(a) Whether Incidental or Necessary, the Nature of Work Carried Out
by Contractual Labourers at CWC’s ICD, Patparganj
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36. Learned Senior Counsel for the CWC submits that the work
performed by contractual labourers employed at the ICD does not
constitute an integral part of the work carried out at the facility.
Further, it is pleaded in the reply to the respondents’ Section 151
application that the work performed by the contract labour at the
establishment is not that of the objectives and functions of the CWC.
37. Furthermore, it is argued that according to the General Terms
and Conditions of Storage, depositors are required to make their own
arrangements for handling their stock, and may entrust its handling to
the CWC.
38. Per contra, learned Counsel for the UOI submits that the
loading and unloading of containers, stuffing and de-stuffing, and
other tasks concerned with storage and handling of containers is an
integral part of the work carried out at the Patparganj ICD. Relying
upon the CACLB’s findings, he states that though a trend of
mechanisation is predominant, most machinery requires
corresponding manpower to be operated.
39. Addressing the findings on this point of the CACLB’s
Committee, reported in its 53rd MoM, they observe at sub para (a) that
the Committee found that the work of storage and handling of import
and export containers/cargo, their stuffing and de-stuffing, has been
carried out on the establishment since 1985 through contract labour,
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and that though contractors have changed since, the labourers remain
the same.
40. It is relevant to note that an exception has been carved out with
respect to Section 10 (2) (a), where the Supreme Court, in Barat Fritz
Werner, observed that the work carried out need not necessarily be a
core function for a valid notice prohibiting contract labour in the
establishment to be issued. Paras 20 and 21 of the judgment merit
reproduction:
“20. The learned counsel for the petitioners sought to make a
distinction arising under Section 10 of the Act in relation to
“prohibition of contract labour” and “regulation of contract
labour”. They contended that the basis on which contract labour
can be abolished under this section is that it should relate to the
manufacturing industry, trade, business or occupation that is
carried on in the establishment. In other words, in matters integral
to the work in the establishment and not to a mere facility in
respect of its workmen as defined in Section 2(l) of the Factories
Act. Once again, the argument cannot be appreciated at all because
it would be a matter of policy for the Government to prohibit or to
regulate the contract labour in an establishment and does not
necessarily depend upon whether they are engaged in the core
activity or a peripheral activity like the facility of a canteen.
Learned counsel for the petitioners adverted to certain decisions
in Standard Vacuum Refining Co. 23 wherein the abolition was in
relation to the workmen engaged in the cleaning of the
machinery; Shibu Metal Works 24 wherein workers were being
engaged for work which was of a permanent nature and it was a
part of the manufacturing process of the goods manufactured in the
Factory; Vegoils (P) Ltd. v. Workmen 25, wherein it was in relation
to the feeding of hoppers in the solvent extraction plant which is an
activity closely and intimately connected with the main activity of
the appellant such as crushing oilcakes and oilseeds for extraction
of oil and other chemical production; Catering Cleaners of S.24
(1966) 12 FLR 226
25
(1966) 1 LLJ 717
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Rly. 26 wherein it was observed that the work of cleaning, catering
establishments and pantry cars is necessary and incidental to the
industry or business of the Southern Railway and, therefore, the
requirement of Section 10(2) was satisfied. The words “other work
in any establishment” in Section 10 are to be construed as ejusdem
generis and the expression “other work” in the collocation of words
“process, operation or other work in any establishment” occurring
in Section 10 has not the same meaning as the expression “in
connection with the work of an establishment” with reference to a
workman or a contractor.
21. Section 10 of the Act provides for prohibition of
employment of contract labour in any process, operation or other
work in an establishment. The words “process, operation or other
work” need not be interpreted to mean only the core activity and
not peripheral activity as is sought to be suggested by learned
counsel for the petitioners. In sub-section (2) of Section 10 of the
Act certain guidelines have been provided for the Government
before the issue of any notification to find out whether the
“process, operation or other work” is incidental or necessary for
the industry, trade, business, manufacture or occupation that is
carried on in the establishment. The expression used therein is
wide in ambit to cover other activity arising in industry and not
merely the actual manufacture. Otherwise to understand the
expression “process, operation or other work” other than the
meaning given in clause (a) of sub-section (2) of Section 10 would
be to narrow down the meaning thereto. That does not seem to be
the intention of the enactment at all. Therefore, we cannot agree
with the submission made by the learned counsel for the petitioners
in this regard either.”
