Holding

The Court held that the interpretation of clause 2(ii) of ONGC’s Certified Standing Orders in the PCLU judgment is erroneous and, together with the applicability of the Umadevi principles, warrants reconsideration by a larger Bench.

Summary

The Supreme Court examined a batch of appeals filed by Oil and Natural Gas Corporation (ONGC) challenging High Court orders that regularised workmen based on the PCLU judgment. The Court questioned whether the PCLU decision correctly interpreted clause 2(ii) of ONGC’s Certified Standing Orders and whether it had considered earlier precedents on unfair labour practice under the Industrial Disputes Act. It also considered the applicability of the Umadevi principles to industrial adjudication and the scope of an unfair labour practice under Item 10 of Schedule V of the ID Act. Concluding that the construction in PCLU was prima facie erroneous and that the Umadevi principles required re‑examination, the Court referred the matters to a larger Bench for reconsideration. The appeals were therefore not disposed on merits but sent for further hearing.

Issues considered

Whether the PCLU judgment is per incuriam for not considering binding precedents on Item 10 of Schedule V of the Industrial Disputes Act.
Whether clause 2(ii) of ONGC’s Certified Standing Orders confers an absolute right to regularisation upon completion of 240 days of service.
Whether the principles laid down in Secretary, State of Karnataka v. Umadevi are applicable to industrial adjudication and to orders of regularisation.
What constitutes an unfair labour practice under Item 10 of the Vth Schedule of the Industrial Disputes Act.
Whether an unfair labour practice can be determined in a writ petition under Article 226 without a reference before the Industrial Tribunal.
Limits on the power of Labour and Industrial Courts to order regularisation in the absence of sanctioned posts.

Legislation cited

Contract Labour (Regulation and Abolition) Act, 1970
Industrial Disputes Act, 1947s. 25(T), s. 2(ra)
Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971s. Item 6 of Schedule IV, s. Section 30(1)(b)

Subjects

regularisationunfair labour practicecertified standing ordersIndustrial Disputes ActUmadevi principleper incuriamlarger bench referralArticle 12Article 14Article 226public employment

Judgment

[2020] 3 S.C.R. 661 661

OIL AND NATURAL GAS CORPORATION A
v.
KRISHAN GOPAL & ORS.
(Civil Appeal No. 1878 of 2016)
FEBRUARY 07, 2020 B
[DR. DHANANJAYA Y CHANDRACHUD AND
AJAY RASTOGI, JJ.]
Labour Laws:
Regularisation – In terms of clause 2(ii) of ONGC’s Certified C
Standing Orders – Upheld in four impugned orders on the basis of
judgment in *PCLU case – The plea of regularisation declined in
one impugned order distinguishing the decision in *PCLU case –
Appeal to Supreme Court – Held: The construction placed on the
provisions of clause 2(ii) of Certified Standing Orders, in the decision
D
in *PCLU case, does not prima facie appear to be correct – Besides
the decision is also per in curiam – Therefore, the decision needs
reconsideration – Matter to be placed before larger Bench to
reconsider *PCLU case – Matters to be placed before Larger Bench
also to consider applicability of principles laid down in #Umadevi
case in the context of industrial adjudication – Reference to Larger E
Bench.
Referring the matters to Larger Bench, the Court
HELD: 1. The decision in *PCLU Case holds that the
workmen upon completion of 240 days’ service in a period of 12
calendar months “are entitled for regularisation of their services F
into permanent posts of the corporation”. The Court further held
that under clause 2(ii) of the Certified Standing Orders, upon the
completion of 240 days of service in a calendar year, the workmen
have “acquired valid statutory right” and ought to have been
“granted the status of regular employees” of the corporation on G
the ground that the corporation which is an instrumentality of the
State under Article 12, cannot act arbitrarily or unreasonably. The
decision of the two judge Bench in *PCLU Case has placed a
construction on the provisions of clause 2(ii) of the ONGC’s
Certified Standing Orders which prima facie does not appear to
H

661
662 SUPREME COURT REPORTS [2020] 3 S.C.R.

