Full Judgment Text
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PETITIONER:
GAMMON INDIA LTD. ETC. ETC.
Vs.
RESPONDENT:
UNION OF INDIA & ORS. ETC.
DATE OF JUDGMENT20/03/1974
BENCH:
RAY, A.N. (CJ)
BENCH:
RAY, A.N. (CJ)
REDDY, P. JAGANMOHAN
DWIVEDI, S.N.
GOSWAMI, P.K.
SARKARIA, RANJIT SINGH
CITATION:
1974 AIR 960 1974 SCR (3) 665
1974 SCC (1) 598
CITATOR INFO :
R 1977 SC 747 (7)
RF 1992 SC 457 (7)
ACT:
Contract Labour (Regulation and Abolition) Act.
1970--Constitutional validity of,--Scope and application
of--Validity of the Rules made under the Act.
Interpretation of statutes-ejusdem generis.
HEADNOTE:
The Contract Labour (Regulation and Abolition) Act, 1970,
requires contractors to take out licenses. The Act also
imposes certain duties and liabilities on the contractor, in
respect of the workmen employed by the contractors. The
Contractor is defined as a person who undertakes to produce
a given result for the establishment through contract labour
or who supplied contract labour for any work of the
establishment and includes a sub-contractor. It was
contended that the application of the Act is in respect of
pending work of construction amounts to unreasonable
restriction on the right of the contractors violating
article 19(1)(g) of the Constitution. It was further
contented that the fees prescribed for registration,
licences, or renewal of licences amount to a tax and are,
therefore, beyond the rule-making powers of the Central and
State Government. It was further contended that the
provisions of the Act are unconstitutional and unreasonable
because of impracticability of implementation. Provisions
in regard to canteens, rest rooms, latrines and urinals as
contemplated by sections 16 and 17 of the Act read with.
Central Rules 40 to 56 and rule 25(2) (vi) are incapable of
implementation and enormously expensive as to amount to
unreasonable restrictions within the meaning of Article
19(1)(g). The provisions contain in Central Rule
25(2)(v)(b) were challenged as unreasonable. Rule 25
(2)(v)(a) provides that wages and other conditions of
service of workmen who do same or similar kind of work as
the workmen employed directly in the principal employer’s
establishment shall be the same. In case of disagreement it
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is provided that the same shall be decided by the Chief
Labour Commissioner whose decision shall be final.
Rule25(2)(b)states that in other cases the wage rates
holidays and conditions of service of the workmen of the
contractor would be such as may be specified by the Chief
Labour Commissioner. There is no provision for appeal.
It was also contended that the provisions in section 14 with
regard to forfeiture of security are unconstitutional. The
validity of rule 24 which requires deposit of Rs. 30/- per
workmen is challenged as void under Articles 14 and 19(1)(f)
both on the ground that the same is arbitrary and also
because there is no obligation on the Government to pay to
the workmen or to utilise for the workmen any part of the
security deposit so forfeited. It was also contended that
section 34 of the Act which empowers the Central Government
to make any provision not inconsistent with the provisions
of the Act for removal of difficulty is unconstitutional on
the ground of excessive delegation. The intervener
challenged section 28 of the Act conferring power on the
Government to appoint Inspectors as conferring arbitrary and
unguided power.
It was also contended that the petitioners were not
contractors within the meaning of the Act since the work of
the petitioner is not any part of the work of the principal
employer nor was the work normally done in the premises of
the establishment of the principal employer.