41. Given the above interpretation of Section 10 (2) (a), it appears
that the argument of work carried out being incidental to, rather than a
core function of the enterprise, holds no water. Furthermore, keeping
in mind the language of the section – “incidental to, or necessary for
the industry,…”, the finding of the committee that contract labour has
been carried on by the same workers despite changes in contractors
since 1985 speaks to a certain necessary nature of the work being
carried out.
26
(1987) 1 SCC 700
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(b) Whether the Work is of a Perennial nature
42. Learned Senior Counsel appearing for the CWC asserts that the
work performed by contractual labour at the ICD is not perennial in
nature. He buttresses his submission by adding that the license to
operate the ICD may be revoked at any time by Customs authorities,
like it has been done to ICDs and CFSs at Kalamboli, Navi Mumbai,
along with those at Surat, Udaipur, Rajkot, and Raipur.
43. It is also pleaded that there also exists the likelihood of
reduction in business once the Dadri Terminal operated by the CCI
becomes operational, stating that the future is uncertain. Given the
ICD at Dadri has become operational and over a decade have passed
since; this is no longer of relevance to us.
44. The CWC’s case is that the volume of work at ICD Patparganj
fluctuates with Government policy governing exports and imports,
and that the deployment of contractual labour permits the CWC to
match demand by hiring corresponding volume of labour and
maximise profitability, especially in seasons of low demand in case
workmen stand regularised.
45. The CACLB’s findings on this point are contested, stating that
the emerging international trend in EXIM ventures is that of
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palletized/heavy cargo, wherein the entire process of storage and
handling is mechanised with no requirement for manual labourers.
46. The UOI refutes these submissions, asserting that the
contractual labourers have remained unchanged since 1985, and data
for the period from April 2001 to November 2004 show that an
average of 250-300 workers have been engaged for 20 or more days in
a month (240 days in financial years 2001-02, 2002-03, and 2003-04).
Therefore, the work is argued to be undoubtedly perennial in nature.
47. Contesting the claim of a shift in trends and a reduction in the
need for manual labour, reference is made by learned Counsel for the
UOI to statistics for manpower deployed in the year 2001 and 2002,
showing that though there was a decline in manpower, mechanical
operation can’t be run in the absence of manual labour, however few
their required number may be.
48. In fact, data showing the details of contract labourers employed
along with the volume of work on an annual basis from the year 2000
to the year 2021, annexed along with the CWC’s reply dated 18
January 2021 to Respondent 2 to 225’s Section 151 application, as
well as the CWC’s written submissions, warrant reproduction:
Sl. Year No. of Volume of Name of
No. workers/ business (No. of H&T
contract TEUs handled) contractor
labour
1 2001 156 47496 M/s CTA
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Movers Pvt.
Ltd
(01.01.2001 to
01.03.2001)
2 2002 293 52565 M/s. OMMC
3 2003 322 48678 Pvt. Ltd.
4 2004 320 53582 (01.03.2001 to
5 2005 311 59395 20.12.2006)
6 2006 327 51194 M/s Aqdas
7 2007 327 46318 Maritime Pvt.
8 2008 326 43184 Ltd.
9 2009 321 41278 (21.12.2006 to
10 2010 319 43422 02.01.2013)
11 2011 319 41600
12 2012 313 37949
13 2013 313 41064 M/s. Suman
14 2014 310 48611 Forwarding
15 2015 307 41387 Agency Pvt.
16 2016 303 37101 Ltd.
17 2017 301 37797 (03.01.2013 to
18 2018 294 26072 05.01.2021)
19 2019 295 24548
20 2020 289 17183
21 2021 107 -- M/s Rahul
Roadways
(06.01.2021
onwards for
five years
49. It is apparent from the data contained in the table above, which
is the latest information available for our perusal that has been
provided by the CWC, that prima facie, that the work is perennial in
nature. Contract labourers have been deployed every year for a period
of 20 years since 2001.
50. One may observe that, except for the years 2001 and 2021,
which appear to be outliers in the 20-year timeframe recorded, the
volume of work performed by contractual labourers was perennial and
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deviations in labourers deployed from one year to the next were not
significant.
51. The CACLB’s findings on the subject are that the work is of
perennial nature, and that the same is evidenced by the continued
hiring of the same workmen since 1985. Their analysis confirms the
argument of the UOI that regardless of trends of mechanisation, a
manpower element will always be required given the nature of work.
52. Furthermore, the CACLB’s observation in para (a) that the
labourers have remained the same since 1985, though contractors have
changed since, appears substantiated by the averment in Respondent
226/ M/s Suman Forwarding, where it is averred that the contractual
deployed by it for H & T work at the ICD have been working there
prior to the commencement of its tenure as contractor.