A be correct. Besides, the fact that the decision in *PCLU Case
has not noticed the earlier judgment in **Engineering Mazdoor
Sangh Case which pertained to ONGC’s Certified Standing Orders,
the principles of law which have been expounded in *PCLU Case
would require to be revisited. [Para 17] [673-F-H, 674-A-B]
B Oil and Natural Gas Corporation Limited v. Petroleum
Coal Labour Union (2015) 6 SCC 494 : [2015] 5 SCR
474; State of Haryana v. Piara Singh (1992) 4 SCC
118 : [1992] 3 SCR 826; Mahatma Phule Agricultural
University v. Nasik Zilla Sheth Kamgar Union (2001) 7
SCC 346 : [2001] 3 SCR 1089; Regional Manager, State
C Bank of India v. Raja Ram (2004) 8 SCC 164; Regional
Manager, SBI v. Rakesh Kumar Tewari (2006) 1 SCC
530; Ajaypal Singh v. Haryana Warehousing
Corporation (2015) 6 SCC 321 – referred to.
2. The second aspect on which the present appeals would
D require to be placed before a larger Bench for consideration is in
regard to the applicability of the principles set out and formulated
by the Constitution Bench in *Umadevi Case in the context of
industrial adjudication. [Para 18] [674-C-D]
UP Power Corporation Ltd. v. Bijli Mazdoor Sangh
E (2007) 5 SCC 755 : [2007] 5 SCR 256; Maharashtra
State Road Transport Corporation v. Casteribe Rajya
Parivahan Karmchari Sanghatana (2009) 8 SCC 556;
Mahatma Phule Agricultural University v. Nasik Zilla
Sheth Kamgar Union (2001) 7 SCC 346 : [2001] 3 SCR
F 1089; State of Maharashtra v. R S Bhonde (2005) 6
SCC 751 : [2005] 2 Suppl. SCR 763; Hari Nandan
Prasad v. Employer I/R to Management of Food
Corporation of India (2014) 7 SCC 190 : [2014] 2 SCR
955 – referred to.

G 3. The decision in *PCLU Case needs to be revisited in
order to set the position in law which it adopts in conformity with
the principles emerging from the earlier line of precedent. More
specifically, the areas on which *PCLU Case needs
reconsideration are:(i) The interpretation placed on the
provisions of clause 2(ii) of the Certified Standing Orders; (ii)
H The meaning and content of an unfair labour practice under Section
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 663

2(ra) read with Item 10 of the Vth Schedule of the ID Act; (iii) A
The limitations, if any, on the power of the Labour and Industrial
Courts to order regularisation in the absence of sanctioned posts.
[Para 24] [679-D-G]
Case Law Reference
[2015] 5 SCR 474 referred to Para 1 B

[1992] 3 SCR 826 referred to Para 2
[2006] 3 SCR 953 referred to Para 2
[2001] 3 SCR 1089 referred to Para 4
C
(2004) 8 SCC 164 referred to Para 5
(2006) 1 SCC 530 referred to Para 5
[2006] 9 Suppl. SCR 177 referred to Para 5
[2006] 3 SCR 953 referred to Para 5
D
(2015) 6 SCC 321 referred to Para 10
[2007] 5 SCR 256 referred to Para 19
(2009) 8 SCC 556 referred to Para 20
[2001] 3 SCR 1089 referred to Para 20
E
[2005] 2 Suppl. SCR763 referred to Para 20
[2014] 2 SCR 955 referred to Para 21
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1878
of 2016.
F
From the Judgment and Order dated 12.10.2015 of the High Court
of Delhi at New Delhi in L.P.A. No. 654 of 2010.
With
Civil Appeal Nos. 935-937, 938-939, 934, 669-696 of 2020.
G
P.S. Narasimha, ASG, J.P. Cama, S. Guru Krishna Kumar, Ajit
Kumar Sinha, P.S. Patwalia, Lalit Bhasin, Ms. Nina Gupta, Ms. Palak
Chadha, Ms. Ruchika Joshi, Ms. Suruchi Kumar, Mudit Sharma, V.N.
Subramaniam, Ms. Anzu K. Varkey, Rajesh B., Ms. Shruta Gopalan,
Arindam, Ms. Madhusmita Bora, V.N. Koura, Ms. Aruna Mathur, Shirish
Kumar, Ms. Paramjeet Benipal, Anupam Roy, Ms. Anuradha Arputham H
664 SUPREME COURT REPORTS [2020] 3 S.C.R.

A (for M/S. Arputham Aruna and Co), Abhishek Puri, V. Siddharth, Manan
Gambhir, P. N. Puri, Ms. Asha Jain Madan, Mukesh Jain, Ms. Madhu
Talwar, Pranay Ranjan, Ms. Alka Aggarwal, Rajan Kumar Chaurasia,
R.R. Rajesh, Raj Bahadur, Lalit Sankhla, D. Mahesh Babu, Ms. Suchitra
Hrangkhawl, Ganesan Subbian, Katubadi Ismail, P. Prabhakar,
D. Srinivas, Venkateswara Rao Anumolu, Santosh Krishnan, Ankur
B
Yadav, P. Venkat Reddy, Prashant Tyagi, P. Srinivas Reddy, Advs. for
the appearing parties.
The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J.
C 1. This batch of appeals arises from the judgments of the High
Courts of Andhra Pradesh, Delhi, Madras and Uttarakhand. A judgment
of a two judge Bench of this Court in Oil and Natural Gas Corporation
Limited v Petroleum Coal Labour Union1 (“PCLU”) has assumed
focus since the decisions of the High Courts in four of the present appeals
have relied on the judgment of this Court in coming to the conclusion
D that the workmen were entitled to regularisation in service. In one of the
five appeals, however where the prayer for regularisation was rejected,
the decision in PCLU has been distinguished. Hence on either end of
the spectrum, the judgment in PCLU has a significant bearing on the
outcome of the appeals.
E 2. The manner in which the present appeals arise is indicated, for
convenience of reference, in the following tabulation:

Sl. Nos. Particulars Remarks
1. Civil Appeals @ SLP (C) The appeals arise out of a judgment dated 5
Nos. 15971-15998/2018 January 2018 of the Andhra Pradesh High
F ONGC & Ors. v. ONGC Court in 24 Writ Appeals and 4 Writ
Field Operators Union& Petitions. Th e High Court directed
Ors. regularisation of 450 workmen who moved
the High Court under Article 226 of the
Constitution without seeking a reference
before the Industrial Tribunal under the
Industrial Disputes Act 1947 2 . The
G judgment of the High Court has relied upon
the decision of this Court in PCLU (supra).