HELD : (1) The contention that the application of the Act to
the pending work of construction amounts to unreasonable
restriction was negatived on the ground that the bill was
introduced in 1967 and it was passed in 1970. The subject
matter of the legislation is not contract; it is contract
labour. There is no unreasonableness in its application to
pending contracts. The pendency of contract is not a
relevant consideration. There is no retrospective
operation. There is no material to show that the petitioner
would suffer. The contractors have not shown the contract
to show the rates of work. It is also not known whether
the petitioners have clauses in the contract to ask for
increase of rates in changed circumstances. [671F]
(2) The fees prescribedfor registration, licences and
renewal of licenses do not amount to a levy of taxes. The
Government gives service in regard to the licences and
registration. [671H]
666
(3) There is no arbitrary power or excessive delegation of
legislative authority in regard to-grant of licences. The
Act and the Rules provide ample guidelines as to the grant
and the terms and conditions of licence. Section 15 of the
Act confers a right of appeal on any person who is aggrieved
by any order refusing a licence or if there is a revocation
or suspension of a licence. [672A-B]
(4) The conditions of contract labour has been engaging the
attention of various Committees for a long time. The
benefits conferred by the Act and the Rules are social
legislative measures. The various measures which are
challenged as unreasonable, namely, the provisions for
canteens, rest rooms, facilities for supply of drinking
water, latrines, urinals, first aid facilities are amenities
for the dignity of human labour. The measure is in the
interest of the public. There is a rational relation
between the impugned Act and the object to be-achieved and
the provisions are not in excess of that object. The
classification is not arbitrary. There is no violation of
Article 14. It is an unproved allegation as to whether it
is impracticable to provide a canteen. On the face of it
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there is no impossibility. Possibility is presumed unless
impossibility is proved. It is not an unreasonable
provision to require a rest room, if the labourers are
required to halt at night at the place of work. [672D-E;
673A]
(5) Rule 25(2)(v)(b) contains an explanation which lays down
that while determining the wages and conditions of service
the Chief Labour Commissioner shall have regard to wages and
conditions of service in similar employments. This is
reasonable. It will be question from statute to statute
from fact to fact as to whether absence of a provision for
appeal makes the statute bad. The Commissioner of Labour
has special knowledge. It is not difficult to determine and
decide the questions under rule 25(2)(v)(b). Absence of a
provision for appeal is not unreasonable in the context of
the provisions in this statute. The provisions for
forfeiture of security without provisions for spending the
amount on workers is constitutionally valid because
forfeiture amounts to departmental penalty. The rate of Rs.
30/- per workman does not offend Article 14. Further,
orders for forfeiture are appealable and forfeiture itself
is after giving the party reasonable opportunity of showing
cause against the action proposed. [674A-C; 676A]
(6) Section 34 of the Act does not amount to excessive
delegation.[676G]
(7) The Act was passed to prevent the exploitation of
contract labour and also to introduce better conditions of
work. The underlying policy of the Act is to abolish
contract labour wherever possible and practicable and where
it cannot be abolished altogether the policy of the Act is
that the working conditions of the contract labour should be
so regulated as to ensure payment of wages and provision of
essential amenities. Section 10 of the Act deals with
abolition while the rest of the Act deals mainly with the
regulation. [669G-A]
Since the validity of section 28 was challenged by an
Intervener and not by the petitioners, the intervener was
not permitted to challenge since an intervener cannot raise
points which are not canvassed by the Petitioners in the
pleadings. [677A]
(8) The contention of the petitioners that they are not
contractors within the meaning of the Act is unsound.
Establishment is understood as including the work site. The
construction work which the contractor undertakes is the
work of the establishment. [669F]
JUDGMENT:
ORIGINAL JURISDICTION : Writ Petition Nos. 202/413/71, 92,
320, 330, 375, 391, 509 & 626-627/72 and 114, 315-316/73,
and 1906 or 1973.
(Petitions under Article 32 of the Constitution of India).
Mr. G. L. Sanghi and Mr. L N. Shroff for the Petitioners
(In W.P. Nos. 413/71 509/72) & Intervener No. 2:
Mr. Soli Sorabjee. Mr. V. M. Tarkundde (In 202/73, Mr. K
S. Ramamurthi (In 375/72), M/s. D. R. Thadani (In 375/72)
and G. L. Sanghi (in 320/72 & 330/72), with M/s C. M. Mehta
and B. R. Agarwala, (Mr. C. M. Mehta did not appear in
375/72) for the petitioners (in WPs. Nos. 320, 330, 375,
391 of 1972 and WP No. 202/73).
