1. This Writ Petition has been filed to quash the order of the first respondent in Na.Ka.No.E4154/2010, dated 11.06.2012. The impugned order is passed on the petition which has raised preliminary objections before the 2nd respondent.

2. Heard Mr.Anand Gopalan, learned counsel appearing for the Petitioner/corporation, Mr.P.Thambidurai, learned Government Advocate for the 1 st respondent and Ms.D.Geetha, learned Counsel appearing for the respondent Nos. 2, 6 to 10 and 13 to 19. Perused the material documents available on record.

3. The facts as stated in the affidavit is that LPG plant was commissioned in the year 1988. The petitioner corporation is following a consistent policy by fixing permanent workmen for attending regular operations and the contract labours for attending sundry works. The LPG plant has been registered as a “Principal Employer”, under the Contract Labour (Regulation and Abolition) Act (hereinafter referred as “the Act”). It is also engaging Contractors who were deploying 20 workmen to be employed as “contract workmen” and the said Contractors has also taken out license under the provisions of the said Act. The respondent Nos.3 to 5 are the “Licensed Contractors” and the respondent Nos.6 to 19 are the “Contract Labourers” engaged by the respondents 3 to 5. The 2 nd respondent is the Union representing the respondents 6 to 19. The Union is well aware that the respondents 3 to 5 were the employers of the respondents 6 to 19 and that is why the respondents 3 to 5 are impleaded as parties in the writ petition. The 2nd respondent Union has taken up the cause of the respondents 6 to 19 and few other Contract Labourers to be absorbed in the regular employment of the petitioner’s corporation and moved the Authority under the said Act seeking abolition of contract labour and for their absorption by issue of notification under Section 10(1) of the said Act. The issue was considered by the Advisory Board and a report is submitted that the specific jobs attended to by the contractors need not be abolished. Aggrieved over the Union has raised Industrial Dispute on the ground that the contract is sham and nominal and the same is under the consideration of the government whether to refer the case for adjudication. Moreover, the matter is still subject matter of writ appeal. Even then another attempt was made by the 2nd respondent Union to seeking permanency under the Tamil Nadu Industrial Establishment (Conferment of Permanent Status of Workmen) Act 1981 (hereinafter called as the “Permanency Act”). But the said Permanency Act under Rule 6, a form has been prescribed wherein under column 4, the categories of workmen enumerated are temporary, causal, badly or apprentice (other than those covered under the Apprentice Act). Since the respondents 6 to 19 comes under the category of “contract labourers”, they cannot claim permanency.

4. The contention of the petitioner is that the petitioner corporation was formed pursuant to the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 and is under the direct control of the Ministry of Petroleum and Natural Gas. The petitioner can appoint persons only against sanctioned posts by following communal reservation policy. The employees whose appointment is irregular, cannot seek permanent. Moreover, Permanency Act, would not override the communal reservation policy of the Government. The respondents admittedly were not directly engaged by the petitioner corporation. Merely, because a person worked as a contract labourer for 480 days in two calendar years, would not get automatic privilege for employment, over-riding the communal reservation policy of the Government, as mandated under the Constitution and hence the Permanency Act is not applicable to the petitioner’s establishment. In support of their contention, the petitioner has relied on the following Judgments:

1. L.Justine V. Registrar of Co-operative Societies, Chennai (2003) VII LLN 315.

2. Uma Rani V. Registrar of Co-operative Societies, Chennai (2004) VII SCC 112.

3. Tamil Nadu Slum Clearance Board Vs. Tamil Nadu Kudisai Matru Varia Thupparavu Paniyalargal Sangam & anr. (2020) I LLJ 204 (Mad).

4. Tamil Nadu Electricity Board, Chennai Vs. Inspector of Labour, Nandhavanam 2020(1) LLJ 718 (Mad).

5. Oil and Natural Gas Corporation V. Krishnan Gopal, 2020 SCC Online SC 150.

5. The petitioner has also filed an additional affidavit stating that the following 14 persons are still working with various Contractors. The petitioner has furnished the details as mentioned below:

6. The remaining five persons are currently not working with any Contractors and the last date of their working with Contractor is furnished as hereunder:

7. The further contention of the petitioner Corporation is that they have complied the conditions under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970. The names of the Contractors are reflected in its Registration under the Act and also all the Contractors, who have employed more than 20 persons have obtained license under the Act. All the employees who are employee under the contractors are covered under the Employee State Insurance Act, 1948 as well as Employees Provident Funds and Miscellaneous Provisions Act, 1961. Further, as a principal employer, this petitioner has to ensure that the contract workers are paid above the minimum wages, bonus etc., by the Contractors. In fact, the Union, which is espousing the cause of the respondents, in which, the respondents are members, has also signed the Settlements under Section 12(3) of the Industrial Disputes Act, 1947 with the respective Contractors over a period of time. These would establish that the Contractors are not sham and nominal. Therefore, the petitioner prays to allow this writ petition and set aside the order passed by the 1st respondent.