1
(2015) 6 SCC 494
2
H “ID Act”
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 665
[DR. DHANANJAYA Y CHANDRACHUD, J.]

2. Civil Appeal @ SLP (C) No. The appeal arises out of a judgment dated A
4/2016 Renumbered as 12 December 2015 of the High Court of
C.A.1878/2016 ONGC v. Delhi. Allowing a Letters Patent Appeal,
Krishan Gopal & Ors. the High Court directed regularisation of 24
workmen who had instituted proceedings
under Article 226 without seeking a reference
to the Industrial Tribunal under the
Industrial Disputes Act 1947. The High B
Court relied upon the decision of this Court
in PCLU (supra).

3. Civil Appeal @ SLP (C) No. The appeal arises from a judgment of the
10478/2016 M Rajan & Ors. Madras High Court dated 20 November
v. ONGC & Ors. 2015 in Writ Appeals. The High Court
rejected the prayer for regularisation made C
by the workmen who had instituted
proceedings under Article 226. The High
Court held that the remedy under the
Industrial Disputes Act 1947 could not be
bypassed. The High Court distinguished the
decision of this Court in PCLU (supra).
D
4. Civil Appeal @ SLP (C) No. The appeal arises from a decision of the
30854/2017 ONGC v. Tel High Court of Uttarakhand dated 3 August
AVM Prakartik Gas 2017 in writ proceedings under Article 226,
Karmchari Sangh as a consequence of which, nine workmen
have been directed to be regularised. The
High Court set aside the award of the
Industrial Tribunal which had held in favour
E
of ONGC, the employer. The High Court
relied on the decisions of this Court in PCLU
and in State of Haryana v Piara Singh3
(“Piara Singh”). (The decision in Piara
Singh has been overruled by the
Constitution Bench of this Court in F
Secretary, State of Karnataka v
Umadevi4).
5. Civil Appeal @ SLP (C) No. The appeal arises from the judgment of the
16455 /2018 The Madras High Court dated 29 January 2018
Management of ONGC v. by which the services of fourteen messengers
Petroleum Employees and three sanitary cleaners have been
G
Union regularised by the High Court. The award
of the Industrial Tribunal has been set aside.
The High Court has relied on the judgment
of this Court in PCLU (supra).
3
(1992) 4 SCC 118
4
(2006) 4 SCC 1 H
666 SUPREME COURT REPORTS [2020] 3 S.C.R.

A 3. In the appeals which are listed out at serial Nos 1, 2, 4 and 5 of
the table, ONGC, as the appellant seeks to challenge the judgments of
the High Courts directing or, as the case may be, upholding the plea for
regularisation on the basis of the decision in PCLU. In the appeal at
serial No 3, the workmen are before this Court against the judgment of
the High Court declining to grant the relief which was granted to the
B
workmen in PCLU on the ground that they had initiated proceedings
under Article 226 without availing of the remedy under the ID Act.
4. Appearing on behalf of the appellant, ONGC, in four appeals in
the above batch of appeals5, Mr P S Narasimha and Mr J P Cama,
learned Senior Counsel have formulated the following points for
C determination:
(i) Whether the decision of the two judge Bench of this Court in
PCLU is per incuriam on the ground that it did not consider
the binding precedents on the interpretation of Item 10 of
Schedule V of the ID Act, particularly those in :
D
• Mahatma Phule Agricultural University v. Nasik
Zilla Sheth Kamgar Union6;
• Regional Manager, State Bank of India v. Raja
Ram7;
E • Regional Manager, SBI v. Rakesh Kumar Tewari8;
and
• Oil & Natural Gas Corpn. Ltd v. Engg. Mazdoor
Sangh9.
(ii) Whether the interpretation which has been placed in PCLU
F
on clause 2(ii) of the Certified Standing Orders for contingent
employees of ONGC to the effect that a temporary workman
who has put in 240 days of attendance in any period of twelve
consecutive months and possesses the minimum qualifications
is entitled to regularisation, is correct in view of the fact that
G the standing order only provides that the ‘workman’ “may be
considered for conversion as regular employee”;
5
Serial Nos 1, 2, 4 and 5
6
(2001) 7 SCC 346
7
(2004) 8 SCC 164
8
(2006) 1 SCC 530
H 9
(2007) 1 SCC 250
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 667
[DR. DHANANJAYA Y CHANDRACHUD, J.]