M/s S. K. Mehta, M. Qamaruddin, K. R. Nagraja and Vinot
Dhawan for the Petitioners; (In W. Ps. Nos. 626-27/72.
667
Mr. Vineet Kumar with M/s. G. L. Sanghi and S. N. Trivedi
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(from 21-2-1974) for the Petitioners (in W. P. No. 114/73)
Mr. S. N. Singh for the Petitioners (In W. P. Nos. 313-
316/73)
Mr. J. D. Jain, for the Petitioners (In W. P. No. 1906/73)
M/s D. K. Singha and K. R. Nambiar, for the Petitioners (In
W. P. No. 92/71) Dr. L. M. Singhvi with Mr. S. M. Jain for
the Respondent No. I (in W. P. No-. 413/71)
Mr. L. N. Sinha, Mr. M. C. Bhandare (for the State of
Maharashtra in 320 & 330/73), Mr. K. L. Hathi (for the State
of Gujarat in WP No. 202/71) with M/s. R. N. Sachthey and
M. N. Shroff for Respondent No. 2 (In W. P. No. 413/71) &
Respdt. No. I (In W. P. No. 509/72) and (In W. P. No.
626-627/72 Respdts. Nos. 1-2 (In W. P. 202/ 72) WP. No.
1906 73, AND 92/71):
Mr. G.B. Pai with Mrs. Urmila Kapoor, Miss Kamlesh Bansal,
and Mrs’ Shobhna Kikshit for Respdt. No. 3 (in W. P. No
320/72): Mr. R. Ram Reddy with Mr. P. P. Rao for the Respdt.
No. 5 (In W. P. No. 202/71). Mr. S. M. Jain for Respdt.
No. 3 (In W. P. 202/71) Mr. R. C. Prasad for Respdt. No. 8
(In W. P. 202/71) Mr. A. V. Rangam and Miss A. Subhashini
for the Respdt. No. 7 (In W. P. 202/71)
M/s Santosh Chatterjee and G. S. Chatterjee for the Respdt.
No. 6 (in W. P. No. 202/71):
Mr. M. N. Shroff for the Respdt. No. 10 (In W. P. No.
202/71):
Mr. L N. Shroff for the Respdt. I I (In W. P. No. 202/71):
Mr. Veerappa for the Respdt. 12 (In W. P. No. 202/71)
M/s G. Dass and B. Parthasarthi for the Respdt. 13 (in W. P.
No. 2,02/71)
Mr.P. Ram Reddy with P. P. Rao for the Applicant/Intervener
,,(The State of Andhra Pradesh in W. P. 413/71)
M/s. Sharad Manohar, B. P. Maheshwari and Suresh Sethi for
intervener No. 1 (K. C. Agarwala)
Mr. B. R. Agarwala for Intervener Nos. 3 & 4 (Gammon and
Y. V. Narayanan. )
Mr. N. N. Keshwani for intervener No. 5 (Gujarat Contractor
Assn.) The Judgment of the Court was delivered by
RAY, C. J. These petitions under Article 32 of the
Constitution challenge the validity of the Contract Labour
(Regulation and Abolition) Act, 1970 referred to as the Act
and of the Contract Labour (Regulation and Abolition)
Central Rules and Rules of the States of Rajasthan and
Maharashtra.
The petitioners carry on the business of contractors for
construction of roads, buildings, weigh bridges and dams.
The Act requires contractors to take out licences. The Act
also imposes certain duties and liabilities on the
contractors.