53. Another observation from the data provided by the CWC in its
written submissions worthy of mentioning is that, though the total
number of staff employed by them has been steadily decreasing from
around 8500 in the years 2000-2001 to 2880 in the years 2019-2020,
the fluctuation in the number of contract labourers deployed seem
much less significant. The data regarding total staff employed stands
reproduced hereunder:
(b) Staff strength of Petitioner CWC from 2000 to 2020
Sl. Year No. of CWC Staff
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No.1 2000-01 8579
2 2001-02 8455
3 2002-03 6984
4 2003-04 6813
5 2004-05 6690
6 2005-06 6413
7 2006-07 6192
8 2007-08 6059
9 2008-09 5935
10 2009-10 5765
11 2010-11 5667
12 2011-12 5492
13 2012-13 5222
14 2013-14 4777
15 2014-15 4557
16 2015-16 4078
17 2016-17 3639
18 2017-18 3570
19 2018-19 3042
20 2019-20 2880
54. This drastic decline in total staff employed by the CWC from
the year 2000 until 2020 does not reflect in the fluctuations of contract
labourers deployed, which were largely similar over 18 years out of
the 20-year period for which data was produced.
(c) Whether work is done ordinarily through regular workmen in that
establishment or an establishment similar thereto
55. The CWC, in its pleadings, have vehemently opposed the
finding contained at para (f) in the CACLB’s MoM. In support of this,
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they have annexed tender documents concerning contracting out of H
& T activities in establishments run by the CCI, Balmer Lowrie, and
other entities.
56. The UOI echoes the unequivocal finding of the CACLB in its
53rd MoM that similar work is being carried out by regular employees
at a similar establishment of the CCI.
(d) Whether the work is sufficient to employ a considerable number of
whole time workmen
57. While the phrase ‘perennial nature of work’ may appear
interchangeable with evaluation of the sufficiency of work or its
volume, we have regarded the term “perennial” to refer to the
availability of work throughout an extended time frame.
58. On the point of sufficiency of work, we shall now refer to the
data present in the tables reproduced in paras 45 and 50 (supra), to
determine whether workmen have been consistently employed in
significant numbers.
59. Once more, excluding the years 2001 and 2021 from the 20-
year time frame during which data has been recorded, the lowest
number of contract labourers deployed in a single year did not drop
below 289, while reaching their highest at 327 workmen employed for
a year.
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60. We believe that the deployment of around 300 contractual
labourers each year over 18 years out of a 20-year timeframe speaks to
a sufficiency of work. This number is no small one, and cannot be
brushed aside as being insignificant.
Factors besides those enshrined in Section 10 (2)
61. The factors contained within Section 10 (2) are not exhaustive,
as held by the Supreme Court in SAIL, para 49 of which merits
reproduction:
“49. A careful reading of Section 10 makes it evident that sub-
section (1) commences with a non obstante clause and overrides
the other provisions of the CLRA Act in empowering the
appropriate Government to prohibit by notification in the Official
Gazette, after consultation with the Central Advisory Board/State
Advisory Board, as the case may be, employment of contract
labour in any process, operation or other work in any
establishment. Before issuing notification under sub-section (1) in
respect of an establishment the appropriate Government is enjoined
to have regard to: (i) the conditions of work; (ii) the benefits
provided for the contract labour; and (iii) other relevant factors like
those specified in clauses (a) to (d) of sub-section (2). Under clause
(a) the appropriate Government has to ascertain whether the
process, operation or other work proposed to be prohibited is
incidental to, or necessary for the industry, trade, business,
manufacture or occupation that is carried on in the establishment;
clause (b) requires the appropriate Government to determine
whether it is of a perennial nature, that is to say, it is of sufficient
duration having regard to the nature of industry, trade, business,
manufacture or occupation carried on in that establishment; clause
(c) contemplates a verification by the appropriate Government as
to whether that type of work is done ordinarily through regular
workmen in that establishment or an establishment similar thereto;
and clause (d) requires verification as to whether the work in that
establishment is sufficient to employ considerable number of
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wholetime workmen. The list is not exhaustive. The appropriate
Government may also take into consideration other relevant factors
of the nature enumerated in sub-section (2) of Section 10 before
issuing notification under Section 10(1) of the CLRA Act.
62. Therefore, it would be appropriate to record other factors
advanced by parties.
63. However, before we delve into these factors, it would be
imperative for us to analyse the CWC’s relentless reliance upon the
judgment of the Supreme Court in SAIL.
