Holding

The earlier petition does not preclude the later petition for a different relief, so no res judicata or estoppel applies, and the Central Government must reconsider its refusal to refer the dispute to the industrial tribunal.

Summary

The Sarva Shramik Sangh, representing canteen workers employed by a contractor of Indian Oil Corporation (IOC), first filed a writ petition seeking abolition of the contract labour system under the Contract Labour (Regulation and Abolition) Act, 1970, which was dismissed for want of prosecution. It then filed a second writ petition asking the Union of India to refer the dispute to an industrial tribunal under Section 10(1)(c) of the Industrial Disputes Act, 1947, alleging that the contract between IOC and the contractor was a sham. The High Court dismissed the second petition, holding that the earlier petition barred the later one on grounds of estoppel and res judicata. The Supreme Court examined the pleadings and found that the issues, parties and reliefs in the two petitions were distinct, and the appellant had consistently maintained that the contract was sham. The Court held that no estoppel or res judicata arose and that the Central Government must reconsider its refusal to refer the dispute. Consequently, the appeal was allowed and a mandamus was issued directing the Government to make a proper reference to the industrial tribunal.

Issues considered

Whether the earlier writ petition seeking abolition of contract labour bars the later petition for reference to an industrial tribunal on the ground of res judicata or estoppel.
Whether the Central Government's refusal to refer the dispute under Section 10(1)(c) of the Industrial Disputes Act is open to judicial review and warrants a mandamus.

Legislation cited

Contract Labour (Regulation and Abolition) Act, 1970s. 10
Industrial Disputes Act, 1947s. 10(1)(c), s. 12(5)

Subjects

contract labourres judicataestoppelindustrial disputereference under s.10mandamusalternative pleasdifferent reliefsindustrial tribunal

Judgment

[2009] 6 S.C.R. 39

SARVA SHRAMIK SANGH A
v.
\ INDIAN OIL CORPORATION LTD. & ORS.
1.
(Civil Appeal No. 2423 of 2009)
APRIL 13, 2009
B
[R.V. RAVEENDRAN AND LOKESHWAR SINGH
PANTA, JJ.]

Res judicata: When the parties are different, issues are
different, reliefs are different, the question of either res C
judicata, or finality of proceedings, acquiescence or estoppel
would not arise - On facts, worker union representing the
canteen workers of the contractor engaged by company for
running its canteen filed first writ petition seeking abolition of
~ contract labour system which was dismissed for want to D
prosecution - Second writ petition filed for making reference
under s. 10 to industrial tribunal to decide whether the contract
between company and canteen contractor was sham -
Dismissed on the ground that petitioner was estopped from
taking different stand in subsequent writ petition - Held: High E
Court erred in assuming that appellant had taken inconsistent
stands in the two writ petitions - Since the prayer in writ petition
1
for abolition of contract labour was rejected, they could then
seek relief under Industrial Disputes Act - The contention of
', company that on account of the dismissal of the first petition, F
the second petition for a different relief was barred either by
principle of res judicata or by principle of estoppel is liable to
be rejected - Central Government is directed to take an
appropriate decision on the request for reference of the
dispute to Industrial adjudicator - Contract Labour (Regulation G
.-. and Abolition) Act, 1970- s.10- Industrial Disputes Act, 1947
- s.10(1)(c).

Plea - Inconsistent pleas taken by a party -
Permissibility - Held: It is impermissible to take inconsistent
39 H
40 SUPREME COURT REPORTS [2009] 6 S.C.R.

r
A plea by way of amendment thereby denying the other side,
the benefit of an admission contained in the earlier pleading
- Mutually repugnant and contradictory pleas, destructive of
each. other may also not be permitted to be urged
simultaneously by a plaintiff/petitioner - But when there Is no
B Inconsistency In the facts alleged, party Is not prohibited from
taking eltemstlve pleas available In law - Similarly, on the
same facts, different or altemstlve reliefs can also be claimed.
ThE1 appellant union represent the canteen workers
of the contractor engaged by IOC for running Its canteen.
c It filed first writ petition in High Court seeking direction .-
to hold an investigation under Section 10 of the Contract
Labour (Regulation and Abolition) Act, 1970 and make an
order abolishing the contract labour system in regard to
workmE!n in the canteen of IOC and a direction to IOC to
D absorb/regularize the services of the said workers. The
writ petition was dismissed for want to prosecution.

Thereafter, the appellant filed second writ petition
contending that the contracts between IOC and the
E canteen contractor was sham and bogus and seeking a
direction to Union of India to make a reference of the
'
dispute, raised by them in regard to the demand for
permanency of the canteen workers to the tribunal. The
High Court disposed of the said writ petition with a .
F direction to the Central Government to consider and /

'
dispose of the request for reference with a further
direction to maintain status quo in regard to concerned
workmen till disposal of the reference application.
Pursuant thereto, conciliation proceedings were held,
which failed. The Government was of the view that the
G
dispute, prima facie, was not fit for adjudication, as the ~

workmen in respect of whom the dispute was raised were
not appointed by the management of IOC but were
engaged by the contractor holding a valid and legal
contract.
H
SARVA SHRAMIK SANGH v. INDIAN OIL 41
CORPORATION LTD. & ORS.
,(

The appellant filed writ petition seeking a mandamus A
i
,to Government of India to refer the dispute raised, to the
' 'tribunal for adjudication. High Court dismissed the writ
petition on the ground that the first writ petition for
abolition of contract labour in the canteen in the
establishment of IOC, was dismissed for non-prosecution B
and attained finality and once having sought the relief of
abolition of contract labour, the appellant was estopped
from seeking any other relief by contending that the
contract was sham and not genuine.