The Act defines in section 2 (c) a "contractor" in relation
to an establishment to mean a person who undertakes to
produce a given
668
result for the establishment, other than a mere supply of
goods or articles of manufacture to such establishment,
through contract labour or who supplies contract labour for
any work of the establishment and includes a sub-contractor.
The other definitions relevant to the meaning of a
contractor are establishment, principal employer and
workmen.
"Establishment" as defined in section 2 (e) of the Act means
(i) any office or department of the Government or a local
authority, or (ii) any place where any industry, trade,
business, manufacture or occupation is carried on.
"Principal employer" as defined in section 2 (g) of the Act
means (i) in relation to any office or department of the
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Government or a local authority, the head of that office or
department or such other officer as the Government or the
local authority, as the case may be, may specify in this
behalf, (ii) in a factory, the owner or occupier of the
factory and where a person has been named as the manager of
the factory under the Factories Act, 1948, the person so
named, (iii) in a mine, the owner or agent of the mine and
where a person has been named as the manager of the mine,
the person so named, and (iv) in any other establishment,
any person responsible for the supervision and control of
the establishment.
"Workman" is defined in section 2 (i) of the Act to mean any
person employed in or in connection with the work of any
establishment to do any skilled, semi-skilled or unskilled
manual, supervisory, technical or clerical work for hire or
reward, whether the terms of employment be express or-
implied.
Section 2 (b) of the Act states that a workman shall be
deemed to be employed as "contract labour" in or in
connection with the work of an establishment, when he is
hired in or in connection with such work by or through a
contractor, with or without the knowledge of the principal
employer.
The petitioners contend that they are not contractors-
within the definition of the Act. They advance two reasons.
First, the work of the petitioners is not any part of the
work of the principal employer nor is it the work "in
connection with the work of the establishment", namely,
principal employer. Second, the work of the petitioners is
normally not done in the premises of the "establishment" of
the principal employer.
Relying on the definitions. counsel for the petitioners
contended that establishment means any place where any
industry, trade, business, manufacture or occupation is
carried on and, therefore, the workmen employed by the
petitioners are not contract labour because they are not
employed in connection with the work of the establishment.
The work of the establishment is, according to the
petitioners, not only at the place where the business,
trade, industry of the establishment is carried on but also
the actual business or trade or industry of the
establishment. The entire emphasis is placed by the
petitioners on the words "work ’of any establishment." By
way of illustration it is said that if a banking company
which is an establish-
669
ment which carries on its business at Delhi employs the
petitioners to construct a building at Allahabad the
building to be constructed is not the work of the bank. It
is said that the only work of the bank as an establishment
is banking work and, therefore, the work of construction is
not the banking work of the establishment. Therefore, the
petitioners contend that the workmen employed by the
petitioners are not workmen in connection with the work of
the establishment.
The contention of the petitioners is unsound. When the
banking company employs the petitioners to construct a
building the petitioners are in relation to the
establishment contractors who undertake to produce a given
result for the bank. The petitioners are also persons who
undertake to produce the result through contract labour.
The petitioners may appoint sub-contractors to do the work.
To accede to the petitioners’ contention that the
construction work which Is away from the place where the
industry, trade, business of the establishment is carried on
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is not the work of the establishment is to render the words
"work of any establishments devoid of ordinary meaning. The
construction of the building is the work of the establish-
ment. The building is the property of the establishment.
Therefore, the construction work is the work of the
establishment. That is why a workman is deemed to be
employed as contract labour in connection with the work of
an establishment. The place where business or rade or
industry or manufacture or occupation is carried on is not
Synonymous with "the, work of the establishment" when a
contractor employs contract labour in connection with the
work of the establishment. The error of the petitioners
lies in equating the work of the establishment with the
actual place where the business, industry or trade is
carried on and the actual work of the business, industry or
trade.