(iii) Whether the view of the High Court of Andhra Pradesh that A
the principles enunciated in the judgment of the Constitution
Bench in Secretary, State of Karnataka v. Umadevi 10
(“Umadevi”) are not applicable to labour law, is correct;
(iv) What are the ingredients of an unfair labour practice under
Item 10 of Schedule V of the ID Act; and B
(v) Whether a finding of an unfair labour practice can be rendered
in a proceeding under Article 226 of the Constitution without
the workmen leading evidence in a reference under the ID
Act.
5. Section 25(T) of the ID Act contains a prohibition against C
employers, workmen and trade unions resorting to unfair labour practices.
It provides:
“25 (T). Prohibition of unfair labour practice – No employer or
workman or a trade union, whether registered under the Trade
Unions Act, 1926 (16 of 1926) or not, shall commit any unfair D
labour practice.”
The expression “unfair labour practice has been defined in Section
2(ra):
“2(ra) “unfair labour practice” means any of the practices specified
E
in the Fifth Schedule.”
Among the unfair labour practices set out in the Vth Schedule,
Item 10 provides as follows:
“10. To employ workmen as “badlis”, casuals or temporaries and
to continue them as such for years, with the object of depriving F
them of the status and privileges of permanent workmen.”
The decision in PCLU
6. ONGC was in appeal against an award of the Industrial Tribunal
directing it to regularise the services of security guards and supervisors
with effect from the date on which they had completed 480 days. ONGC G
had a project in Cauvery Basin, Karaikal in the Union Territory of
Puducherry. It employed contract workmen as security guards and
supervisors. On 8 December 1976, contract labour was abolished for

10
(2006) 4 SCC 1 H
668 SUPREME COURT REPORTS [2020] 3 S.C.R.

A watch and ward, dusting and cleaning jobs by the Government of India
under Section 10(1) of the Contract Labour (Regulation and Abolition)
Act 1970. Under an agreement with the trade unions, the management
of ONGC utilized the services of the erstwhile contract workmen through
a labour cooperative society which was formed for the welfare of the
contract workmen. Subsequently, security work was entrusted to the
B
Central Industrial Security Force to protect the installations. The workmen
were later on appointed as part of watch and ward security on a term
basis subject to the condition that the Certified Standing Orders would
not apply to them. On a demand by the workmen, a reference was
made to the Industrial Tribunal to adjudicate on whether the management
C was justified in not regularising the workmen and in failing to pay equal
wages to the workmen, at par with the regular workmen. The dispute
about the payment of equal wages was resolved by a settlement. The
Industrial Tribunal made an award directing ONGC to regularise the
services of the workmen. This was challenged by ONGC before the
High Court in writ proceedings on the ground that the workmen had
D
been originally selected without following any selection procedure, in
violation of the decision in Umadevi (supra). The workmen claimed
that ONGC was guilty of an unfair labour practice in continuing them on
a temporary basis since 1988. The Writ Petition was dismissed by a
learned Single Judge. The Division Bench of the High Court having
E dismissed a Writ Appeal, ONGC moved this Court in order to challenge
the judgment of the High Court.
7. In appeal, one of the issues was:
“Whether jurisdiction of the Tribunal to direct the Corporation to
regularise the services of the workmen concerned in the posts is
F valid and legal?”.
Answering the above issue, this Court held that
(i) All the workmen (except for one) possessed the qualifications
required for regularisation; and
G (ii) The workmen had been employed prior to 1985 in posts through
irregular means.
8. The Court held that the Industrial Tribunal had the jurisdiction
to adjudicate upon the dispute and had rightly passed an award directing
regularisation of the services of the workmen.
H
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 669
[DR. DHANANJAYA Y CHANDRACHUD, J.]

9. The second issue which was dealt with in the judgment in PCLU A
was:
“Whether the appointment of the workmen concerned in the
services of the Corporation is irregular or illegal?”
10. On behalf of the Management, it was urged that the initial
selection of the workmen was not in accordance with the recruitment B
rules and was illegal in view of the judgment of the Constitution Bench
in Umadevi. This plea was rejected, following the decision in Ajaypal
Singh v. Haryana Warehousing Corporation11 and it was held that
the management could not deny the rights of the workmen by contending
that their initial employment was contrary to Articles 14 and 16 of the C
Constitution. The provisions contained in clause 2(ii) of the Certified
Standing Orders for contingent employees of ONGC were in issue, the
management contending that there was no right of regularisation merely
on the completion of 240 days in twelve consecutive months.
11. Clause 2 of the Certified Standing Orders provides thus : D
“2. (i) Classification of workmen
The contingent employees of the Commission shall hereafter be
classified as:
(a) Temporary, and
E
(b) Casual
(ii) A workman who has been on the rolls of the Commission and
has put in not less than 180 days of attendance in any period of 12
consecutive months shall be a temporary workman, provided that
a temporary workman who has put in not less than 240 days of F
attendance in any period of 12 consecutive months and who
possesses the minimum qualifications prescribed by Commission
may be considered for conversion as regular employee.
(iii) A workman who is neither temporary nor regular shall be
considered as casual workman.” G
12. Justice V Gopala Gowda, speaking for the two judge Bench
of this Court rejected the submission that clause 2(ii) of the Certified
Standing Orders does not confer a right to regularisation since it employs
the words “may be considered for conversion as regular employee”.
11
(2015) 6 SCC 321 H
670 SUPREME COURT REPORTS [2020] 3 S.C.R.