The question for consideration in present appeal was c
whether in view of the stand taken by the appellant in first
writ petition, the appellant was estopped from taking a
different stand in the subsequent writ petition and
whether the decision of the Central Government refusing
reference required interference. D
·~

Allowing the appeal, the Court

HELD:1.1. On an examination of the pleadings in the
first and second writ petition, it was found that the issues
E
for consideration, the parties to the cause, the cause of
action and t"e reliefs claimed were all different in the two
cases. In the first petition, relief was sought for abolition
of contract labour system and for absorbing the canteen
workers as employees of IOC. In the second petition,
relief was sought under the Industrial Disputes Act, 1947 F
for making a reference under sec. 10(1)(c) to the Industrial
Tribunal to decide whether the contract between IOC and
the canteen contractor was sham and nominal and
whether the canteen workers were the direct employees
,.. of IOC. [Para 7] [49-F-H; 50-A-B] G

1.2. The assumption that the appellant had taken
inconsistent stands in the two writ petitions was not
correct. Even in the first writ petition, the appellant had
contended that though the contractors changed from H
42 SUPREME COURT REPORTS (2009] 6 S.C.R.
\

A time to time, the workers h't the canteen remained the
same with contif\uity of sel"i'ice; that IOC had mala fide
and illegally kept thf workers as contract labour in order
to keep them in a p'ermanent .state of insecurity and to
deny them the wages and 'privileges available to
B permanent workers; that IOC waS: actually controllin\g, and
supervising the canteen; and tha~ only as a camou·ftage,
the contractor was shown as running the cantetm to
create a pretence that the workmen of IOC were1 the
workers of the contractor, when In fact they were the
c employees of IOC.-.Jn short, the appeUant had contended
that the contract was sham and nominal, in the first
petition. Even in the second writ petition, the contention
was that the contract was sham and a camouflagtl to
avoid extending benefits of regular employees to the
canteen workers. Therefore, the High Court committud a
0
serious error in assuming that in the first writ petition, the
appellant had conceded that the contract between the
IOC and the canteen contractor was valid and genuine
and that in the second writ petition the appellant had
E taken a contrary stand that the contract was sham a111d a
camouflage. [Para 8] [50-B-G]

Avon Services Production Agencies (P) Ltd. v. The
lndustria/Tribunal (1979) 1 SCC 1 and Steel Authority of India
Ltd. v. National Union Waterfront Workers (2001) (7) SCC 1,
F referred to.
1.3. The''stand of the appellant and the workers was
always consistent. If the case of the workmen is that the
contract between the principal employer and the
G contractor was sham and merely a camouflage to deny
benefits to the workers, then they co•·ld raise a dispute
and approach the industrial adjudicator. The appellant
sought a reference of the dispute to the industrial
adjudicator, and when such a reference was refused,
H rightly approached the High Court by way of second writ
SARVA SHRAMIK SANGH v. INDIAN OIL 43
CORPORATION LTD. & ORS.
,(

petition. This means that the appellant had prayed for a A
.. particular relief in the first writ petition, and when such
/
relief was found to be inappropriate on the same fact
raised a dispute which was the proper remedy, and as the
dispute was not referred to the Industrial Tribunal,
approached the High Court seeking a direction to the B
Central Government for making a reference. There is thus
,. neither inconsistency nor any estoppel. [Para 9] [51-D-G]

2. The assumption that there is an absolute bar on
inconsistent pleas being taken by a party, is also not
sound. What is impermissible is taking of an inconsistent c
plea by way of amendment thereby denying the other
side, the benefit of an admission contained in the earlier
pleading. Mutually repugnant and contradictory pleas,
destructive of each other may also not be permitted to be
urged simultaneously by a plaintiff/petitioner. But when D
.\_.
there is no inconsistency in the facts alleged, a party is
not prohibited from taking alternative pleas available in
law. Similarly, on the same facts, different or alternative
reliefs can also be claimed. When the case of the workers
is that the contract was sham and nominal, they could E
seek a relief that they should be declared as the direct
employees of the principal employer; and if that
._ contention failed and it is found that the contract was
valid, then they can seek direction to the Central
Government to consider their representation for abolition F
of contract labour. Similarly where the workers contend
that the contract between principal employer and the
contractor was sham and merely a camouflage to deny
them the benefits of labour laws, and if their prayer for
relief under CLRA Act is rejected, they can then seek relief G
~ under the ID Act. The contention of IOC that on account
of the dismissal of the first petition, the second petition
for a different relief was barred either by principle of res
judicata or by principle of estoppel is liable to be rejected.
H
44 SUPREME COURT REPORTS [2009] 6 S.C.R.

