Holding

Only the appropriate Government can abolish a contract‑labour system; labour courts and industrial tribunals under the MRTU & PULP Act lack jurisdiction to entertain unfair‑labour‑practice complaints where the employer‑employee relationship is not established, and Section 32 of the Industrial Disputes Act does not expand that jurisdiction.

Summary

Cipla Ltd employed cleaning staff through a contractor and routinely terminated them after eleven months to avoid granting permanent status. The Maharashtra General Kamgar Union filed a complaint under Section 28 of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, alleging unfair labour practices. The Labour Court dismissed the complaint, holding that the issue of contract labour could be raised only under the Contract Labour (Regulation and Abolition) Act, 1970, a view affirmed by the Industrial Court. The High Court reversed that decision, finding the complaint maintainable. The Supreme Court allowed the appeal, holding that only the appropriate Government may abolish a contract‑labour system and that labour courts or industrial tribunals under the MRTU & PULP Act lack jurisdiction to entertain unfair‑labour‑practice claims where the employer‑employee relationship is not established; Section 32 of the Industrial Disputes Act does not enlarge such jurisdiction. Consequently, the High Court order was set aside and the Labour Court’s dismissal was restored.

Issues considered

Whether a complaint under the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act is maintainable when the workmen are engaged on a contract‑labour basis.
Whether the Labour Court or Industrial Tribunal has jurisdiction to decide claims of unfair labour practices in the absence of a proven employer‑employee relationship.
Whether Section 32 of the Industrial Disputes Act enlarges the jurisdiction of the Labour Court beyond that conferred by the MRTU & PULP Act.
Whether the appropriate Government alone has the power to abolish the contract‑labour system under the Contract Labour (Regulation and Abolition) Act, 1970.

Legislation cited

Bombay Industrial Relations Act, 1946
Bombay Shops and Establishment Act, 1948
Contract Labour (Regulation and Abolition) Act, 1970
Drugs and Cosmetics Act, 1940s. Schedule M
Industrial Disputes Act, 1947s. 10, s. 32, s. 33-C(2)
Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971s. 28, s. 7
Payment of Wages Act, 1936

Subjects

contract labourunfair labour practicesjurisdictionIndustrial Disputes Actlabour courtemployer-employee relationshipappropriate governmentabolition of contract labour

Judgment

y

CIPLALTD. A
v.
MAHARASHTRA GENERAL KAMGAR UNION
AND ORS.

FEBRUARY21, 2001
B
[S. RAJENDRA BABU AND S.N. PHUKAN, JJ.]

Labour Laws :

Mahara,htra Recognition of Trade Unions & Prevention of Unfair La-
bour Practices Act, 1971: Section 28-Unfair labour practices-Labourcourt- c
]urisdiction of-Complaint-Maintainability of-Employer-employee reiation-
ship-Necessily of-Company employed workmen ihrough conlraclorfor clean-
ing factory premises-Services ofsuch workmen used to be lerminaied after 11
months !hereby depriving 1hem of permanent slatus-Company never /reated
such workmen as its employees-Complaint filed by such workmen alleging D
unfair labour practices-Labour court dismissed the complaint by holding that
arrangement between company and contractor was legal and bona fide and
that abolition ofcontract labour could be agitated only under Contract Labour
Act and not under MRTU & PULP Act-Industrial court affirmed this deci-
sion-But High Court held complaint to be maintainable-Correctness of-
E
Held : Only the appropriate Government has the power to abolish contract
iabour system-Labour cou11 or Industrial court conslituted under MR11J &
PULP Ac! has no jurisdiction to ente11ain such disputes-In the absence ~f
employer-employee relationship labour court or industrial court cannot go into
the question of Ufl:fair labour practices-Hence, complaint not maintainahle-
Contract Labour (Regulation and Abolition) Act, 1970--Bombay Industrial F
Relations Act, 1946-Drugs and Cosmetics Act, 1940, Sch. M.

Industrial Disputes Act, I947:

Section 32-Labour Court-Jurisdiction under--Scupe and ambit uf-
Held : S. 32 does not enlarge jurisdiction beyond what is conferred upon G
labour court by other provisions of the MRTU & PULP Act.