8. The Learned Counsel appearing for the respondents 6 to 19 have submitted that the workers are engaged for Loading and Unloading, cylinder handling, housing keeping, cylinder stay plate bend etc. and they are engaged since 1992 onwards i.e. more than 13 years (as on 2005). The petitioner corporation is the principle employer and the respondents 3 to 5 are contractors. During the thirteen years the contractors may change but the contract workers remain the same. Hence the aforesaid facts would indicate that the work is in perennial nature and continuous and everlasting one as stated under section 10(2) the Act. Originally the said work was carried out by the regular employees, but for the past 15 years the same is carried out by the contract workers and they are paid meager wages, thereby exploiting them. Hence the respondents 3 to 5 are unnecessary between the principle employer and the contract workers and hence the respondents 6 to 19 prays for dismissing the present writ petition.

9. The worker had filed a petition under Permanency Act and has stated that the contractor is making salary payments and extracting work from the Labourers on behalf of principle employer and has maintained statutory records on behalf of the principle employer. The contractor though named as a Contractor has unnecessary intermediates and the expenses of the contractor is spurious and commissioned. The principle employer is solely running the LPG Bottling Plant and its operation was same by engaged permanent labourers as well as other labourers like, the petitioner. Thus, the petitioner should be treated as a workman of the principle employer. The contract labourers were engaged for loading and unloading section of the principle employer and was given wages of Rs.165/- per day, payable once in a month. Besides, incentives also paid on behalf of the principle employer. The contractor labourers has rendered continuous uninterrupted service as envisaged under 21(d) of Industrial Disputes Act. The Provident Fund and ESI contributions are recovered from the salary of the petitioner and are paid by the principle employer and sometimes it is by the contractors. The petitioner has completed 480 days of work, in two calendar years from the date of employment and hence he is eligible to be conferred with the permanency. Hence, the respondent Nos.6 to 19 submitted that they are entitled to permanency.

10. The Learned Counsel appearing for the petitioner submitted that the Permanency Act is not applicable to the petitioner Corporation, since it comes under the direct control of the Ministry of Petroleum and Natural Gas, even though the petitioner is a limited company. In such circumstances, the petitioner ought to be treated as Government concern and the Act is not applicable to the Government Departments. The said contention cannot be entertained, since Bharat Petroleum is registered under the Companies Act. Even though, it is coming under the direct control of the Ministry of Petroleum and Natural Gas, it is Government undertaking, but it cannot be treated as a Government Department.

11. The next contention of the petitioner is that the petitioner corporation can appoint persons only against sanctioned post by following recruitment process and by following communal reservation policy. Since there is no sanctioned post the 2nd respondent cannot issue direction to grant permanency to the contract workers. The issue of granting regularization, absorption against unsanctioned post was considered by the Hon’ble Supreme Court in the case of Union of India & others Vs Ilmo Devi and another in Civil Appeal No.5689-5690 of 2021 in judgment dated 07.10.2021, wherein it is held that the High Court has no power to direct the employer to grant regularization and absorption, it there is no sanctioned post. The relevant portion is extracted hereunder:

“8.4 The observations made in paragraph 9 are on surmises and conjunctures. Even the observations made that they have worked continuously and for the whole day are also without any basis and for which there is no supporting evidence. In any case, the fact remains that the respondents served as part-time employees and were contingent paid staff. As observed above, there are no sanctioned posts in the Post Office in which the respondents were working, therefore, the directions issued by the High Court in the impugned judgment and order are not permissible in the judicial review under Article 226 of the Constitution. The High Court cannot, in exercise of the power under Article 226, issue a Mandamus to direct the Department to sanction and 17 create the posts. The High Court, in exercise of the powers under Article 226 of the Constitution, also cannot direct the Government and/or the Department to formulate a particular regularization policy. Framing of any scheme is no function of the Court and is the sole prerogative of the Government. Even the creation and/or sanction of the posts is also the sole prerogative of the Government and the High Court, in exercise of the power under Article 226 of the Constitution, cannot issue Mandamus and/or direct to create and sanction the posts”.

Even though the above case states about regularization and absorption, the same reasoning is applicable to the permanency also. Therefore, this Court is of the considered opinion that the said judgment is applicable to the present case also and the respondents cannot seek permanency if there is no sanctioned post.