A When the parties are different, issues are different, reliefs
are different, the question of either res judicata, or finality
of proceedings, acquiescence or estoppel will not arise.
[Paras 10 and 11.4) [51-G-H; 52-A-E; 55-A-B]

Steel Authority of India Ltd. v. Union of India (2006) 12
8
sec 233, held inapplicable.
3. Where, as in the instant case, the dispute is
whether the persons raising the dispute are workmen or
not, the same cannot be decided by the government in
C exercise of its administrative function under section 10(1).
When It is found that the dispute should be adjudicated
by the Industrial Tribunal and the State Government had
persistently declined to make a reference under section
10(1) despite chances given by High Court and Supreme
D Court to reconsider the matter, the court would direct the
government to make a reference of the dispute to the
appropriate industrial tribunal. [Paraa 12.8) [61-F-H; 62-A-
B]
E State of Madras v. C.P.Sarathy (1953) 4 SCR 334;
Rohtas lndustriesLtd. v. SD Agarwal AIR (1969) SC 707;
Western India Match Co. v.Western India Match Co.
Worl<ers' Union (1970) 1 SCC 225; State ofBombay v. K.P.
Krishnan (1961) 1 SCR 227; Bombay Union of Journalists
& Ors. v. The State of Bombay & Anr. (1964) 6 SCR 22 and
F Hochtif Gammon v. State of Orissa (1975) 2 SCC 649,
referred to.

4. A writ of mandamus would be issued to the
appropriate government to reconsider the refusal to make
G a reference, where (i) the refusal is on i!'relevant, irrational
or extraneous grounds; (ii) the reiusal is a result of the
appropriate government examinir.:J the merits of the
dispute and prejudging/adjudicating/determine the
dispute; (iii) the refusal is mala fide or dishonest or
H actuated by malice; (iv) the refusal ignores the material
SARVA SHRAMIK SANGH ·v. INDIAN OIL 45
CORPORATION LTD. & ORS.
available in the failure report of the Conciliation Officer or A
is not supported by any reason. 'The State Government
examined the merits of the dispute and has refused to
make the r1eference on the ground that the workers were
not the employees of IOC, when th~\ very dispute th~i
required relference was whether the workers should be B
considered as the employees of llOC. The Central
Government: is directed to reconsider the matter in the
light of the tlbservations above and take an appropriate
decision on tlhe request for reference of the dispute to the
.. Industrial adjiudicator. [Paras 13, 14 and 15) [62-B-G] c
Ram Avtar SharfT!a v. State of Haryana (1985) 3 SCC
189; Te/co Convoy Dn'vers Mazdoor Sangh v. S1'.ate of Bihar
(1989) 3 SCC 271; Su/t;an Singh v. State of Haryana 1996(2)
SCC 66 and Secretary, Indian Tea Association v. A/it Kumar
~- i
Barat 2000(3) sec 93, relied on. ' D
Case' Law Reference:
(1979) 1 sec 1 referred to Para 3 \
\
(2001) (7) sec 1 referred to · Para 9 E
(2006) 12 SCC 233 held inapplicable Paras 6, 11.3,
11.4
(1953) 4 SCR 334 referred to Para 12
F
AIR (1969) SC 707 referred to Para 12.1
(1970) 1 sec 225 referred to Para 12.2
{1961) 1 SCR 227 referred to Para 12.3
(1964) 6 SCR 22 . · · referred to Para 12.4 G
(1975) 2 sec 649 referred to Para 12.5
(1985) 3 rec 189 relied on Para 12.7, 14

H
46 SUPREME COURT REPORTS [2009] 6 S.C.R.

A (1989) 3 sec 211 relied on Para 12.8, 14
1996(2) sec 66 relied on Para 12.8
2000(3) sec 93 relied on Para 12.8

B CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2423/2009.

From the Judgment & Order dated 19.08.2006 of the High
Court of Judicature at Bombay in Writ Petition No. 1673 of
2005.
c
Colin Gonsalves, Jai Singh, Ritta and Jyoti Mendiratta for
the Appellant.

J.P. Cama and Gopal Singh for the Respondents.

D The Judgment of the Court was delivered by

R.V. RAVEENDRAN, J. 1. The appellant union represents
the canteen workers of the contractor engaged by Indian Oil
Corporation Ltd. ('IOC' for short) for running its canteen at its
E Western Region Marketing Division at Mumbai. The appellant
union filed W.P.No.1267/1999 in the Bombay High Court on
behalf of the said workers seeking the following reliefs: (i) a
direction to the Central Advisory Contract Labour Board and
Union of India to hold an investigation under section 10 of the
F Contract Labour (Regulation and Abolition) Act, 1970 ('CLRA
Act' for short), on its application dated 29.12.1998 and make
an order abolishing the contract labour system in regard to
workmen in the canteen of Marketing division of IOC; and (b)
a direction to IOC to absorb/regularize the services of the said
G workers. The writ petition was dismissed for want of
prosecution on 11.11.2003.

2. Thereafter the appellant again approached the High
Court in W.P.No.853/2004 contending that the contracts
between IOC and the canteen contractor was sham and bogus
H
SARVA SHRAMIK SANGH v. INDIAN OIL 47
. ' CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.]
>I and seeking a direction to the Union of India to make a A
reference of the dispute raised by them in regard to the
demand for permanency of the canteen workers to the Industrial
Tribunal. The High Court vide order dated 22.4.2004 disposed
of the said writ petition with a direction to the Central
Government to consider and dispose of the request for B
reference with a further direction to maintain status quo in
regard to concerned workmen till disposal of the reference
application. In pursuance of it conciliation proceedings were
~1eld and the Assistant Labour Commissioner (Central)-111,
Mumbai, sent a Failure of Conciliation Report dated 2.9.2004, c
Government of India by order dated. 21.12.2004 refused to
make a reference of the dispute under section 10(1) of the
~
Industrial Disputes Act, 1947 ('ID Act' for short). The Labour
Ministry of the Government of India was of the view that the
dispute, prima facie, was not fit for adjudication, as "the
D
workmen in respect of whom the dispute was raised were not
I,. appointed by the management of IOC but were engaged by the
contractor holding a valid and legal contract.·