A This submission which was based on the language of clause 2(ii) was
rejected with the following observations:
“In any case, it is clear that the workmen concerned have
clearly completed more than 240 days of services subsequent
to the memorandum of appointment issued by the Corporation in
B the year 1988 in a period of twelve calendar months, therefore,
they are entitled for regularisation of their services into
permanent posts of the Corporation as per the Act as well as
the Certified Standing Orders of the Corporation.”
(Emphasis supplied)
C The Court further held:
“45. The legal contention urged on behalf of the Corporation that
the statutory right claimed by the workmen concerned under
Clause 2(ii) of the Certified Standing Orders of the Corporation
for regularising them in their posts as regular employees after
D rendering 240 days of service in a calendar is not an absolute
right conferred upon them and their right is only to consider their
claim. This plea of the learned Senior Counsel cannot again be
accepted by us for the reason that the Corporation is bound by
law to take its decision to regularise the services of the workmen
E concerned as regular employees as provided under Clause 2(ii)
of the Certified Standing Orders after their completion of 240
days of service in a calendar year as they have acquired valid
statutory right. This should have been positively considered by
the Corporation and granted the status of regular employees of
the Corporation for the reason that it cannot act arbitrarily and
F unreasonably deny the same especially it being a corporate body
owned by the Central Government and an instrumentality of the
State in terms of Article 12 of the Constitution and therefore, it is
governed by Part III of the Constitution.”
ONGC was accordingly directed to regularise the services of the
G workmen on their completing 240 days of service in a calendar year
under clause 2(ii) of the Certified Standing Orders, to grant regular pay
scale and absorption against regular posts. PCLU arose from an
adjudication in an industrial reference whereas the present proceedings
arise from a writ petition under Article 226.
H
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 671
[DR. DHANANJAYA Y CHANDRACHUD, J.]

13. From the above extract of the decision of this Court in PCLU, A
it is evident that clause 2(ii) of the Certified Standing Orders has been
construed to confer a right to regularisation on the completion of 240
days of service in a calendar year. While construing the provisions of
clause 2(ii), an earlier decision of a two judge Bench of this Court in Oil
and Natural Gas Corporation Limited v Engineering Mazdoor
B
Sangh12 (“Engineering Mazdoor Sangh”) was evidently not brought
to the notice of the Court. The decision in Engineering Mazdoor Sangh
construed clause 2 of the Certified Standing Orders specifically in the
context of ONGC itself. The decision related to the engagement of
seasonal workmen who were employed between November and May
of the following year for carrying out surveys for the exploration of C
petroleum. The demand of the workmen for regularisation on the
completion of 240 days was referred to Central Government Industrial
Tribunal. While the reference was pending, the Union filed a complaint
under Section 33-A alleging that ONGC was allotting work to contractors
in preference to the casual/contingent/temporary workmen resulting in
D
the alteration of the terms of service. The complaint was adjudicated
upon by the Tribunal upon which ONGC filed an application seeking
permission to terminate the service of the workmen. The Tribunal allowed
ONGC to terminate some of the workmen. The order of the Tribunal
directed ONGC to regularise the workmen as an when any vacancy
arose in a regular post, subject to their completing 240 days’ work and E
possessing the minimum qualifications. The High Court modified the
award of the Industrial Tribunal by directing that all employees who
completed 240 days and possessed the minimum qualifications would be
considered at par with regular employees. They would be given the
status of regular appointees without requiring them to compete with other
F
employees drawn from the employment exchange. In appeal, this Court
observed that regularising the services of all the seasonal workmen would
create various difficulties and hence the Tribunal had found a via media
in directing that 153 workmen who had admittedly completed 240 days
and had acquired a temporary status be regularised against vacancies
as and when such vacancies became available. Thus, this Court found G
that the directions of the Tribunal were reasonable and should prevail
instead of the directions issued by the High Court. The judgment of the
High Court was set aside and that of the Tribunal was restored.

12
(2007) 1 SCC 250 H
672 SUPREME COURT REPORTS [2020] 3 S.C.R.

