MAHANADI COALFIELDS LTD.versusBRAJRAJNAGAR COAL MINES WORKERS’ UNION

                 [2024] 3 S.C.R. 627 : 2024 INSC 199

                      Mahanadi Coalfields Ltd.
                                 v.
              Brajrajnagar Coal Mines Workers’ Union
                   (Civil Appeal No. 4092-4093 of 2024)
                                12 March 2024
 [Pamidighantam Sri Narasimha* and Sandeep Mehta, JJ.]

                           Issue for Consideration
       Whether the Tribunal was justified in entertaining the reference of
       an industrial dispute when a binding settlement under Section 18
       (1) read with Section 19(2) and Section 36 of the Industrial Dispute
       Act, 1947 was arrived at between the parties.

                                  Headnotes
       Industrial Dispute Act, 1947-Section 10 - Reference of disputes;
       Section 18 (1) read with Section 19(2) - Settlement binding
       on all parties.
       32 workers, working continuously for 10 years, sought regularisation
       on the basis of Clause 11.5.1 and Clause 11.5.2 of the National
       Wage Agreement IV - Settlement arrived between the labour
       union and management under Rule 58 of the Industrial Disputes
       (Central) Rules, 1957 - 19 workers regularised - 13 workers’ job
       described as ‘purely casual’ – Central Government invoked power of
       reference to Tribunal - Tribunal found that the (1) 13 workers were
       on same footing as regularised workers, granted regularisation (2)
       job was perennial in nature (3) management could not establish
       distinction - Concurrent findings by High Court in Writ Petition and
       Review Petition.
       Held: 13 workers entitled to regularisation on parity basis –
       Workers entitled to back wages on grounds of wrongful denial of
       employment and regularisation – Back wages to be calculated
       from the date Tribunal’s decision in reference – Under Article 136
       only substantial questions of law can be entertained [Paras 16,
       18, 20, 22, 23, 24].

                                Case Law Cited
            J.K. Synthetics Ltd. v. K.P. Agarwal [2007] 2 SCR 60 :
            (2007) 2 SCC 433 – referred to.
* Author
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                                  List of Acts
       Industrial Dispute Act, 1947; Industrial Disputes (Central) Rules,
       1957.

                               List of Keywords
       Settlement; Back Wages; Artificial Distinction; Nature of Job; Same
       footing; Reference; Conciliation; Regularisation; Wrongful Denial
       of employment.

                              Case Arising From
       CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4092-4093
       of 2024
       From the Judgment and Order dated 11.01.2017 in WPC No.2002 of
       2002 and dated 11.11.2021 in RVWPET No.77 of 2017 of the High
       Court of Orissa at Cuttack
                           Appearances for Parties
       Aman Lekhi, Sr. Adv., Soumyajit Pani, Aishwary Bajpai, Siddharth
       Jain, Advs. for the Appellant.
       Ashok Kumar Panda, Sr. Adv., Tejaswi Kumar Pradhan, Mohan
       Prasad Gupta, Manoranjan Paikaray, Shashwat Panda, Advs. for
       the Respondent.
                  Judgment / Order of the Supreme Court

                                     Judgment
       Pamidighantam Sri Narasimha, J.
1.     Delay condoned. Leave granted.
2.     The Appellant, Mahanadi Coalfields Ltd., a subsidiary of Coal India
       Ltd. floated a tender for the transportation of crushed coal and
       selected a successful contractor for performance of the agreement
       for the period 1984 to 1994. The contractor employed workmen for
       execution of this contract.
3.     The respondent-union espoused the cause of the workmen who were
       engaged by the contractor and sought permanent status for them.
       It relied on clauses 11.5.1 and 11.5.2 of the National Coal Wage
       Agreement-IV dated 27.07.1989. Under these clauses, it was agreed
       that the employer shall not engage contract labour with respect to
[2024] 3 S.C.R.                                                           629

 Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union


     jobs which are permanent and perennial in nature. They also provide
     that such jobs shall be executed through regular employees.
4.   Following the representation of the respondent-union, the Assistant
     Labour Commissioner sent a notice to the appellant for conciliation.
     The conciliation process eventually culminated in a settlement dated
     05.04.1997 under Rule 58 of the Industrial Disputes (Central) Rules,
     1957. The relevant portion of the settlement is as follows:
           “The Union has submitted a list of 32 persons said to have
           been engaged by the contractors and demanded for their
           regularisation. Alter verification, it was observed, that the
           following persons are engaged in Bunker for operating
           Chutes.