3. The said order was challenged by the appellant in
W.P.No. 1673/2005 seeking a manda_mus to the Government E
of India to refer the dispute raised, to the Industrial Tribunal for
adjudication. The appellant contended that the central
government had usurped the power and function of the Industrial
J.
Tribunal, by deciding the very issue that required to be referred
to and decided by the Tribunal. The said writ petition was F
dismissed by the High Court by the impugned order dated
19.8.2006 on the following two grounds : (i) The appellant had
earlier filed WP No.126711999 for abolition of contract labour
in the canteen in the establishment of IOC. The said earlier
petition (W.P.No.1267/1999) was dismissed on 11.11.2003 for G
non-prosecution and attained finality; and once having sought
the relief of abolition of contract labour, the appellant was
estopped from seeking any other relief by contending that the
contract was sham and not genuine. (ii) The order dated
21.12.2004 of the appropriate government did not suffer from H
A
48 SUPREME COURT REPORTS [2009] 6 S.C.R.

any infirmity or arbitrariness, when examined with reference to
-
the principles laid down by this Court in Avon Services
Production Agencies (P) Ltd. v. The Industrial Tribunal [1979
(1) SCC 1]. The said order is challenged in this appeal by
special leave.
B
4. The contentions urged by the parties give rise to the
following questions for determination :

(i) whether in view of the stand taken by the appellant
in WP No.1267 of 1999 , the appellant was
c estopped from taking a different stand in the
subsequent writ petition {yl/P 1673/2005).

(ii) whether the decision of the central government
refusing reference requires interference.
D Re : Question (i)

5. The appellant submits that the contract labour can take
the plea that the contract between the principal employer and
the contractor is sham and bogus and that they are, in law, the
E employees of IOC and not of the contractor; and that
alternatively they can plead without prejudice to the first plea,
that assuming the contract is genuine, the contract labour
system should be abolished under Section 10 of the CLRA Act.
On the same principle, the contract labour can, on the plea that ..
F the contract between principal employer and the contractor is
sham and nominal, first claim the relief that contract labour
system should be abolished and they should be absorbed; and
if such relief is refused or found to be inappropriate, then seek
a declaration that they are really the direct employees of the
G
principal employer.

6. On the other hand, the first respondent-IOC contended
that the appellant cannot be permitted to take contradictory and
inconsistent stands. It is submitted that the prayer in the first
writ petition was on the assumption that there was a valid
H contract between IOC and the canteen contractor and the
SARVA SHRAMIK SANGH v. INDIAN OIL 49
CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.]

workers were in fact the employees of the contractor, and that A

- the contract labour system for the canteen in the establishment
of IOC (marketing department) should be abolished under the
CLRA Act and that after such abolition, the workers should be
absorbed as employees of the IOC. It is contended that having
taken such a specific stand in the first petition, the appellant B
cannot in the second petition take a plea that the contract
entered between the IOC and the canteen contractor was sham
and bogus and that the canteen workers were really the
employees of the IOC. Strong reliance was placed on the
following observations of this Court in Steel Authority of India c
Ltd. v. Union of India [2006 (12) SCC 233, for short referred
to 'SAIL-II']:

"The workmen whether before the Labour Court or in writ
proceedings, were represented by the same union. A
trade union registered under the Trade Unions Act is D
entitled to espouse the cause of the workmen. A definite
stand was taken by the employees that they had been
working under the contractors. It would, thus, in our opinion,
not lie in their mouth to take a contradictory and
inconsistent plea that they were also the workmen of the E
principle employer. To raise such a mutually destructive
plea is impermissible in law. Such mutually destructive
plea, in our opinion, should not be allowed to be raised
even in an industrial adjudication. Common law principles
of estoppel, waiver and acquiescence are applicable in an F
industrial adjudication."

7. On an examination of the pleadings in W.P.No.1267/
1999 and W.P.No.1673/2005, we find that the issues for
consideration, the parties to the cause, the cause of action and
the reliefs claimed were all different in the two cases. In the first G
-t petition, relief was sought under the Contract Labour
(Regulation & Abolition) Act, 1970 for abolition of contract
labour system in the operation of canteen in the marketing
establishment of IOC and for absorbing the canteen workers
H
50 SUPREME COURT REPORTS [2009] 6 S.C.R.
'
A as employees of IOC. In the second petition, relief was sought ).,

under the Industrial Disputes Act, 1947 for making a reference
under sec. 10(1)(c) to the Industrial Tribunal to decide whether
...
the contract between IOC and the canteen.. contractor was
sham, nominal and a mere camouflage to avoid extension of
B labour law benefits to the workers in question, and whether the
canteen workers were the direct employees of IOC.