A 14. Apart from the above decision which arose specifically in the
context of ONGC, it has been submitted that the decision in PCLU
would require reconsideration in view of earlier decisions of this Court
which have not been noticed.
15. In Mahatma Phule Agricultural University v. Nasik Zilla
B Sheth Kamgar Union 13 (“Mahatma Phule Agricultural
University”), a Bench of two learned judges of this Court construed
the provisions of Item 6 of Schedule IV of the Maharashtra Recognition
of Trade Unions and Prevention of Unfair Labour Practices Act 1971 14,
which is in the following terms :
C “14…
6. To employ employees as ‘badlis’, casuals or temporaries and
to continue them as such for years, with the object of depriving
them of the status and privileges of permanent employees.”
Construing the above provisions, this Court held :
D
“14…The complaint was against the Universities. The High Court
notes that as there were no posts the employees could not be
made permanent. Once it comes to the conclusion that for lack of
posts the employees could not be made permanent, how could it
then go on to hold that they were continued as “badlis”, casuals or
E temporaries with the object of depriving them of the status and
privileges of permanent employees? To be noted that the complaint
was not against the State Government. The complaint was against
the Universities. The inaction on the part of the State Government
to create posts would not mean that an unfair labour practice had
F been committed by the Universities. The reasoning given by the
High Court to conclude that the case was squarely covered by
Item 6 of Schedule IV of the MRTU & PULP Act cannot be
sustained at all and the impugned judgment has to be and is set
aside. It is however clarified that the High Court was right in
concluding that, as per the law laid down by this Court, status of
G permanency could not be granted. Thus all orders wherein
permanency has been granted (except award dated 1-4-1985 in
IT No. 27 of 1984) also stand set aside.”

13
(2001) 7 SCC 346
14
H “MRTU and PULP Act”
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 673
[DR. DHANANJAYA Y CHANDRACHUD, J.]

There could, in other words, be no regularisation in the absence A
of posts. Hence, there was no unfair labour practice.
16. In Regional Manager, State Bank of India v Raja Ram15
(“Raja Ram”), another two judge Bench of this Court construed the
provisions of Item 10 of Schedule V to the ID Act and observed:
“9…In other words, before an action can be termed as an B
unfair labour practice it would be necessary for the Labour
Court to come to a conclusion that the badlis, casuals and
temporary workmen had been continued for years as badlis,
casuals or temporary workmen, with the object of depriving
them of the status and privileges of permanent workmen. C
To this has been added the judicial gloss that artificial breaks in
the service of such workmen would not allow the employer to
avoid a charge of unfair labour practice. However, it is the
continuity of service of workmen over a period of years which is
frowned upon. Besides, it needs to be emphasised that for the
practice to amount to unfair labour practice it must be found D
that the workman had been retained on a casual or
temporary basis with the object of depriving the workman
of the status and privileges of a permanent workman. There
is no such finding in this case. Therefore, Item 10 in List I of
the Fifth Schedule to the Act cannot be said to apply at all to the E
respondent’s case and the Labour Court erred in coming to the
conclusion that the respondent was, in the circumstances, likely
to acquire the status of a permanent employee.”
(Emphasis supplied)
The above decision was followed in Regional Manager, SBI v F
Rakesh Kumar Tewari16.
17. The decision of the two judge Bench in PCLU has placed a
construction on the provisions of clause 2(ii) of the Certified Standing
Orders which prima facie does not appear to be correct. Besides, the
fact that the decision in PCLU has not noticed the earlier judgment in G
Engineering Mazdoor Sangh (supra) which pertained to ONGC’s
Certified Standing Orders, we are of the considered view that the
principles of law which have been expounded in PCLU would require
to be revisited. The decision in PCLU holds that the workmen upon
15
(2004) 8 SCC 164 H
16
(2006) 1 SCC 530: at paragraph 25, page 538
674 SUPREME COURT REPORTS [2020] 3 S.C.R.

A completion of 240 days’ service in a period of 12 calendar months “are
entitled for regularisation of their services into permanent posts
of the corporation”. The Court further held that under clause 2(ii), upon
the completion of 240 days of service in a calendar year, the workmen
have “acquired valid statutory right” and ought to have been “granted
the status of regular employees” of the corporation on the ground
B
that the corporation which is an instrumentality of the State under Article
12 cannot act arbitrarily or unreasonably. Whether the provisions of clause
2(ii) confer an absolute right to regularisation merely on the completion
of 240 days of service in a calendar year is a point which needs to be
reconsidered both having regard to the express language of the provision
C as well as the earlier decisions of this Court including that in the case of
Engineering Mazdoor Sangh.
18. The second aspect on which we are of the view that the
present appeals would require to be placed before a larger Bench for
consideration is in regard to the applicability of the principles set out and
D formulated by the Constitution Bench in Umadevi in the context of
industrial adjudication. In Umadevi, the Constitution Bench made a
distinction between appointments or selections which are merely irregular
and those which are illegal. The Court observed:
“16…We have, therefore, to keep this distinction in mind and
E proceed on the basis that only something that is irregular for want
of compliance with one of the elements in the process of selection
which does not go to the root of the process, can be regularised
and that it alone can be regularised and granting permanence of
employment is a totally different concept and cannot be equated
with regularisation.”
F
In this context, the Court held :
“43…It has also to be clarified that merely because a temporary
employee or a casual wage worker is continued for a time beyond
the term of his appointment, he would not be entitled to be absorbed
G in regular service or made permanent, merely on the strength of
such continuance, if the original appointment was not made by
following a due process of selection as envisaged by the relevant
rules. It is not open to the court to prevent regular recruitment at
the instance of temporary employees whose period of employment
has come to an end or of ad hoc employees who by the very
H nature of their appointment, do not acquire any right. The High
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 675
[DR. DHANANJAYA Y CHANDRACHUD, J.]