The appellant was engaged in the manufacture of pharmaceutical
products and it was its statutory duty to keep the factory premises clean,
·'•-·.: hygienic and dust free in terms of Schedule 'M' of the Drugs and Cosme!-
H
I
2 SUPREME COURT REPORTS [2001] 2 S.C.R.

A ics Act, 1940. The appellant, therefore employed workmen through a
contractor for carrying out such cleaning operations. However, the appel-
lant through the contractor used to terminate the services of these work-
men after 11 months of service thereby depriving them of the status of
I •
permanent workmen. The appellant never treated these workmen as its
employees.
B
The first respondent-union of the appellant filed a complaint under
Section 28 of the Maharashtra Recognition of Trade Unions & Prevention
of Unfair Labour Practices Act, 1971 (MRTU & PULP Act) alleging unfair ~·
labour practices in termination of the services of the workmen engaged in
c cleaning operations. The labour court dismissed the complaint by holding
that the arrangement between the appellant and the contractor was legal
and bona fide and that the abolition of contract labour could only be
agitated under the provisions of Contract Labour (Regulation and Aboli-
tion) Act, 1970 and not under the MRTU & PULP Act. The Industrial
Court agreed with the Labour Court but the High Court held that the
D
complaint was maintainable. Hence this appeal.

On behalf of the appellant it was contended that only the appropri-
ate Government had the power to abolish the contract labour system and
that the industrial tribunal or any other authority had no jurisdiction to
E entertain such disputes.

On behalf of the respondent it was contended that under Section 32
of the Industrial Disputes Act, 1947 the Labour Court had the power to
decide all matters arising out of a complaint and, therefore, it could direct
abolition of labour system; and that under Section 33-C(2) of the ID Act
F the Labour Court had the power to decide incidental questions arising
out of a complaint.

Allowing the appeal, the Court

HELD : 1. If the employees are working under a contract covered
G by the Contract Labour (Regulation and Abolition) Act, 1970 then it is
clear that the labour court or the industrial adjudicating authorities
cannot have any jurisdiction to deal with the matter as it falls within the
province of an appropriate Government to abolish the same. If the case
put forth by the workmen is that they have been directly employed by the ~
••
H appellant-company but the contract itself is a camouflage and, therefore,
CIPLA LTD. v. MAHARASHTRA GENERAL KAMGAR UNION 3
needs to be adjudicated is a matter which can be gone into by appropriate A
+ industrial tribunal or labour court. Such question cannot be examined by

. the labour court or the industrial court constituted under the Maharashtra
Recognition of Trade Unions & prevention of Unfair Labour Practices,
Act, 1971 (MRTU & PULP Act). The object of the enactment is, amongst
other aspects, enforcing provisions relating to unfair labour practices. If
B
that is so, unless it is undisputed Qr indisputable that there is employer-
employee relationship between the parties, the question of unfair labour
practice cannot be inquired into at all. The respondent-union came to the
Labour Court with a complaint that the workmen are engaged by the
appellant through the contractor and though that is an ostensible relation-
ship, the true relationship is one of master and servant between the c
appellant and the workmen in question. By this process, workmen repudi-
ate their relationship with the contractor under whom they are employed
but claim relationship of an employee under the appellant. That e>'.ercise
of repudiation of the contract with one and establishment of a legal
relationship with another can be done only in a regular industrial tribu- D
nal/court under the Industrial Disputes Act, 1947. [10-C-F]

2. Section 32 of the ID Act would not enlarge the jurisdiction of the
court beyond what is conferred upon it by other provisions of the MRTU &
.......
PULP Act. If under the other provisions of the MRTU & PULP Act the
..... industrial tribunal or the labour court has no jurisdiction to deal with a E
particular aspect of the matter, Section 32 does not give such power to it. In
.
f the present case, whether a workman can be stated to be the workman of
the appellant establishment or not, it must be held that the contract be-
tween the appellant and the contractor is camouflage or bogus and upon
such a decision it can be held that the workman in question is an employee F
of the appellant establishment. That exercise would not fall within the
scope of either Section 28 or Section 7 of the MRTU & PULP Act. In cases
of this nature where the provisions of the MRTU & PULP Act are sum-
mary in nature and give drastic remedies to the parties concerned, elaho-
rate consideration of the question as to the relationship of employer-em-
G
ployee cannot be gone into. [10-G; 11-A-B]

-.... 3. Even in respect of claims arising under Section 33-C(2) of the ID
Act appropriate dispute can be raised in terms of Section 10 of the ID Act
and that has not been the position in the present case. Nor can it be said
that even in cases where employer-employee relationship is undisputed or H
4 SUPREME COURT REPORTS [2001] 2 S.C.R.