It is plain that industry, trade, business, manufacture or
occupation is to expand. In connection with the expansion
of establishment, buildings are constructed. The site
chosen for the building is the work site of the
establishment. The work site is the place where on
completion of construction, the business of the
establishment will be carried on. Therefore, the work at
the site as understood in the definition is the work of an
establishment-. Establishment is understood as including
the work site. The construction work which the contractor
undertakes is the work of the establishment.
The Act was passed to prevent the exploitation of contract
labour and also to introduce better conditions of work. The
Act provides for regulation and abolition of contract
labour. The underlying policy of the Act is to abolish
contract labour, wherever possible and practicable. and
where it cannot be abolished altogether, the policy of the
Act is that the working conditions of the contract labour
should be so regulated as to ensure payment of wages and
provision of essential amenities’. That is why the Act
provides for regulated conditions of work and contemplates
progressive abolition to the extent contemplated by section
10 of the Act. Section 10 of the Act deals with abolition
while the rest of the Act deals mainly with regulation. The
dominant idea of the section 10 of the Act is to find out
whether
670
contract labour is necessary for the industry, trade,
business, manufacture or occupation which is carried on in
the establishment.
The Act in section 10 empowers the Government to prohibit
employment of contract labour in any establishment. The
Government under that section has to apply its mind to
various factors before the Government prohibits by
notification in the official gazette, employment of contract
labour in any process, operation or other work in any
establishment. The words "other work in any establishment"
in section 10 of the Act are important. The work in the es-
tablishment will be apparent from section 10 (2) of the Act
as incidental or necessary to the industry, trade, business,
manufacture or occupation that is carried on in the
establishment. The Government before notifying prohibition
of contract labour for work which is carried on in the
establishment will consider whether the work is of a
Perennial nature in that establishment or work is done
ordinarily, through regular workmen in that establishment.
The words "work of an establishment " which are used in
defining workmen as contract labour being employed in
connection with the work of an establishment indicate that
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the work of the establishment there is not the same as work
in the establishment contemplated in section 10 of the Act.
The words "other work in any establishment" in section 10
are to be, construed as ejusdom generis. The expression
"other work" in the collection of words process, operation
or other work in any, establishment occurring in section 10
has not the same meaning as the expression "in connection
with the work of an establishment", spoken in relation to
workmen or contractor.
A contractor under the Act in relation to an establishment
is a person who undertakes to produce a given result for the
establishment through contract labour. A contractor is a
person who supplies contract labour for any work of the
establishment. The entire context shows that the work of the
establishment is the work site, The work site is an
establishment and belongs to the principal employer who has
a right of supervision and control., who is the owner of the
premises and the end product and from whom the contract
labour receives its payment either directly or through a
contractor It is the place where the establishment intends
to carry on its business, trade, industry, manufacture,
occupation after the construction is complete.
According to the petitioners, the contract labour employed
by their sub-contractors will be within the provisions of
the Act but when the petitioners will be engaged by a trade,
or industry, the petitioners will not be a contractor and
the workmen directly emPloyed by the petitioners will not be
contract labour. This is a strange, and anomalous
submission. The Act must be construed as a whole. The Act
must apply to contract labour in connection with the work of
an establishment when the contract labour is hired by the
contractor or by the sub-contractor of the contractor.
671
The expression "work of an establishment" means the work
site where the construction work of the establishment is
carried on by the petitioners by employing contract labour.
Every clause of a statute is to be construed with reference
to the context and other provisions of the Act to make a
consistent and harmonious meaning of the statute relating to
the subject matter. The interpretation of the words will be
by looking at the context, the collocation of the words and
the object ’of the words relating to the matters. The
’words are not to be viewed detached from the context of the
statute. The words are to be viewed in relation to the
whole context. The definition of contractor, workman,
contract labour, establishment, principal employer all
indicate that the work of an establishment means the work
site of the establishment where a building is constructed
for the establishment. The construction is the work of the
establishment. The expression "employed in or in connection
with the work of the establishment" does not mean that the
operation assigned to the workmen must be a part or
incidental to the work performed by the principal employer..