8. The assumption that the appellant had taken
inconsistent stands in the two writ petitions is not correct. Even
...
in the first writ petition, the appellant had contended that though
c the contractors changed from time to time, the workers in the
canteen remained the same with continuity of service; that IOC
..
had mala fide and illegally kept the workers as contract labour
in order to keep them in a permanent state of insecurity and to
deny them the wages and privileges available to permanent
D workers; that IOC was actually controlling, and supervising the
canteen; and that only as a camouflage, the contractor was ..
sbown as running the canteen to create a pretence that the
workmen of IOC were the workers of the contractor, when in
fact they were the employees of IOC. In short, the appellant had
E contended that the contract was sham and nominal, in the first
petition. Even in the second writ petition 0fVP No. 1673/2005)
the contention was that the contract was sham and a
camouflage to avoid extending benefits of regular employees
to the canteen workers. Therefore, the High Court committed .
F a serious error in assuming that in the first writ petition, the ,
appellant had conceded that the contract between the IOC and
the canteen contractor was valid and genuine and that in the
second writ petition the appellant had taken a contrary stand
that the contract was sham and a camouflage.
G 9. The stand of the appellant and the workers was always
consistent. But before the decision of a Constitution Bench of ..
this Court in Steel Authority of India Ltd. v. National Union
Waterfront Worker.s (2001 (7) SCC 1, for short referred to as
'SAIL-I), it was thought that the appropriate relief available was
H
SARVA SHRAMIK SANGH v. INDIAN OIL 51
CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.]
II
to seek an investigation and abolition of contract labour under A
, the CLRA Act and consequently seek absorption. Therefore the
prayer was made with reference to the CLRA Act in the first
petition. In SAIL-I rendered on 30.8.2001, this Court held that
even if there was an order under section 10 of CLRA Act
prohibiting contract labour in any process or operation, there B
would be no automatic absorption of the contract labour by the
prinr;ipal employer. It was also held that it is always open to the
-~ contract labour to urge that the contract was sham and nominal
by raising an industrial dispute under the ID Act and such
dispute will have to be decided by the industrial adjudicator and c
,' not by the High Court; and if on enquiry, the industrial
adjudicator found that the contract was sham and merely a
camouflage for denying labour law benefits to the workers in
question, it could declare so and hold that the contract labour
were really the direct employees of the principal employer.
D
When it became clear after the constitution bench decision in
SAIL-I that if the case of the workmen is that the contract
between the principal employer and the contractor was sham .
and merely a camouflage to deny benefits to the workers, then

~
they could raise a dispute and approach the industrial
adjudicator, the appellant sought a reference of the dispute to E
0() the industrial adjudicator, and when such a reference was
refused, rightly approached the High Court by way of second
fxJ writ petition. This means that the appellant had prayed for a
~
4-
particular relief in the first writ petition, and when such relief was
,.. found to be inappropriate and the law was clarified in SAIL-I, F
0 on the same fact raised a dispute which was the proper
remedy, and as the dispute was not referred to the Industrial
Tribunal, approached the High Court seeking a direction to the
Central Government for making a reference. There is thus
neither inconsistency nor any estoppel. G

10. The assumption that there is an absolute bar on
. inconsistent pleas being taken by a party, is also not sound.
What is impermissible is taking of an inconsistent plea by way
of amendment thereby denying the other side, the benefit of an H
~
52 SUPREME COURT REPORTS [2009] 6 S.C.R.

).
A admission contained in the earlier pleading. Mutually repugnant
and contradictory pleas, destructive of each other may also not '
be permittEld to be urged simultaneously by a plaintiff/petitioner.
But when there is no inconsistency in the facts alleged, a party
is not prohibited from taking alternative pleas available in law.
B Similarly, on the same facts, different or alternative reliefs can . , .
also be claimed. When the case of the workers is that the
contract was sham and nominal, they could seek a relief that
they should be declared as the direct employees of the principal
employer; and if that contention failed and it is found that the
c contract was valid, then they can seek issue a direction to the
Central Government to consider their representation for
abolition of contract labour. Similarly where the workers
-
contend that the contract between principal employer and the
contractor was sham and merely a camouflage to deny them
the benefits of labour laws, and if their prayer for relief under
D
CLRA Act is rejected, they can then seek relief under the ID .,;.
Act. The contention of IOC that on account of the dismissal of
the first petition, the second petition for a different relief was
barred either by principle of res judicata or by principle of
estoppel is liable to be rejected.
E
11. We will next consider whether the decision in SAIL-II
relied on by the respondents, is in any way applicable. That
decision related to a dispute raised by the contract labour
employed by VISL (an unit of SAIL) for prohibition of .
F employment of contract labour in the process/operation in which ""
they were employed and they should be absorbed as regular
permanent employees of VISL. The state government referred
the said dispute to the Tribunal under section 10(1)(c) of the
ID Act. Before the Labour Court, VISL contended that as the
G matter related to regulation and abolition of contract labour,
governed by the provisions of the CLRA Act, there could be
no reference of the dispute to the Labour Court for adjudication
under section 10(1)(c) of the ID Act. It was also submitted that
as the state government had not issued any notification
prohibiting employment of contract labour in terms of section .,..
H
SARVA SHRAMIK SANGH v. INDIAN OIL 53
CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.]

" 10 of the CLRA Act, the contract labour did not have a legal A
h
right to claim absorption.
(11.1.)At that stage, presumably to get over the said
objection regarding maintainability, the workmen filed an
additional claim statement alleging that the contract entered into
B
between VISL and the contractor was sham and bogus and
they should be deemed to be the direct employees of the
management. The Labour Court held that the dispute referred
-· was whether the contract workers who were employed in the
particular nature of contract work were justified in demanding
absorption as regular employees; that the said dispute pre- c
supposed that the employees were contract workers under the
contractors and the question therefore was whether the contract
labour system should be abolished and contract workers had
to be absorbed by the principal employer; that the employees
who sought absorption by VISL were contract labour was D
evident from the averments made in the claim statement; and
that the only remedy available to them was to file writ petition
seeking a direction to the central government to take a decision
under section 10 of CLRA Act to prohibit employment of
contract labour. The Labour Court held that the question under E
reference related to abolition of contract labour and as the said
question could be decided only by appropriate Government
under section 10 of the CLRA Act, the dispute was not
. maintainable under ID Act. Therefore the Labour Court made
an award holding that the reference was not maintainable. F." .