A indisputably referring to the history of relationship between the parties,
dispute can be settled and not in a case of the present nature where it is
clear that the workmen are working under a contract. But it is only a veil
and that will have to be lifted to establish the relationship between the
parties. That exercise can also be done by the industrial tribunal under the
.
Bombay Industrial Relations Act, 1946 or under the ID Act. Therefore, the
B
Higli Court went far l:eyond the scope of the proVisions of the MRTU &
PULP Act. [12-C-D]

General Labour Union (Red Flag), Bombay v. Ahmedabad Mfg. &
Calico Printing Co. l.id., [1995] Supp. 1 SCC 175; Gujarat Electricity Board,
C Thenna/ Power Station, Ukai, Gujarat v. lfindMazdoor Sabha, [1995] 5 SCC
27; Vividh Kamgar Sabha v. Kalyani Steels l.id., [2000] I SCALE 82;
Vislzwanatf! Tukaram v. The General Manager, Central Railway, V.T., Bombay
59 BLR 892 and 1he Central Bank of India l.id. v. P.S. Rajagopalan, [1964]
3 SCR 140, referred to.
D
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 12845 of
1996.

From the Judgment and Order dated 8/9.9.96 of the Mumbai High
Court in WP No. 1771of1995.
E
K.K. Singhvi, N.B. Shetye, J.P. Cama, Soli Cooper, Rajendra Singhvi,
R. Patel, Sakesh Kumar, Ashok K. Singh, Gopal Jain, Sanjay Singhvi, Sanjay
R. Hegde, Satya Mitra, Rohit Singh, S.K. Agnihotri, Mrs. Smriti Mishra and
Ms. Nandini Gore, for the appearing parties.

F The Judgment of the Court was delivered by

RAJENDRA BABU, J. : 1be first respondent, which is a Union of the
workmen, filed a complaint against the appellant for unfair labour practices
under Section 28 of the Maharashtra Recognition of Trade Unions & Preven-
tion of Unfair Labour Practices Act. 1971 (for short 'the Act') under Item 1(a)
G
by way of victimisation; (b) not in good faith, but in the colourable exercise
of the employer's right; (d) for patently false reasons; and (t) in utter disre-
gard of the p1inciples of natural justice in the conduct of domestic enquiry
or witl1 undue haste of Schedule IV of the Act. Before the Seventh Labour
Court al Bombay it was claimed by tl1e respondent herein that the statutory
H duty of the appellant is not only to keep the factory premises clean, hygienic
CJPLA LTD. v. MAHARASHTRA GENERAL KAMGAR UNION [R. BABU, J.] 5
J and dust free but also the swrnWldings thereof in tenns of Schedule "M" of A
t Drugs & Cosmetics Act, 1940 and the employees engaged for such process
are, therefore, employees of the company itself; that, in fact, the appellant had
been directly employing the workmen to attend such work and the appellant
used to appoint such persons on casual or temporary basis and tenninate their
services from time to time with a view to depriving them of the pe1manent
status and wages and other benefits as applicable to pennanent workmen of
B
the appellant; that this situation continued till the year 1990-91 when such
--ii casual or temporary workmen engaged in cleaning process joined the respond-
ent-Union in order to protect their rights for permanency in the appellant-
company; that since about 199 l the appellant has been engaging persons but
on paper they are shown as ·contract workmen' working for contractor, c
respondent No. 2 herein; that the second res~ondent is only a name lender
whereas the appellant is the real employer of the workmen; that tl1e appellant
through the second respondent tenninated the services of such workmen
employed through second respondent the moment the persons completed ll
months of services thereby depriving them of the status of pe1mancnt work-
D
men; that the entire effort being made to avoid giving permm1ency to the
workmen concerned with sanitation, siw·eeping and in kecpiug the factory
premises and su1rounding thereof in a hygienic condition. It is further a1lcged
that there are about 30 such workmen who were engaged in such activities;
,
... that in keeping with the past practice, the respondent had reasons to apprehend
that the moment any of the workmen con1pletes 11 1nonths of seivice, the E
services of such employee would be terminated. It is submitted on behalf of
the respondent that tl1e recruitment of such workmen is done by the appellant
and upon selection such workmen are sent to appellant's doctor for medical
check np. However, they are not given any appointment letters but are given
attendance cards by the second respondent only to show that they are the F
employees of the second respondent and not that of the appellant. They
claimed that they are the workmen working under the direct supervision,
control and direction of tl1e officers of the appellant who assign work to diem
and they are granted leave by the ot1icers of the appellant and are also paid
by the appellant; that the compm1y is the real employer apart from being the
employees because of statutory obligation of the company to employ such
G
workmen; that, however, the appellant denied the rdationship of employer- .
employee from various stages; that such denial of relationship is only to
,. - f
deprive the workmen of permanency in the company and payment of wages
as are applicable to the permanent workmen of the company; that the com-
pany has denied this relationship as employer and thus this cause of action H
-(