12. The next contention of the petitioner is that under the Permanency Act the authority is not empowered with adjudicatory powers. More so when there are other provisions under various other Acts are there determining the rights of the parties. The Learned Counsel appearing for the petitioner submitted that in the present case the parties rights under the Contract Labour (Regulation and Abolition) Act are involved, hence the authority under Conferment of Permanent Status Act has no power to adjudicate the rights of the parties and relied on the recent judgement rendered in the judgment rendered in the case of Superintending Engineer, Erode Vs. Inspector of Labour and others reported in 2022 SCC Online Mad 1003 had an occasion to deal with the issue under Tamil Nadu Industrial Establishment (Conferment Permanent Status to Workmen) Act, 1981. Specifically the question of whether the Tamil Nadu Industrial Establishment (Conferment Permanent Status to Workmen) Act, 1981, is applicable and whether other Acts are involved while deciding the issue. The Hon'ble Division Bench has held if any complicated question of fact or law arises, the Inspector of Labour will not have power to deal with the case and is only the Labour Court which is empowered. The relevant portion of the judgment is extracted hereunder:

“22. In view of the above, while we are of the view that the Labour Inspector has the power to issue appropriate order to grant permanency to the workmen, it cannot be by adjudicating the complicated questions of fact and law. A perusal of the Act of 1981 does not provide power in Labour Inspector of the nature given to the Industrial Adjudicator, i.e., the Industrial Tribunal or Labour Court, as complete framework with procedure for it has been given under the Act of 1947. Certain provisions of the Civil Procedure Code have been made applicable therein for proper adjudication which does not exist under the Act of 1981.

23. If the facts of this case are taken into consideration, we find that the Labour Inspector has recorded his finding in reference to the Act of 1970 while adjudicating the issue. Such powers have not been conferred on him, rather he can pass appropriate order after summary enquiry. The view expressed by the Single Judge of this court in the case of Superintending Engineer, Vellore Electricity Distribution Circle, Vellore and others, supra, is not in conflict with the view aforesaid, rather in paragraph 35 of the said judgment, the difference between the power of Labour Inspector and Labour Court or Industrial Tribunal under the Act of 1947 has been made. Paragraph (35) of judgment, referred supra, is extracted hereunder:

"35. Therefore, I am unable to accept the submission made on behalf of the Board that the exercise of the power by the Inspector of Labour in conferring permanent status after holding necessary enquiries contemplated under S. 5 read along with rule 6(4) should be construed as arrogating to himself the powers available to the other adjudicatory forums created under the provisions of the Industrial Disputes Act, 1947. It will have to be stated that while the exercise of powers vested with the Inspector under the provisions of the Act is summary in nature, the one under the provisions of the Industrial Disputes Act may be an elaborate one. Nevertheless the same does not mean that by exercising the power under the provisions of the Act the Inspector of Labour would be trespassing into the adjudication process contemplated under the provisions of the Industrial Disputes Act. In this context, if the judgment of the Supreme Court in Nirchiliya case [1990 (2) L.L.N. 4] (vide supra) is applied, it can be safely held that where there is no prohibition under the provisions of either the Industrial Disputes Act or the Act, exercise of the power in the manner in which it can be done by the Inspector of Labour under the Act cannot be found fault with. It will have to be stated that such an exercise would be well within the statutory limitations provided under the Act. In fact, in the above-referred to judgment of the Hon'ble Supreme Court, the question for consideration was whether the workmen who initially raised an industrial dispute under the Industrial Disputes Act and who did not pursue it till its logical end when chose to move the authority under the then Madras Shops and Commercial Establishment Act, the Hon'ble Supreme Court held that in the absence of any prohibition under either of the enactments, such a course adopted by the workmen cannot be faulted. Therefore, applying the said ratio to the case on hand, it can be safely held that the concerned workmen here were placed in a better footing when they chose to straightaway move the Inspector of Labour under the Act, inasmuch as according to the workmen, having regard to the facts prevailing as on date, they were entitled for the conferment of permanent status as provided under the Act. If such a claim of the workmen was not factually maintainable, it was for the Board to have resisted the said claim with all available materials and could have convinced the Inspector of Labour as the claim ought not to have been countenanced. The Board having miserably failed to perform its duties in the manner expected of it, it cannot be now allowed to contend or complain against the powers exercised by the Inspector of Labour which was within the provisions of the Act. In this context, if the judgment of the Division Bench of this Court in Metal Powder Company, Ltd. case [1985 (2) L.L.N. 738] (vide supra), is applied, then also it can be safely held that the Inspector of Labour was well within his jurisdiction in holding the proceedings in the manner it was held and in passing the order by directing the petitioner/Board to confer permanent status on the workmen."