(11.2.) The said award of the Labour Court was
challenged in the High Court. A learned single Judge allowed
the writ petition and directed the Union of India to treat the writ
petition as a petition submitted by the Union raising an industrial
dispute in terms of section 2(k) read with section 12(1) of the G
ID Act as also under the provisions of CLRA Act. The learned
Judge further directed the central government to refer the said
dispute to the Industrial Tribunal. The appeal filed against the
said judgment of the learned Single Judge was dismissed by
.. a division bench. Aggrieved thereby SAIL approached this H
'
54 SUPREME COURT REPORTS [2009) 6 S.C.R.

--·
"'
A Court It is in that background this Court held that the workmen
having taken a definite stand that they were working under the
contractors, and as the dispute that was referred was one which
--
arose under the CLRA Act, the workmen could not, by
amending the claim statement filed before the Labour Court,
B take a contradictory and inconsistent plea that the contract
between VISL and the contractor was sham and bogus and
they were the direct employees of VISL. This Court observed
'>-
that it was impermissible to raise such mutually destructive
pleas in law, having regard to the principles of estoppel, waiver
c and acquiescence which were also applicable in industrial
adjudication.
(11.3.) We have referred to the factual situation in detail
to dernonstrate that the said observations made in the context
of the peculiar facts of that case, where the reference by the .
D state government under the ID Act was in regard to a specific
,,.
dispute that they were employees of the contractor and that
after prohibiting the contract labour system under section 10
of the CLRA Act, they should be absorbed as direct employees
of VISL. This court therefore held that in such a reference under
E ID Act, raising a contention that the contract between VISL and
the contractor was bogus and sham and that they were direct
employees of principal employer contradicted the case on the
basis of which the reference was sought and reference was
made, and the two contentions being mutually destructive, such ..
F a plea which would destroy the very reference could not be
permitted to be raised. The decision in SAIL-II is therefore of
no assistance to the respondents. What was held to be
impermissible in SAIL-II was raising inconsistent and mutually
destructive pleas in the same proceedings. It does not bar a
G particular relief being sought in a writ petition, and when it is
found that such a relief was inappropriate, then seeking
appropriate relief in a different proceedings.
(11.4.) The facts are completely different here. The issue
in the first writ petition was with reference to section 10 of
H CLRA Act The issue in the second petition was whether the
SARVA SHRAMIK SANGH v. INDIAN OIL 55
CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.]
"
dispute (relating to their claim that they were the direct A
employees of IOC) should be referred under section 10(1)(c)
of the ID Act. The decision in SAIL II will not therefore apply.
When the parties are different, issues are different, reliefs are
different, the question of either res judicata, or finality of
proceedings, acquiescence or estoppel will not arise. B
Re : Question (ii)

12. It is true that making a reference under section 10(1)
of the ID Act is within the discretion of the appropriate
government. Referring to the unamended section 10(1) of ID c
Act this court in State of Madras v. C.P.Sarathy [1953 (4) SCR
334], laid down the following principles:
•.
(i) The government should satisfy itself, on the facts
and circumstances brought to its notice, in its D
" subjective opinion that an 'industrial dispute' exists
or is 'apprehended.

(ii) The factual existence of a dispute or its
apprehension and the expediency of making
reference are matters entirely for the government to E
decide.

1.-
(iii) The order making a reference is an administrative
- . •-"" act and it is not a judicial or a quasi-judicial ~ct. ·-··--
.·.--~·= """"~~- -
' F
(iv) The order of reference passed by the government
cannot be examined by the High Court in its
i jurisdiction under art 226 of the Constitution to see
if the government had material before it to support
the conclusion that the dispute existed or was
G
.j- apprehended .

(12.1.) The opening words of section 10 of ID Act "if any
industrial dispute exists or is apprehended the appropriate
government may" were replaced by the words "where the
appropriate government is of.the opinion that any industrial H
56 SUPREME COURT REPORTS [2009] 6 S.C.R
;.

A dispute exists or is apprehended it may at any time" by Act 18
of 1952. The issue was thereafter again considered in Rohtas
Industries Ltd. v. SD Agarwal [AIR 1969 SC 707]. After referring
to the propositions in Sarathy, this Court held :

"This interpretation of s 10(1) is based on the language of
B
that provision as well as the purpose for which the power
in question was given and the effect of a reference. That
._
decision cannot be considered as an authority for the
proposition that whenever a provision of law confers
certain power on an authority on its forming a certain
c opinion on the basis of certain facts, the courts are
precluded from examining whether the relevant facts on
the basis of which the opinion is formed had in fact
existed."
(emphasis supplied)
D ,l.