Courts acting under Article 226 of the Constitution, should not A
ordinarily issue directions for absorption, regularisation, or
permanent continuance unless the recruitment itself was made
regularly and in terms of the constitutional scheme.”
In paragraph 53 of the judgment, the Court made a one-time
exception, for the regularisation of the irregularly appointed persons, B
who had worked for ten years or more in duly sanctioned posts:
“53. One aspect needs to be clarified. There may be cases where
irregular appointments (not illegal appointments) as explained
in S.V. Narayanappa [(1967) 1 SCR 128 : AIR 1967 SC
1071], R.N. Nanjundappa [(1972) 1 SCC 409 : (1972) 2 SCR C
799] and B.N. Nagarajan [(1979) 4 SCC 507 : 1980 SCC (L&S)
4 : (1979) 3 SCR 937] and referred to in para 15 above, of duly
qualified persons in duly sanctioned vacant posts might have been
made and the employees have continued to work for ten years or
more but without the intervention of orders of the courts or of
tribunals. The question of regularisation of the services of such D
employees may have to be considered on merits in the light of the
principles settled by this Court in the cases abovereferred to and
in the light of this judgment. In that context, the Union of India,
the State Governments and their instrumentalities should take steps
to regularise as a one-time measure, the services of E
such irregularly appointed, who have worked for ten years or
more in duly sanctioned posts but not under cover of orders of the
courts or of tribunals and should further ensure that regular
recruitments are undertaken to fill those vacant sanctioned posts
that require to be filled up, in cases where temporary employees
or daily wagers are being now employed.” F

19. The applicability of the decision in Umadevi in the context of
labour adjudication was considered in UP Power Corporation Ltd. v
Bijli Mazdoor Sangh17 (“Bijli Mazdoor Sangh”). This Court held
that the law propounded in Umadevi was applicable also to Industrial
Tribunals and Labour Courts. The Court held: G
“6. It is true as contended by learned counsel for the respondent
that the question as regards the effect of the industrial adjudicators’
powers was not directly in issue in Umadevi (3) case [(2006) 4
SCC 1 : 2006 SCC (L&S) 753]. But the foundational logic
17
(2007) 5 SCC 755 H
676 SUPREME COURT REPORTS [2020] 3 S.C.R.

A in Umadevi (3) case [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] is
based on Article 14 of the Constitution of India. Though the
industrial adjudicator can vary the terms of the contract of the
employment, it cannot do something which is violative of Article
14. If the case is one which is covered by the concept of
regularisation, the same cannot be viewed differently.
B
7. The plea of learned counsel for the respondent that at the time
the High Court decided the matter, decision in Umadevi (3)
case [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] was not rendered
is really of no consequence. There cannot be a case for
regularisation without there being employee-employer relationship.
C As noted above the concept of regularisation is clearly linked with
Article 14 of the Constitution. However, if in a case the fact
situation is covered by what is stated in para 45 of Umadevi (3)
case [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] the industrial
adjudicator can modify the relief, but that does not dilute the
D observations made by this Court in Umadevi (3) case [(2006) 4
SCC 1 : 2006 SCC (L&S) 753] about the regularisation.”
20. Subsequently, in Maharashtra State Road Transport
Corporation v Casteribe Rajya Parivahan Karmchari Sanghatana18
(“Maharashtra SRTC”), it was held that the Industrial and Labour
E Courts under Section 30(1)(b) of the MRTU and PULP Act have wide
powers to direct the employer to take affirmative action in a case of
unfair labour practice including the power to order regularisation or
permanency. The decision in Umadevi was held to limit the scope of
the powers under Articles 32 and 226 to issue directions for regularisation
in a matter of public employment. However, the power to take affirmative
F action under Section 30(1)(b) was held to be intact even after the judgment
of the Constitution Bench. This Court held :
“35. Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] is an
authoritative pronouncement for the proposition that the Supreme
Court (Article 32) and the High Courts (Article 226) should not
G issue directions of absorption, regularisation or permanent
continuance of temporary, contractual, casual, daily wage or ad
hoc employees unless the recruitment itself was made regularly
in terms of the constitutional scheme.