64. We shall now analyse whether the relevant portion of the
judgment in SAIL which discusses the impugned notification is
applicable to the facts before us – i.e., whether there has been an
instance if passing of an “omnibus notification” under Section 10 (1)
of the Act thereby rendering such prohibition to have been done
without sufficient application of mind
65. The CWC, in its written submissions, refer to paras 52 and 53
of the judgment in SAIL, which merit reproduction:
“52. Now, reading the definition of “establishment” in Section
10, the position that emerges is that before issuing notification
under sub-section (1) an appropriate Government is required to: (i)
consult the Central Board/State Board; (ii) consider the conditions
of work and benefits provided for the contract labour; and (iii) take
note of the factors such as mentioned in clauses (a) to (d) of sub-
section (2) of Section 10, referred to above, with reference to any
office or department of the Government or local authority or any
place where any industry, trade, business, manufacture or
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occupation is carried on. These being the requirement of Section
10 of the Act, we shall examine whether the impugned notification
fulfils these essentials.
53. The impugned notification issued by the Central
Government on 9-12-1976, reads as under:
“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:
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 specialised experience.”
A glance through the said notification makes it manifest that with
effect from 1-3-1977, it prohibits employment of contract labour
for sweeping, cleaning, dusting and watching of buildings owned
or occupied by establishment in respect of which the appropriate
Government under the said Act is the Central Government. This
clearly indicates that the Central Government had not adverted to
any of the essentials, referred to above, except the requirement of
consultation with the Central Advisory Board. Consideration of the
factors mentioned above has to be in respect of each establishment,
whether individually or collectively, in respect of which
notification under sub-section (1) of Section 10 is proposed to be
issued. The impugned notification apart from being an omnibus
notification does not reveal compliance with sub-section (2) of
Section 10. This is ex facie contrary to the postulates of Section 10
of the Act. Besides, it also exhibits non-application of mind by the
Central Government. We are, therefore, unable to sustain the said
impugned notification dated 9-12-1976 issued by the Central
Government.”
66. This is, in fact, the only portion of the judgment to delve into
the question of the validity of the impugned notification prohibiting
the deployment of contract labour, passed under Section 10 (1) of the
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Act. It is noted that in SAIL, there lay no material on record before the
court to convey the reasoning behind the issuance of such notification,
other than the text of the notification itself.
67. Therefore, it was observed that the notification was an
“omnibus” one, in the sense that it prohibited the employment of
contractual labour for the works mentioned at all establishments under
which the appropriate Government is the Central Government. It was
also noted by the Court that the only formality that notification stated
to have complied with is the consultation with the central board, and
that consideration of factors under Section 10 (2) of the Act were not
stated to have been made.
68. Therefore, prima facie, the notification appeared to prohibit the
employment of contract labour at numerous establishments without
supplying cogent reasoning and specific consideration of the factors
enshrined within Section 10 (2) through data sourced from each of
these establishments. It was on this note that the notification was held
to be an omnibus one, and quashed for want of application of mind.
69. Returning to the other factors advanced by parties to advance
their cases against/ in favour of the impugned notification.
70. The CWC argued that it utilised the Voluntary Retirement
Scheme 27 to improve the efficiency and profitability of its
27
VRS
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organisation, gradually reducing its total number of employees at the
ICD, and that regularisation would undo the economic effects of the
VRS.
71. Unfortunately, this argument does not impress us. It would be
relevant to comment upon the object and purpose of the Act to
understand what factors would be decisive in considering an
establishment for the abolishment of contract labour employment.
72. The Supreme Court in Sail observed the legislative intent
behind the Act. On this note, para 79 merits reproduction:
“79. It would be useful to notice the historical perspective of the
contract labour system leading to the enactment of the CLRA Act
for a proper appreciation of the issue under examination. The
problems and the abuses resulting from engagement of contract
labour had attracted the attention of the Government from time to
time. In the pre-independence era, in 1929 a Royal Commission
was appointed by the then British Government to study and report
all the aspects of labour. Suffice it to mention that in 1931 the
Royal Commission (also known as “the Whitley Commission”)
submitted its report mentioning about the existence of an
intermediary named “jobber” and recommended certain measures
to reduce the influence of the “jobber”. Nothing substantial turned
on that. In 1946, the Rege Committee noted that in India
contractors would either supply labour or take on such portions of
work as they could handle. The Committee pointed out,“whatever may be the grounds advanced by employers, it is to be
feared that the disadvantages of the system are far more numerous
and weightier than the advantages”;
though the Rege Committee recognized the need for contract
labour yet urged for its abolition where it was possible and
recommended regulating conditions of service where its
continuance was unavoidable. In 1956, the Second Planning
Commission (of which the then Prime Minister Pandit Jawahar Lal
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Nehru was the Chairman) observed that in the case of contract
labour the major problems relate to the regulations of working
conditions and ensuring them continuous employment and for
these purposes suggested that it was necessary to:
“(a) undertake studies to ascertain the extent and the nature of the
problems involved in different industries;
(b) examine where contract labour could be progressively
eliminated, this should be undertaken straight away;
(c) determine cases where responsibility for payment of wages,
ensuring proper conditions of work etc. could be placed on the
principal employer in addition to the contractor;
(d) secure gradual abolition of the contract system where the
studies show this to be feasible, care being taken to ensure that the
displaced labour is provided with alternative employment;
(e) secure for contract labour the conditions and protection enjoyed
by other workers engaged by the principal employer; and
(f) set up a scheme of decasualisation, wherever feasible.””