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34. We have considered the submission aforesaid and find that the order passed by the Labour Inspector needs to be interfered with remand of the case. It is, however, to be made clear that the Labour Inspector would not cause enquiry beyond the powers given under the Act of 1981 and thereby would not be having jurisdiction to adjudicate the complicated questions of fact and law in reference to any other statute than the Act of 1981. The Labour Inspector may, for the purpose of conducting summary enquiry, allow the parties to produce documents and if any of the workmen has completed 480 days of continuous service in 24 calendar months, appropriate directions can be issued for granting permanency. However, even if such an order is issued, it should be with a clear finding about each workman and the number of working days by referring to the period of 24 calendar months. The benefit as to the consequences thereupon would be only for the period of employment and if any of the workman is discontinued or not in service, he would be entitled to the benefit only for the period of service and not beyond that and, that too, after the completion of continuous service of 480 days in 24 calendar months, and not for a prior period. The direction aforesaid is not driven by the settlement for the reason that the workmen herein are those who were not extended the benefit of settlement and, therefore, sought claims by maintaining claim separately. However, it would not preclude both the sides from entering into settlement, if they so choose, during the period of summary enquiry by the Labour Inspector. The issue as to whether the respondents fall within the definition of "workman" is however decided against the petitioner Corporation, as not only a settlement was entered, but adjudication about claim to seek permanency has been decided earlier in reference to similarly placed.”

In the present case, since complicated question of law and complicated question of facts are involved, especially, when the Contract Labour (Regulation and Abolition) Act is involved to determine the rights of the parties, the Inspector of Labour is not empowered to deal with the case. Hence the Inspector of Labour, in the present case the Inspector of Factories, is without any authority and on this issue also the petitioner is entitled to the relief.

13. The next contention that was raised by the petitioner is that the Labour Officer has not considered the fact that the Contract Labour (Regulation and Abolition) Act permits the contract workers if the Principle Employer had registered with the authority under the Contract Labour (Regulation and Abolition) Act. In the present case the principle employer had registered as “Principle Employer” and the names of the Contractors are reflected in its Registration under the Act and also all the Contractors, who have employed more than 20 persons have obtained license under the Act. The Contractors have paid salary and has entered into 12(3) settlement, in which the Union and the Contractor are parties to the contract, which is entered for determining the terms of contract for engaging the workers. The incentive, statutory payments like, ESI, EPF etc., are also paid to the contract workers as per statutory regulations. But the contention of the 2nd respondent and the respondents 6 to 19 is that the contract employees were extracted work, by the Contractor for and on behalf of the Principle Employer and were paid meager wages and hence the contract is sham and nominal. After hearing the rival submissions this Court is of the considered opinion that once the management is registered under the Contract Labour (Regulation and Abolition) Act and the Contractors have also taken license, then the submission of the respondents that the contract is sham and nominal cannot be entertained. The provisions of the Contract Labour (Regulation and Abolition) Act are only regulating such contract workers and while regulating the said contract workers, the Contract Labour (Regulation and Abolition) Act, states that the principal employer should register himself and he should declare the name of the Contractors and that the principal employer should ensure that all the statutory benefits are being paid to the contract employees, by the Contractors. When such statutory liability is discharged then there is no ground to treat the contract as sham and nominal. Therefore, the contention of the respondents that the contract is sham and nominal cannot be accepted and the petitioner Corporation is in advantageous position.

14. The further contention of the petitioner is that that Labour Union has already raised industrial dispute for referring the issue to the Labour Court and the Government had declined to refer the issue and the reason stated is that “Since the matter relates to abolition as well as absorption of contract labour, the Union can take up the matter with the Contract Labour Advisory Board under section 10(20 of the Contract Labour (Regulation & Abolition) Act, 1970”. Subsequently the Advisory Board has declined to refer. The Advisory Report had stated that the specific jobs attended to by the contractors need not be abolished. The issue is still pending before the Hon’ble High Court in writ appeal. Therefore, this Court is of the considered opinion that when the issue is pending before this Court in writ appeal, the present proceedings before the Inspector of Labour (in the present case Inspector of Factories) under Permanency Act would affect the rights of the parties. More so this Court has held that the Inspector of Labour (in the present case Inspector of Factories) is not having jurisdiction to consider if there is complicated questions of law and if there are other Acts are involved, because the Inspector of Labour (Inspector of Factories) is not having the power to adjudicate. Hence the petition filed before the Inspector of Labour (Inspector of Factories) cannot be entertain since he is not appropriate authority. The respondents are at liberty to agitate the issue which is already pending in writ appeal and before the authorities prescribed under Contract Labour (Regulation & Abolition) Act, 1970

15. For the reasons stated above and on the aforesaid observations, this Writ Petition is allowed. The impugned passed by the first respondent in Na.Ka.No.E4154/2010, dated 11.06.2012, is hereby quashed. No Costs. Consequently, connected Miscellaneous Petition is closed.