            SI      Name of the Person                  Father’s
            No.                                         Name
            01.     Sri Sadanand Bhoi                   Keshab
            02.     Sri Purusottam Dau                  Govardhan
            03.     Sri Anta Barik                      Gadadhar
            04.     Sri Aditya Nikhandia                Cheru
            05.     Sri Bhabagrahi Pradhan              D. Pradhan
            06.     Sri Sudarshan Khandit               Masru
            07.     Sri Ashok Kumar Rout                Sitaram
            08.     Sri Krishna Dau                     Goverdhan
            09,     Sri Abhimanyu Kisan                 Chhala
            10.     Sri Lakhan Bhoi                     Keshab
            11.     Sri Jay Narayan Bhoi                Chaitan
            12.     Sri Sanatan Kisan                   Ugresan
            13.     Sri Giridhari Raudia                Goverdhan
            14.     Sri Daitari Pradhan                 Nira
            15.     Sri Subram Bag                      Buchhu
            16.     Sri Madhu Marai                     Dasa
            17.     Sri Fakir Khamari                   Kartik
            18.     Sri Sanatan Naik                    Ram Krishna
            19.     Sri Sanatan Bhoi                    Tiharu

                  Since this operation is of permanent and
                  perennial nature, it was agreed to regularise
                  the above 19 (nineteen) persons as General
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                  Mazdoor, Category-I, in the NCWA-V Pay Scale
                  of Rs. 65.40-1.08-85.52.
                  In respect of other persons, it was contended,
                  that they are engaged in purely casual nature
                  of jobs, which are not prohibited under Contract
                  Labour (R&A) Act, 1970, and accordingly, they
                  are not eligible for regularisation.”
5.     In view of the fact that the settlement is confined to only 19 workmen,
       the Central Government referred the entire dispute to the Industrial
       Tribunal under Section 10 (2A)(1)(d) of the Industrial Disputes Act,
       1947, on 20.05.1997 registered as Dispute Case no. 27/2001 before
       the Industrial Tribunal, Rourkela, Odisha. Before the Tribunal, the
       workmen examined 3 witnesses in support of their case and the
       management examined 4 witnesses.
6.     By its judgment dated 23.05.2002, the Tribunal allowed the industrial
       dispute and directed the regularization of the remaining 13 workmen.
       The important findings of the Tribunal are as follows. At the outset, the
       Tribunal rejected the preliminary objection that it had no jurisdiction
       under the Contract Labour (Regulation and Abolition Act), 1970 and
       proceeded to consider the nature of the work that the 13 workmen
       were performing. Having considered the matter in detail, the Tribunal
       held that the work of removing spillages in the railway siding, below
       the bunker and operation of chutes (in the bunker) are regular
       and perennial in nature. Having considered the evidence of the
       management witnesses, the Tribunal concluded that the nature of
       the work is perennial. Accordingly, the remaining 13 workers were
       directed to be regularized in the following terms:
            “The evidence is straight and clear that all the 32 persons
            were attending the same of. The rest 13 persons whose
            cases have not been regularized were attending the same
            job, which was being attended by 19 persons whose services
            has been regularized. So standing on the same footing the
            cases of the rest 13 persons should not have been ignored
            on the ground that, they did not deserve to be regularized as
            reflected in the settlement. In my opinion when 19 persons
            have been regularized the case of rest 13 persons who
            were attending the same type of work should have been
            regularized without any cause. The ground stated in the
[2024] 3 S.C.R.                                                           631