6 SUPREME COURT REPORTS [2001] 2 S.C.R.

A has arisen in this complaint; that the appellant has engaged in unfair labour c-
practices in terms of Act and it be directed to cease and desist from continuing 1-
to do so.

Tue appellant, apart from denying that it is guilty of unfair labour
practices under Items !(a), (b), (d) and(!) of Schedule IV of the Act, contended
B that the persons listed in Exhibit "A" and referred to in the complaint are not
the employees of the company nor are they employed ostensibly through the
second respondent. The appellant categorically denied that they are the em-
ployees of the company and there has never been any employer-employee
relationship between them and, therefore, the question of terminating the serv- ,
c ices of the employees employed by the second respondent would not arise. The
appellant contended that since it is ~ngaged in the manufacture of pharmaceu-
tical products for which a high degree of cleanliness and hygiene ;s required
to be maintained and, therefore, it is necessary for the company to seek the
services of the specialised agencies and this practice has been in vogue for
D several years and in the last eight year such services have been obtained from
three different agencies and they are (i) Mis Estate Services, (ii) Mis Advent
Clean & Care Cmporation and (iii) Mis Deluxe Estate Services. The second
respondent had been engaged as an agency for rendering house- keeping and
hygiene services and the terms of the engagement were set out in a Jetter dated
28.2.1992. Pursuant to such rendering of services the second respondent had
E engaged services of the persons named in Exhibit "A". The appellant con-
tended that the named persons in the Exhibit "A" to the complaint are those
""'
who have joined the second respondent only during the last 3 to 8 months. The
appellant denied that it interviewed and selected the persons to be employed
by the second respondent, but it was expected that persons employed by the
F second respondent were subjected to periodical medical examination in order
to comply with the statutory requirements for maintaining proper hygiene
integrity of the manufacturing processes of the company. It is also dertied by
the appellant that the workmen are working under the direct control and
supervision of the officers of the company and there is any employer-employee
G relationship between them. It was submitted that the second respondent pays
wages to tl1ose employees in accordance with or more than the minimwn
wages. It is also contended that the appellant has obtained registration as
required under the earlier Act and the copy of which was produced in the
proceedings. TI1e second respondent supported the contentions made by the
.,_ -
appellant.
H
CIPLA LTD. v. MAHARASHTRA GENERAL KAMGAR UNION [R. BABU, J.] 7

The Labour Court on the basis of these pleadings framed the following A
+ issues:

ISSUES

I. Does the complainant prove that the company indulged in unfair
Jabour practices as alleged ? B
2. __deleted__

3. Does he prove that he is entitled the relief as prayed for?

4. What order ?
c
ADDITIONAL ISSUES

3A. Whether the complaint is maintainable?

3B. Whether the complainant prove that the names in Annexure
A' are the workmen of the Respondent No. I? D

3C. Whether this Court has jmisdiction to entertain the complaint?