The contractor is employed to produce the given result for
the benefit of the principal employer in fulfilment of the
undertaking given to him by the contractor. Therefore, the
employment of the contract labour, namely, the workmen by
the contractor is in connection with the work of the
establishment. The petitioners are contractors within the
meaning of the Act. The work which the petitioners
undertake is the work of the establishment.
The second contention on behalf of the petitioners is that
the provisions of the Act and the Rules made thereunder are
unconstitutional.
It is said that the application of the Act in respect of
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pending work of construction amounts to unreasonable
restriction on the right of the contractors under Article 19
(1) (g). The bill was introduced in 1967. It was passed in
1970, There is no unreasonableness in that it applies to
pending contracts. The pendency of cont is not a relevant
consideration. The subject-matter of the legislation is not
contract. it is contract labour. There is no retrospective
operation. There are no materials to show that the
petitioners will suffer. The contractors have not shown the
contracts to show the rates of work. It is also not known
whether the petitioners have clauses in the contract to ask
for increase of rates in changed circumstances. That is
usual in contracts. The petitioners during the years 1967
to 1970 knew that the legislative measure was going to find
place in the statute book. The crucial point is that the
interests of the workmen are remedied by the objects of the
Act. Those interests are minimum labour welfare. There is
no unreasonableness in the measure.
The fees prescribed for registration, licence or renewal of
licences are said to amount to a tax and are therefore
beyond the rule-making powers of the Central and State
Governments. The fees prescribed for registration, licence
and renewal of licences do not amount to a levy of tax. The
Government has to bear expenses for the scheme
672
of registration, licence. The Government gives service in
regard to licences and registration. Further there is no
arbitrary power or excessive delegation of legislative
authority in regard to grant of licence. The Act and the
Rules provide ample guideline as to the grant and terms and
conditions of licence. Section 15 of the Act confers a
right of appeal on any person who is aggrieved by any order
refusing a licence or if there is revocation or suspension
of licence. Similarly, when there is revocation of
registration of an establishment or there is refusal to
grant registration there is a right of appeal.
Counsel for the petitioners contended that the provisions of
the Act are unconstitutional and unreasonable because of
impracticability of implementation. Provisions in regard to
canteens, rest rooms,. latrines and urinals as contemplated
in sections 16 and 17 of the Act read with Central Rules 40
to 56 and Rule 25 (2) (vi) are said to be incapable of
implementation and also to be enormously expensive as to
amount to unreasonable restrictions under Article 19 (1)
(g). No provision of the Act is impeached on that ground.
The attack is only with regard to rules.
The condition of contract labour has been engaging the
attention of various committees for a long time. The
benefits conferred by the Act and the Rules are social
welfare legislative measures. The various measures which
are challenged as unreasonable namely, the provisions for
canteens, rest rooms, facilities for supply of drinking
water, laterines, urinals, first aid facilities are
amenities for the dignity of human labour. The measure is
in the interest of the public. it is for the legislature to
determine what is needed as the appropriate conditions for
employment of contract labour. It is difficult for the
Court to impose its own standards of reasonableness. The
legislature will be guided by the needs of the general
public in determining the reasonableness of such
requirements. There is a rational relation between the
impugned Act and the object to be achieved and the provision
is not in excess of that object. There is no violation of
Article 14. The classification is not arbitrary. The
legislature has made uniform laws for all contractors.
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Section 16 of the Act confers power on the Government to
make rules that in every establishment to which the Act
applies wherein contract labour numbering one hundred or
more are employed by a contractor, one or more canteens
shall be provided and maintained by the contractor for the
use of such contract labour. Rule 42 relates to canteens
and Rule 43 relates to dining halls. Rule 42 states that
where the contract labour is likely to continue for six
months or more and wherein the contract labour numbers 100
or more, a canteen shall be provided as mentioned therein.