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           settlement that they do not deserve, in my opinion does not
           appears to be a genuine ground to discard the cases of the
           rest 13 persons. I am not inclined to burden the award by
           placing all the submissions made on behalf of the parties.
           It is necessary to refer the evidence of the Witness No. 2
           examined on behalf of the 1st Party Management. As per
           clause 11.5.0 of N.C.W.A. IV the Contract Labourers cannot
           be engaged for permanent and perennial nature of job. He
           has further stated that, they had entered to a settlement
           regarding those 19 persons. His further evidence is that the
           persons out of 13 were also working in Coal Handling Plant,
           which is a permanent and perennial in nature. The evidence
           of the Witness No. 3 of the 1st Party Management is that,
           the work of railway siding is also a regular and perennial in
           nature for which the 19 persons have been regularized. All
           the 32 persons were attending the job of removing spillages
           for railway Biding below the bunker and also the operation
           of the chutes in the bunker. So in view of such evidence it
           cannot be said that the rest 13 persons were not attending
           the job which were being attended by the 19 persons whose
           services has been regularized. So in my opinion, even if
           there has been a settlement between the parties regularizing
           19 persons the rest of 13 persons has got cause of action
           to raise the Industrial separate and their case should not
           have been ignored. In the other words the action of the 1st
           Party Management in not regularizing the services of the
           rest 13 persons in accordance was N.C.W.A. IV is illegal
           and unjustified. Hence, this Issue is answered accordingly.”
7.   Questioning the legality and validity of the Tribunal’s judgment, the
     appellant filed a Writ Petition (C) numbered 2002/2002 before the
     Orissa High Court.
8.   The Division Bench of the High Court heard the matter, and by its
     judgment, impugned before us, dismissed the writ petition. The High
     Court referred to the nature of work performed by the workmen
     and affirmed the findings of the Tribunal based on the evidence of
     witnesses such as MW3, the personal manager in the appellant
     company. The High Court took note of his evidence that the work on
     railway sidings was regular and perennial in nature. He also admitted
     that it is with respect to that work for which the 19 workers were
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       regularized. The High Court also observed that there was no evidence
       to dispute that all 32 workers were engaged in removing spillages
       from railway sidings and below the bunker, which is in addition to
       operating chutes. The High Court, therefore, upheld the view taken
       by the Tribunal. The Review Petition bearing No. 77/2017 filed by
       the management was also dismissed by the order dated 11.11.2021.
9.     We have heard Mr. Aman Lekhi, learned Senior Counsel appearing
       on behalf of the appellant, assisted by Mr. Siddharth Jain, Mr.
       Soumyajit Pani and Ms. Aishwary Bajpai, Advocates and also Mr.
       Ashok Kumar Panda, learned Senior Counsel for the respondent-
       union, assisted by Mr. Tejaswi Kumar Pradhan, Mr. Mohan Prasad
       Gupta, Mr. Manoranjan Paikaray and Mr. Shashwat Panda, Advocates.
10. Submissions of the appellant: Before this court, the appellant
    company contends that the Award dated 23.05.2002 is bad in law. It
    argues that the settlement was binding on the parties due to Section
    18(1) read with Section 36, Industrial Disputes Act and it continues
    to be so by virtue of Section 19(2) of the Act, since the settlement
    was never terminated.
       10.1 The settlement was reached after verification of the nature of
            works performed. It was found that 19 workers were performing
            perennial and permanent work and the work of the remaining
            13 workers was ‘casual’ in nature.
       10.2 There was no provision to regularize such workers under the
            NCWA-IV. The only provision under which regularization could
            be claimed would be Section 25F of the Industrial Disputes
            Act, but the said provision applies only to workers who worked
            under the direct supervision of the company for a certain period
            and wrongfully stopped thereafter. In the present case, as the
            workmen worked under the supervision of a contractor and not
            the appellant, Section 25F will have no application.
       10.3 Lastly, it is contended that the Tribunal had wrongly directed
            the appellant to disburse backwages to the 13 workers. This
            is contrary to the settled principle that grant of backwages can
            never be automatic or a natural consequence of regularization.
            The workers seeking regularization and backwages have an
            onus to show that they are not gainfully employed. For this,
            the appellant relied on J.K. Synthetics Ltd. v. K.P. Agrawal &
            anr. reported as (2007) 2 SCC 433 to support this contention.
[2024] 3 S.C.R.                                                       633