The Labour Court, after elaborate consideration of the pleadings and
evidence on record, came to the following conclusion:
E
"It can be seen from the evidence on record and tl1e documents filed
by the parties that different contractors engaged by the first respond-
ent company and these workmen had never worked in the first
respondent company but they had worked through second respondent.
Hence, the anangement between the respondent No. 1 & 2 can be said F
to be legal and bonafide. The second respondent bas also obtained
licence No. 2796 nnder the provisions of Contract Labour (Regula-
tion & Abolition) Act, 1971 which is at Exh.C-14 at page 5. The
respondent No. 2 has its own separate and independent establishment
which has been registered under the provisions of Bombay Shops and
Establishment Act, 1948. It is also independently and separately G
registered nnder the provisions of Employees Provident Fnnd and
Miscellaneous Provisions Act. These documents are produced at
Sr.No. I 0 of Exh.C-14. From these documents, it is crystal clear that
it is a separate entity and there is a contract between the first
respondent and second respondent in respect of sweeping and clean- H
8 SUPREME COURT REPORTS [2001] 2 S.C.R.

A ing in the company premises.

After further examination, it was held that the arrangement between the
appellant and the second respondent can only be termed as legal and bona
fide and hence the matter of abolition of contract labour in the process of
honse-keeping and maintenance of die premises of the factory can be agitated
B only under the provisions of Contract Labour (Regulation and Abolition) Act,
1970. Therefore, the Labour Court dismissed the complaint filed by the first
respondent-Union. When the matter was carried by revision under the Act the
Industrial Court dismissed the revision application by reiterating the views of
the Labour Court.
c
ln the writ petition the Division Bench of the High Court took a
different view of the matter and allowed the complaint. Before the High Court
several decisions were refeITed to including· the decision of this Court in
General Labour Union (Red Flag), Bombay v. Ahmedabad Mfg. & Calico
Printing Co. Ltd &Ors., [1995] Supp. 1SCC175. In that case the complaint
D
of the Union was that 21 workmen who were working in one of the canteens
of the respondent-company were.not given the service conditions as were
available to the other workmen of d1e company and there was also a threat
of termination of their services. This Court proceeded to consider the case on
the basis that their complaint was that the workmen were the employees of
E the company and, therefore, the breach committed and the threats of retrench-
ment were cognizable by the Industrial Comt or the Labour Court under the
Act. Even in the complaint no case was made out that the workmen had ever
been accepted by the compauy as its employees. On the other hand, the
complaint proceeded on the basis as if the workmen were a part of the work
F force of the company. This Comt noticed thai the workmen were never
recognised by the company as its workmen and it was the consistent conten-
tion of the company that d1ey were not its employees. In those circumstances,
the lndusttial Court having dismissed the complaint and the High Comt
having upheld the same, this Comt stated that it was not established that the
workmen in question were the workmen of the company and in those circum-
G stances, no complaint could lie under the Act as was held by the two comts.
In that case it was the admitted position that the workmen were employed by
a contractor, who was given a contract to run the canteen in question.
Thereafter, the High Court adverted to the decision of this Court in Gujarat
Electricity Board, Themzal Power Station, Ukai, Gujarat v. Hind Mazdoor
H Sabha & Ors., [1995] 5 SCC 27, wherein it was noticed that the first question
CIPLA LTD. v. MAHARASHTRA GENERAL KAMGAR UNION [R. BABU, J.] 9
to be decided would be whether an industrial dispute could be raised for A
t abolition of the contract labour system in view of the provisions of the Act
and, if so,' who can do so. The High Court was of the view that the decision
in General Labour Union (Red Flag), Bombay v. Ahmedabad Mfg. & Calico
Printing Co. Ltd. & Ors. (supra) would make it clear that such a question can
be gone into and that the observations would not mean that the workmen had
B
to establish by some other proceedings before the complaint is filed or that
if the complaint is filed, the moment tlie employer repudiates or denies the
-~
relationship of employer and employees the court will not have any jurisdic-
tion. The observation of this Court that it is open· to the workmen to raise an
appropriate industrial dispute in that behalf if they are entitled to do so has
to. be understood in the light of the observations of this Court made earlier. c
The High Court further held that the judgment in General Labour Union (Red
Flag), Bombay v. Ahmedabad Mfg. & Calico Printing Co. Ltd. & Ors. (supra)
was confined to the facts of that case. On that basis the High Court proceeded
).
to further consider the matter and reversed the findings recorded by the two
courts and gave a finding that the workmen in question are the workmen of
D
the appellant-company.