18
H (2009) 8 SCC 556
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 677
[DR. DHANANJAYA Y CHANDRACHUD, J.]

36. Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] does A
not denude the Industrial and Labour Courts of their statutory
power under Section 30 read with Section 32 of the MRTU and
PULP Act to order permanency of the workers who have been
victims of unfair labour practice on the part of the employer under
Item 6 of Schedule IV where the posts on which they have been
B
working exist. Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S)
753] cannot be held to have overridden the powers of the Industrial
and Labour Courts in passing appropriate order under Section 30
of the MRTU and PULP Act, once unfair labour practice on the
part of the employer under Item 6 of Schedule IV is established.”
The Court however clarified that there is no doubt that the creation C
of posts does not lie within the domain of judicial functions “which
obviously pertains to the executive” and the status of permanency cannot
be granted by the Court where no posts exist. In Maharashtra SRTC,
the two judge Bench was construing the provisions of the MRTU and
PULP Act 1971. In holding that the creation of posts could not be directed D
by courts, the judgment in Maharashtra SRTC relied upon the decisions
in Mahatma Phule Agricultural University (supra) and State of
Maharashtra v R S Bhonde19.
21. The divergence between the decisions in Bijli Mazdoor Sangh
and Maharashtra SRTC was sought to be reconciled in a two judge E
Bench decision of this Court in Hari Nandan Prasad v Employer I/R
to Management of Food Corporation of India20 (“FCI”). Justice A
K Sikri, speaking for the two judge Bench held:
“39. On a harmonious reading of the two judgments discussed in
detail above, we are of the opinion that when there are posts F
available, in the absence of any unfair labour practice the Labour
Court would not give direction for regularisation only because a
worker has continued as daily-wage worker/ad hoc/temporary
worker for number of years. Further, if there are no posts available,
such a direction for regularisation would be impermissible. In the
aforesaid circumstances giving of direction to regularise such a G
person, only on the basis of number of years put in by such a
worker as daily-wager, etc. may amount to back door entry into
the service which is an anathema to Article 14 of the Constitution.
19
(2005) 6 SCC 751
20
(2014) 7 SCC 190 H
678 SUPREME COURT REPORTS [2020] 3 S.C.R.

A Further, such a direction would not be given when the worker
concerned does not meet the eligibility requirement of the post in
question as per the recruitment rules. However, wherever it is
found that similarly situated workmen are regularised by the
employer itself under some scheme or otherwise and the workmen
in question who have approached the Industrial/Labour Court are
B
on a par with them, direction of regularisation in such cases may
be legally justified, otherwise, non-regularisation of the left-over
workers itself would amount to invidious discrimination qua them
in such cases and would be violative of Article 14 of the
Constitution. Thus, the industrial adjudicator would be achieving
C the equality by upholding Article 14, rather than violating this
constitutional provision.”
22. In FCI, the grievance of the appellants was that in terms of a
scheme contained in a circular, similarly placed workmen had been
regularised on the completion of 240 days’ service. While dealing with
D the case of two workmen, it was found that one of them had been
dispensed with four years prior to the date of the circular as a result of
which the workman would only be entitled to monetary compensation.
On the other hand, the second workman was in service on the date of
the circular and completed 240 days of service within a few months.
The Court held that the failure to regularise his services was
E discriminatory.
23. The following propositions would emerge upon analyzing the
above decisions:
(i) Wide as they are, the powers of the Labour Court and the
F Industrial Court cannot extend to a direction to order
regularisation, where such a direction would in the context
of public employment offend the provisions contained in
Article 14 of the Constitution;
(ii) The statutory power of the Labour Court or Industrial Court
G to grant relief to workmen including the status of permanency
continues to exist in circumstances where the employer has
indulged in an unfair labour practice by not filling up permanent
posts even though such posts are available and by continuing
to employ workmen as temporary or daily wage employees
despite their performing the same work as regular workmen
H on lower wages;
OIL AND NATURAL GAS CORPORATION v. KRISHAN GOPAL 679
[DR. DHANANJAYA Y CHANDRACHUD, J.]

(iii) The power to create permanent or sanctioned posts lies A
outside the judicial domain and where no posts are available,
a direction to grant regularisation would be impermissible
merely on the basis of the number of years of service;
(iv) Where an employer has regularised similarly situated
workmen either in a scheme or otherwise, it would be open B
to workmen who have been deprived of the same benefit at
par with the workmen who have been regularised to make a
complaint before the Labour or Industrial Court, since the
deprivation of the benefit would amount to a violation of
Article 14; and
C
(v) In order to constitute an unfair labour practice under Section
2(ra) read with Item 10 of the Vth Schedule of the ID Act,
the employer should be engaging workmen as badlis,
temporaries or casuals, and continuing them for years, with
the object of depriving them of the benefits payable to
permanent workmen. D

24. The decision in PCLU needs to be revisited in order to set the
position in law which it adopts in conformity with the principles emerging
from the earlier line of precedent. More specifically, the areas on which
PCLU needs reconsideration are:
E
(i) The interpretation placed on the provisions of clause 2(ii) of
the Certified Standing Orders;
(ii) The meaning and content of an unfair labour practice under
Section 2(ra) read with Item 10 of the Vth Schedule of the
ID Act; and F
(iii) The limitations, if any, on the power of the Labour and
Industrial Courts to order regularisation in the absence of
sanctioned posts. The decision in PCLU would, in our view,
require reconsideration in view of the above decisions of this
Court and for the reasons which we have noted above.
G
25. We accordingly request the Registry to place the proceedings
before the Hon’ble Chief Justice of India so as to enable His Lordship to
consider placing this batch of appeals before an appropriate Bench.

Kalpana K. Tripathy Referred to Larger Bench. H