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11. Submissions of the respondent-union: The respondent-union
    submitted that all 32 workers were engaged in works of a similar
    nature. They assert that the list in the industrial reference dated
    20.05.1997 shows that workers were arbitrarily deprived of
    regularization, wherein certain workers from the bunker and the
    plant were left out of the settlement without any reason. It is also
    argued that the work in the railway siding was perennial and regular
    in nature, similar to the works in the bunker.
     11.1 To support its contentions, the respondent-union relies on the
          evidence of MW3 and MW4, who were the personal manager
          and the project officer in the appellant company, respectively.
          While MW3 categorically admitted that the removal of spilled
          coal from the railway siding, the bunker and the Coal Handling
          Plant is regular and perennial in nature, MW4 stated that all 32
          workers were engaged similarly. It is therefore submitted that
          their evidence proves that the 13 workers actively participated
          in tasks deemed regular and perennial.
     11.2 Since there was no resolution of the claim of regularization
          of similarly placed workers, they have the right to pursue the
          remedy under the Industrial Disputes Act, 1947. It is submitted
          that Rule 58 of the Industrial Dispute (Central) Rules, 1957
          under which the settlement occurred, nowhere poses a legal
          obstruction to the remedy.
     11.3 It is finally submitted that the 13 workmen suffered for no fault
          of theirs and an order of regularization must naturally lead to
          grant of consequential backwages.
12. Analysis and findings: Having heard the parties in detail, we are
    of the opinion that the present appeals can be disposed of for the
    following reasons.
13. At the outset, the appellant objected to the Tribunal entertaining
    the industrial dispute passing of the award on the ground that a
    settlement under S. 18(1) read with S. 36 of the Industrial Disputes
    Act is binding on all the parties under S. 19(2) of the Act. This is
    the substantive part of the submission on behalf of the appellant.
    The facts of this case, as they unfold, leading to the arrival of the
    settlement, followed by the reference to the Industrial Tribunal, and
    then the award, are necessary for our consideration.
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14. At the first place, all the 32 workmen commenced their work
    through the contractor from 1984 and continued till 1994. In 1994,
    the respondent-union espoused the cause of all the 32 workers
    and the Asst. Labour Commissioner took up the entire cause. This
    culminated in the settlement dated 05.04.1997, relied upon by the
    appellant.
15. To appreciate the submission that the settlement is the last word
    and that the Tribunal could not have entertained the reference or
    passed the Award, the following facts become crucial.
16. The settlement itself talks about the claim of the 32 workers raised
    by the respondent-union. It then talks about the contention of the
    management that others are engaged in ‘purely casual’ nature of jobs.
    In the very next sentence, it agreed to regularize 19 contractors. It is
    important to note that, being conscious of the fact that the settlement
    provides for the regularization of 19 out of the 32 workmen, the
    Government invoked the power of reference to refer the matter to
    the Tribunal to adjudicate the interest of all the 32 workers. The
    Tribunal was naturally bound by the reference to consider the claim
    of all the 32 workers.
17. Despite the fact that there was a settlement with respect to some
    of the workmen, the Tribunal was tasked to examine the entire
    reference and give independent findings on the issue. Thus, the
    Tribunal was justified in giving its award on the reference made by
    the central government. This answers the objection raised by the
    appellant about the jurisdiction of the Tribunal.
18. We are also conscious of the fact that the jurisdiction that we exercise
    is under Article 136 of the Constitution. The findings of fact arrived
    at by the Tribunal are unassailable. We are also of the opinion that
    the High Court has correctly rejected the writ petition filed against
    the award. Apart from the concurrent findings of fact, we see no
    substantial question of law in these appeals.
19. Even otherwise, the present case is not one where this court would
    exercise its discretion. What appeals to us is that the 32 workers who
    entered the service of the appellant in 1984, continued uninterruptedly
    till 1994, when the respondent-union sought their permanence. In the
    settlement arrived in 1997, the stand of the appellant with respect
    to the 13 workers is as follows:
[2024] 3 S.C.R.                                                         635

 Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union


           “In respect of other persons, it was contended that they
           are engaged in purely casual nature of jobs which are
           not prohibited under Contract Labour (R&A) Act, 1970
           and accordingly, they are not eligible for regularisation.”
20. It is proved that the remaining workers stand on the same footing as
    the regularized employees, and they were wrongly not made part of
    the settlement. This is established by the Tribunal, by examining the
    nature of work undertaken by the first set of 19 workmen and that of
    the other 13 workmen. It also examined Shri Arun Ch. Hota (WW3),
    the Deputy General Manager (MW2), Mr. Udayshankar Gonelal, the
    Personal Manager (MW3) and Shri S. Agarwal, the Project Officer
    (MW4). The Tribunal finally came to the conclusion that the nature
    of the duties performed by the 13 workmen are perennial in nature.
    The appellant has failed to establish any distinction between the two
    sets of workers. The Tribunal was, therefore, justified in answering
    the reference and returning the finding that they hold the same status
    as the regularized employees.
21. We are also not impressed with the artificial distinction which the
    appellant sought to bring about between the 19 workers who were
    regularized and the 13 workers who were left out. The evidence on
    record discloses that, of the total 32 workmen, 19 workers worked in
    the bunker, 6 worked in the Coal Handling Plant, and 7 worked on
    the railway siding. However, of the 19 workers who were regularized,
    16 worked in the bunker, and 3 worked in the Coal Handling Plant.
    However, 3 workers from the same bunker, 3 workers from the same
    Coal Handling Plant and again 7 workers from the same railway
    siding were not regularized. A tabulated representation of the above
    description is as follows:

      Site of work          No. of           No. of         No. of
                            workers who      workers        workers not
                            executed         who were       regularized
                            works            regularized
      Bunker                19               16             3
      Coal Handling Plant 6                  3              3
      Railway Siding        7                -              7
      Total:                32               19             13
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22. The above-referred facts speak for themselves, and that is the
    reason why the Tribunal has come to a conclusion that the denial
    of regularization of the 13 workmen is wholly unjustified. As stated
    previously, we do not find any grounds in the artificial distinction
    asserted by the appellant. However, as the case was argued at length
    we thought it appropriate to give reasons for rejecting the appeals.
    What we have referred to hereinabove are all findings of fact by the
    Tribunal as affirmed by the High Court. In view of the concurrent
    findings of fact on the issue of nature of work, the continuing nature
    of work, continuous working of the workmen, we are of the opinion
    that there is no merit in the appeals filed by the appellant.
23. This is a case of wrongful denial of employment and regularization,
    for no fault of the workmen and therefore, there will be no order
    restricting their wages.
24. With respect to payment of backwages, we are of the opinion that
    the workmen will be entitled to backwages as observed by the
    Industrial Tribunal. However, taking into account, the long-drawn
    litigation affecting the workmen as well as the appellant in equal
    measure and taking into account the public interest, we confine the
    backwages to be calculated from the decision of the Tribunal dated
    23.05.2002. This is the only modification in the order of the Tribunal,
    and as was affirmed by the judgment of the High Court.
25. For the reasons stated above, the appeals arising out of the final
    judgment and order of the High Court in W.P. (C) No. 2002/2002
    and order in Review Petition No. 77/2017 are dismissed with the
    direction that the concerned workmen shall be entitled to backwages
    with effect from 23.05.2002. There shall be no order as to costs.


       Headnotes prepared by:                            Result of the case:
       Aishani Narain, Hony. Associate Editor            Appeals dismissed
       (Verified by: Madhavi Divan, Sr. Advocate)            with directions