Jn this Court it was submitted that the High Court had proceeded

.. entirely on wrong lines. In GujaraJ Electricity Board, Thermal Power Station,
GujaraJ v. Hind Mazdoor Sabha (supra) the question raised was whether the
workers whose services were. engaged by. the contractors but who were E
working in the thermal power station of the Gujarat Electricity Board at Ukai
can legally claim to be the employees of the Gujarat Electricity Board. The
industrial tribunal had adjudicated the matter and held that the workmen
concerned in the reference could not be the workmen of the contractors and,
therefore, all the workmen employed by the contractor should be deemed to F
be the workmen of the Board. The industrial tribunal also gave consequential
.....
directions to the Board for payment of wages, etc. The. award of the industrial
tribunal was upheld by the High Court in appeal. The contention put forth
' before this Court was that after coming into force of the Act it is only the
appropriate Goverurnenl, which can abolish the contract labour system after
consulting the Central Board or the State Board, as the case may be, and no G

-
other authority including the industrial tribunal has jurisdiction either to
entertain such dispute or to direct abolition of the contract labour system and
neither the approp1iate Goverurnent nor the industrial tribunal has the power
to direct that the workmen of the erstwhile contractor should be deemed to
be the workmen of the Board. The Central Goverurnent or the industrial H
10 SUPREME COURT REPORTS [2001] 2 S.C.R.

A tribunal, as the case may be, can only direct the abolition of the contract
labour system as per the provisions of the Act bnt it does not permit either
of them to declare the erstwhile workmen of the contract to be the employees
of the principal employer. As to what would happen to an employee engaged
by the contractor if contract employment is abolished is another moot ques-
tion yet to be decided by this Court. Bnt that is not a point on which we are
B
called upon to decide in this matter.

But one thing is clear - if the employees are working under a contract
covered by the Contract Labour (Regula''on & Abolition) Act then it is clear
that the labour court or the industrial adjudicating authorities cannot have any
c jurisdiction to deal with the matter as it falls within the province of an
appropriate Government to abolish the same. If the case put forth by the
workmen is that they have been directly employed by the appellant-company
but the contract itself is a camouflage and, therefore, needs to be adjudicated
is a matter which can be gone into by appropriate industrial tribunal or labour
court. Such question cannot be examined by the labour court or the industrial
D
conrt constituted under the Act. The object of the enactment is, amongst other
aspects, enforcing provisions relating to unfair labour practices. If that is so,
unless it is undisputed or indisputable that there is employer-employee rela-
tionship between the parties, the question of unfair practice cannot be inquired
into at all. The respondent union came to the Labour Court with a complaint
E that the workmen are engaged by the appellant through the contractor and
though that is ostensible relationship the true relationship is one of master and
servant between the appellant and the workmen in question. By this process,
workmen repudiate their relationship with the contractor under whom they are
employed but claim relationship of an employee under the appellant. That
F exercise of repudiation of the contract with one and establishment of a legal
relationship with another can be done only in a regular industrial tribunal/
court under the I.D.Act.

Shri K.K. Singhvi, the learned senior Advocate appearing for the re- ,
spondent, submitted that under Section 32 of the Act the labour court has the
G power to "decide all matters arising out of any application or complaint
referred to it for the decision under any of the provisions of the Act". Section
32 would not enlarge the jurisdiction of the court beyond what is conferred
upon it by other provisions of the Act. If under other provisions of the Act
the industrial tribunal or the labour court has no jurisdiction to deal with a
H particular aspect of the matter, Section 32 does not give such power to it. In
CIPLA LTD. v. MAHARASHTRA GENERALKAMGAR UNION [R. BABU, J.] 11