73. Contract labour has been equated with bonded labour by the
Supreme Court in Sankar Mukherjee v UOI, reproduced below:
“6. It is surprising that more than forty years after the
independence the practice of employing labour through contractors
by big companies including public sector companies is still being
accepted as a normal feature of labour employment. There is no
security of service to the workmen and their wages are far below
than that of the regular workmen of the company. This Court in
Standard-Vacuum Refining Co. of India Ltd. v. Its workmen and
Catering Cleaners of Southern Railway has disapproved the
system of contract labour holding it to be ‘archaic’, ‘primitive’ and
of ‘baneful nature’. The system, which is nothing but an improved
version of bonded labour, is sought to be abolished by the Act. The
Act is an important piece of social legislation for the welfare of
labourers and has to be liberally construed.”
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74. In line with the aforementioned observations, economic
advantages to an enterprise are of significantly lower priority when
compared to the conditions of work endured by the contract labourers
there, along with the preservation of their rights.
75. Now we shall deal with the final contention of the CWC, that
the report of the Committee constituted by the CACLB to assess the
viability of the ICD for prohibition of contract labour was not a
unanimous one, and that the dissenting note was not adequately dealt
with.
76. The employer-member was noted to be of the opinion that the
ICD is dependent on the revocable license issued by the Customs
authorities, signifying uncertainty of the work carried out. The
employer-member stated, in passing, that other similar depots run by
both state as well as private operators outsource their labour
component, and that this is the prevailing practice. Furthermore, he
states that the contract is a works contract and not a labour contract.
77. Therefore, the employer-member was of the opinion that the
ICD at Patparganj does not fulfil the requirements of Section 10 (2)
(b) and 10 (2) (c) for the passing of a notification under Section 10
(1).
78. Following the noting of the dissent by the employer-member,
the CACLB’s MoM observes that the dissenting note was taken into
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account, but could not be agreed with due to the issue of revocation of
license being a hypothetical one and that the CCI carries out similar
work by the deployment of regularised workmen.
79. We agree with the findings of the CACLB on the issue of
revocability of the CWC’s license as being a mere assumption and not
being one of significant gravity to sway the findings of the board on
whether work carried out could be considered perennial.
Retrospectively, about two decades hence, we see that neither the
terminal at Dadri, nor the claimed instability attributed to the
revocable nature of their Custom’s license, were threats to the
perennial nature of work handled by contract labourers at the ICD.
Conclusion
80. We have weighed the findings of the CACLB’s report against
the factors contained within Section 10 (2).
81. It appears to us that there has been no error committed by the
Government in the passing of the impugned notification and that the
CACLB’s 53rd MoM shows application of mind to the factors
enshrined within Section 10 (2) (a) with specific consideration of data
pertaining to the ICD at Patparganj.
82. Moreover, we notice that, after receipt of the CACLB’s
recommendations, the Government asked the CWC for further data
and information to evaluate the findings of the CACLB and clarify
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disputed facts at hand. It was only after the receipt and consideration
of this information, that the Government issued the impugned
notification – as acknowledged in order dated 18 April 2006 disposing
of the large barge of writ petitions, noted by as at para 13 (supra).
83. The impugned notification 17 November 2006 issued by the
Ministry of Labour and Employment, Government of India, under
Section 10 (1) of the Act in respect to the prohibition of employment
of contract labour at the CWC’s ICD at Patparganj is upheld for the
aforesaid reasons.
84. We clarify that all our observations pertain to the merits of the
impugned notification only.
85. The writ petition is accordingly disposed of.
86. Pending applications, if any, do not survive for consideration.
87. No orders as to costs.
AJAY DIGPAUL, J.
C. HARI SHANKAR, J.
APRIL 24, 2025/sk
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