(12.2.) The amended section 10 was considered in
Western India Match Co. v. Western India Match Co. Workers'
Union [1970 (1) sec 225]. This court, again, after referring to
the observation in Sarathy that the order of the government is
E an administrative function, observed thus :

"....... the government cannot go into the merits of the
dispute, its function being only to refer such a dispute for
~
adjudication so that the industrial relations between the
employer and the employees may not continue to remain ,-
F
disturbed, and the dispute may be resolved through a
judicial process as speedily as possible."
(12.3.) In State of Bombay v. K.P. Krishnan [1961] 1 SCR
227, this c:ourt referred to the scope of section 10(1) thus :
G
"Section 10(1) provides that where the appropriate
Government is of opinion that any industrial dispute exists
or is apprehended, it may at any time by order in writing
refer the dispute to one or the other authority specified in
H clauses (a) to (d). This section is of basic importance in
SARVA SHRAMIK SANGH v. INDIAN OIL 57
CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.]
" the scheme of the Act. It shows that the main object of the A
Act is to provide for cheap and expeditious machinery for
the decision of all industrial disputes by referring them to
adjudication, and thus avoid industrial conflict resulting from
frequent lock-outs and strikes. It is with that object that
reference is contemplated not only in regard to existing B
industrial disputes but also in respect of disputes, which
may be apprehended. This section confers wide and even
absolute discretion on the Government either to refer or
to refuse to refer an industrial dispute as therein provided.
Naturally this wide discretion has to be exercised by the c
Government bona fide and on a consideration of relevant
and material facts."

This court clarified that the writ court can direct the government
to reconsider whether a reference should be made or not after
leaving out the relevant and extraneous considerations. D

"' (12.4.) In Bombay Union of Journalists & Ors. v. The
State of Bombay & Anr. [1964] 6 SCR 22, this court once
again discussed the scheme of reference and observed:
E
"... section 10( 1) confers discretion on the appropriate
Government either to refer the dispute, or not to refer it,
for industrial adjudication according as it is of the opinion
that it is expedient to do so or not ... in entertaining an
~·
application for a writ of mandamus against an order made
F
by the appropriate Government under s. 10(1) read with
s. 12(5), the Court is not sitting in appeal over the order
and is not entitled to consider the propriety or the
satisfactory character of the reah1Jns given by the said
Government. ... It is no doubt 1~.9sirable that the party
concerned should be told clearly ~nd precisely the reasons G
why no reference is made, because the object of s. 12(5)
appears to be to require the appropriate Government to
state its reason for refusing to make a reference, so that
the reasons should stand public scrutiny; but that does not
mean that a party challenging the validity of the H
•
58 SUPREME COURT REPORTS [2009] 6 S.C.R.

A Government's decision not to make a reference can
require the court in writ proceedings to examine the
propriety or correctness of the said reasons."

This court however made it clear that if the appropriate
government refuses to make a reference for irrelevant
8
considerations, on extraneous grounds or acts mala fide, a
party would be entitled to move the High Court for a writ of
mandamus.

(12.5.) This position was reiterated in Hochtif Gammon
C v. State of Orissa [1975 (2) SCC 649]. In Hochtif Gammon, this
Court observed thus:

"The executive have to reach their decisions by taking into
account relevant considerations. They should not refuse to
D consider relevant matter nor should take into account wholly
irrelevant or extraneous consideration. They should not
misdirect themselves on a point of law. Only such a
decision will be lawful. The courts have power to see that
the executive acts lawfully. It is no answer to the exercise
of that power to say that the executive acted bona fide nor
E
that they have bestowed painstaking consideration. They
cannot avoid scrutiny by courts by failing to give reasons.
If they give reasons that they are not good reasons, the
courts can direct them to reconsider the matter in the light
of relevant matters, though the propriety, adequacy or
F satisfactory character of those reasons may not be open
to judicial scrutiny. Even if the executive considers it
inexpedient to exercise their powers they should state their
reasons and there must be material to show that they have
considered all the relevant facts."
G
(12.6.) Thereafter the matter came up for consideration in
Avon Services (supra) relied upon by the High Court. In Avon i-
Services, this Court reiterated the principles thus:
"Section 10(1) confers a discretionary power and this
H
•
SARVA SHRAMIK SANGH v. INDIAN OIL 59
CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.)
., discretionary power can be exercised on being satisfied
that an industrial dispute exists or is apprehended. There
A

must be some material before the Government on the
basis of which it forms an opinion that an industrial dispute
exists or is apprehended. The power conferred on the
appropriate Government is an administrative power and B
the action of the Government in making the reference is
an administrative act. The formation of an opinion as to
the factual existence of an industrial dispute as a
..;
-.
preliminary step to the discharge of its function does not
make it any the less administrative in character. Thus the c
jurisdictional facts on which the appropriate Government
may act are the formation of an opinion that an industrial
dispute exists or is apprehended which undoubtedly is a
subjective one, the next step of making reference is an
administrative act. The adequacy or sufficiency of the
D
material on which the opinion was formed is beyond the
pale of judicial scrutiny. If the action of the Government in
making the reference is impugned by a party it would be
open to such a party to show that what was referred was
not an industrial dispute and that the Tribunal had no
jurisdiction to make the Award but if the dispute was an E
industrial dispute, its factual existence and the expediency
of making a reference in the circumstances of a particular
case are matters entirely for Government to decide upon,
and it will not be competent for the Court to hold the
reference bad and quash the proceedings for want of F
jurisdiction merely because there was, in its opinion, no
material before Government on which it could have come
to an affirmative conclusion on those matters.

Merely because the government rejects a request for a G
reference or declines to make a reference, it cannot be
~· said that the industrial dispute has ceased to exist.. .... The
industrial dispute may nonetheless continue to remain in
existence and if at a subsequent stage the appropriate
government is satisfied that in the interest of industrial H
60 SUPREME COURT REPORTS [2009) 6 S.C.R.