the cases at hand before us, whether a workman can be stated to be the A
workman of the appellant establishment or not, it must be held that the contract
t between the appellant and the second respondent is a camouflage or bogus and
upon such a decision it can be held that the workman in question is an employee
of the appellant establishment. That exercise, we are afraid, would not fall
within the scope of either Section 28 or Section. 7 of the Act. In cases of this
B
nature where the provisions of the .Act are summary in nature and give drastic
remedies to the parties concerned, elaborate consideration of the question as
to relationship of employer-employee cannot be gone into. If at any time the
_....
employee concerned was indisputably an employee of the establishment and
subsequently it is so disputed, such a question is an incidental question arising
under Section 32 of the Act. Even the case pleaded by the respondent-Union c
itself is that the appellant establislunent had never recognised the workmen
mentioned in Exhibit "A" as its employees and throughout treated these
persons as the employees of the second respondent. If that dispute
existed throughout, we think, the labour court or the industrial court under
the Act is not the appropriate court to decide such question, as held by
D
this Court in General Labour Union (Red Flag), Bombay v. Ahmedabad
Mfg. & Calico Printing Co. Ud. & Ors. (supra), which view was reiterated
by us in Vividh Kamgar Sabha v. Kalyani Steels Ud. & Anr., [2001] l SCALE
82.

However, Shri Singhvi very strenuously contended, by adverting to the E
scope of the Payment of Wages Act, 1936 and the scope of Section 32C(2)
of the Industrial Disputes Act, that these questions can be gone into by the
courts and, in this contex~ he relied upon the decision of the High Court of
Bombay in Vishwanath Tukaram v. The General Manager, Central Railway,
V.T., Bombay, 59 BLR 892. In determining whether the wages had been F
appropriately paid or not, the authority under the Payment of Wages Act was
.
_
held to have jurisdiction to decide the incidental question of whether the
applicant was in the employment of the railway administration during the
relevant period. It means that at one time or the other the concerned employee
was indisputably in employment and later on he was found to be not so
employed and in those circumstances, the court stated that it was an incidental G
question to be considered.

Next decision relied upon by Shri Singhvi is The Central Bank of India
_,.-
' Ud. v. P.S. Rajagopalan etc., (1964] 3 SCR 140, to contend that even in cases -
arising under Section 33C(2) of the Industrial Disputes Act the scope, though H
12 SUPREME COURT REPORTS [2001] 2 S.C.R.

A very limited, certain incidental questions can be gone into like a claim for
special allowance for operating adding machine which may not be based on
lhe Sastry Award made under lhe provisions of Chapter V-A. The learned t
counsel pointed out lhat in lhe event we were to hold lhat it is only in clear .
cases or undisputed cases lhe labour court or lhe industrial tribunal under lhe
Act can examine lhe complaints made !hereunder, lhe whole provision would
B
be rendered otiose and in each of !hose cases provisions of lhe Bombay
lndustrial Relations Act, 1946 or lhe lndustrial Disputes Act will have to be
invoked. We are afraid lhat this argument cannot be sustained for lhe fact lhat
even in respect of claims arising under Section 33C(2) appropriate dispute can
be raised in terms of Section I 0 o~ lhe lndustrial Disputes Act and lhat has
c not been lhe position in lhe present case. Nor can we say lhat even in cases
where employer-employee relationship is undisputed or indisputably referring
to lhe history of relationship between lhe parties, dispute can be settled and
not in a case of the present nature where. it is clear lhat lhe workmen are
working under a contract. But it is only a veil and lhat will have to be lifted
to establish lhe relationship between lhe parties. That exercise, we are afraid,
D
can also be done by lhe industrial tribunal under lhe Bombay Industrial
Relations Act, 1946 or under lhe Industrial Disputes Act. Therefore, we are
afraid that the contention advanced very ably by Shri Singhvi on behalf of
lhe respondents cannot be accepted. Therefore, we hold lhat the High Court
went far beyond lhe scope of lhe provi.sions of lhe Act and did not correctly
E understand lhe decisions of lhis Court in Gujarat Electricity Board, Thermal
Power Station, Gujarat v. Hind Mazdoor Sabha (supra) and General Labour
Union (Red Flag), Bombay v. Ahmedabad Mfg. & Calico Printing Co. Ltd.
& Ors. (supra). The correct inteipretation of lhese decisions will lead to lhe
result, which we have stated in lhe course of lhis order
F
In the view we have taken on lhe question of jurisdiction of the Labour
Court under lhe Act, lhe decision given by lhe High Court on olher questions
need not be considered.

In the circumstances, we allow this appeal, set aside lhe order of lhe
G High Court and restore that of lhe industrial court affirming the order of lhe
labour court. No costs

v.s.s. Appeal allowed.