A peace and for promoting industrial harmony it is desirable
to make a reference, the appropriate government does
not lack power to do so under s 10(1), nor is it precluded
from making the reference on the only ground that on an
earlier occasion it had declined to make the reference."
B
(12.7.) In Ram Avtar Sharma v. State of Haryana [1985
(3) sec 189), this Court considered a refusal by the
government as it found that the services of the employee were
terminated only after charges against him were proved in a
domestic enquiry, that this Court held that a clear case of grant
C of writ of mandamus was made out on the ground of the
following reasoning:

"The assumption underlying the reasons assigned by the
Government are that the enquiry was consistent with the
D rules and the standing orders, that it was fair and just and
that there was unbiased determination and the punishment
was commensurate with the gravity of the misconduct. ...... .
The reasons given by the Government would show that the
Government examined the relevant papers of enquiry and
E the Government was satisfied that it was legally valid and
that there was sufficient and adequate evidence to hold the
charges proved. It would further appeM that the
Government was satisfied that the enquiry was not biased
against the workmen and the punishment was
F commensurate with the gravity of the misconduct charged.
All these relevant and vital aspects have to be examined
by the Industrial Tribunal while adjudicating upon the
reference made to it. In other words, the reasons given by
the Government would tantamount to adjudication which is
impermissible. That is the function of the Tribunal and the
G
Government cannot arrogate to itself that function.
Therefore if the grounds on which or the reasons for which
the Government declined to make a reference under
Section 10 are irrelevant, extraneous or not germane to
the determination, it is well settled that the party aggrieved
H thereby would be entitled 10 move the Court for a writ of
- SARVA SHRAMIK SANGH v. INDIAN OIL 61
CORPORATION LTD. & ORS. [R.V. RAVEENDRAN, J.]

mandamus. It is equally well settled that where the A
Government purports to give reasons which tantamount to
adjudication and refuses to make a reference, the
appropriate Government could be said to have acted on
extraneous, irrelevant grounds or grounds not germane to
the determination and a writ of mandamus would lie calling 8
upon the Government to reconsider its decision."

" (12.8.) In Te/co Convoy Drivers Mazdoor Sangh v. State
of Bihar [1989 (3) SCC 271 ], this Court held that while
exercising power under section 10(1) of the Act, the function
of the appropriate government is an administrative function and c
not a judicial or quasi-judicial function. In performing this
administrative function the government cannot delve into the
merits of the dispute and take upon itself the determination of
the lis, which would certainly be in excess of the power conferred
"'- on it by section 10 of the Act. However, there may be D
exceptional cases in which the state government may, on a
proper examination of the demand, come to a conclusion that
the demands are either perverse or frivolous and do not merit
a reference. But the government should be slow to attempt an
examination of the demand with a view to declining reference E
and courts will always be vigilant whenever the government
attempts to usurp the powers of the Tribunal for adjudication of
lo-- valid disputes, and to allow the government to do so would be
" to render section 10 and section 12(5) of the Act nugatory.
',)\/here, as in the instant case, the dispute is whether the F
persons raising the dispute are workmen or not, the same
cannot be decided by the government in exercise of its
administrative function under section 10(1). When the dispute
was whether the convoy drivers were employees or workmen
,+. of TELCO, that is to say, whether there was relationship of G
employer and employees between TELCO and the convoy
drivers, the Deputy Labour Commissioner and/or the state
government was not justified in holding that the convoy drivers
were not workmen and accordingly, no reference could be
made. When it is found that the dispute should be adjudicated H
62 SUPREME COURT REPORTS [2009] 6 S.C.R.

A by the Industrial Tribunal and the state government had
persistently declined to make a reference under section 10(1) ·
despite chances given by High Court and Supreme Court to
reconsider the matter, the court would direct the government
to make a reference of the dispute to the appropriate industrial
B tribunal. The principles were reiterated in Sultan Singh v. State
of Haryana [1996 (2) SCC 66 and Secretary, Indian Tea
Association v. Ajit Kumar Barat [2000 (3) SCC 93].
13. Thus it can safely be concluded that a writ of
mandamus would be issued to the appropriate government to
C reconsider the refusal to make a reference, where (i) the refusal
is on irrelevant, irrational or extraneous grounds; (ii) the refusal
is a result of the appropriate government examining the merits
of the dispute and prejudging/adjudicating/determine the
dispute; (iii) the refusal is mala fide or dishonest or actuated
D by malice; (iv) the refusal ignores the material available in the .
failure report of the Ccnciliation Officer or is not supported by
any reason.

14 This case is squarely covered by the decisions in Ram
E Avtar Shanna and Te/co Convoy Drivers Mazdoor Sangh. The
state government has examined the merits of the dispute and
has refused to make the reference on the ground that the
workers wem not the employees of IOC, when the very dispute
that required reference was whether the workers should be
F considered as the employees of IOC.
15. In view of the above we allow this appeal and direct
the Central Government to reconsider the matter in the light of
the observations above and take an appropriate decision on
the request for reference of the dispute to the Industrial
G adjudicator. As and when the state government makes the
reference, it is for the Industrial Tribunal to consider the dispute
on merits, on the basis of materials placed before it,
uninfluenced by the observations of the High Court or this Court.

H D.G. Appeal allowed.