This rule indicates that where a fairly stable work goes on
for six months and the number of labour is 100 or more, a
canteen is to be provided.
It is said that it is difficult to find space in Bombay to
provide for canteens. It is also said that if a road is to
be constructed, it will be difficult to provide canteen. It
is said on behalf of the respondents that a provision for-
canteen is capable of performance whether in
673
a city orin a desert. On the face of it, there is no
impossibility. Possibilityis presumed unless
impossibility is proved. it is an unproved allegationas to
whether it is impracticable to provide a canteen. When the
construction work goes on, the contractor will devise ways
and means to provide a canteen. The provision for canteen
is not unreasonable. It is not impracticable to have a
canteen. A city like Bombay or the construction of road is
not an insurmountable feature by itself to hold either that
the provision is unreasonable or impracticable.
Section 17 of the Act states that in every place where
contract labour is required to halt at night in connection
with the work of the establishment, there shall be provided
a rest room as mentioned therein. Rule 41 of the Central
Rules states that where contract labour is likely to
continue for three months or more and where contract labour
is required to halt at night, rest rooms shall be provided.
It is not unreasonable to provide rest room. The contractor
will make necessary provision. It will be unreasonable to
hold that a labourer will be required to halt at night at
the place of work but he will not have any rest room.
Section 18 of the Act speaks of facilities like supply of
drinking water, conveniences of laterines, urinals and
washing facilities. Rule 51 carries out the provision of
the Act by stating that laterines shall be provided. The
reasonableness as well as practicability of these facilities
is indisputable.
It is said that the provisions contained in Rule 25 (2) (ii)
are unreasonable because the licence states the number of
workmen employed and if the contractor is required to employ
a larger number, the contractor will commit a breach of the
condition. The answer is simple. The contractor will take
steps to amend the licence. Sections 23 and 24 of the Act
which speak of contravention of provisions regarding the
employment of contract labour will be interpreted in the
light of section 14 (1) (b) of the Act as to whether the
holder of a licence has, without reasonable cause, failed to
comply with the condition of the licence. If there is
wrongful refusal of amendment, that is appealable under the
Act.
The provisions contained in Central Rule 25 (2) (v) (b) are
challenged as unreasonable. Rule 25 (2) (v) (a) states that
wages, conditions of service of workmen who do same or
similar kind of work as the workmen directly employed in the
principal employer’s establishment shall be the same. In
case of disagreement with regard to type of work, it is
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provided that the same shall be decided by the Chief Labour
Commissioner whose decision shall be final. Rule ’25 (2)
(v) (b) states that in other cases, the wages rates,
holidays and conditions of service of the workmen of the
contractor shall be such as may be specified by the Chief
Labour Commissioner. There is an explanation to this clause
that while determining wages and conditions of service under
Rule 25 (2) (v) (b) the Chief Labour Commissioner shall have
regard to wages and conditions of service in similar em-
ployment. This is reasonable.
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The complaint against Rule 25 (2) (v)(b) is that there is no
provision for appeal. It is not difficult to determine and
decide cases of this type. The Commissioner of Labour has
special knowledge. It will be a question from statute to
statute, from fact to fact as to whether absence of a
provision for appeal makes the statute bad. The provisions
contained in Rule 25 (2) (v) (b) refer to wages, hours of
work and conditions of service in similar employment. A
provision for appeal is not inflexible. The issue is simple
here. A long drawn procedure may exceed the duration of
employment of the workmen. A proper standard is laid down
in the explanation to Rule 25 (2) (v) (b). The absence of a
provision for appeal is not unreasonable in the context of
provisions here. The Commissioner shall have due regard to
the wages of workmen in similar employment. The parties are
heard and the Commissioner of Labour who is specifically
acquainted with the conditions, applies the proper
standards. There is no unreasonableness in the Rules.
The petitioners contended in the third place that the
provisions contained in section 14 of the Act with regard to
forfeiture of security are unconstitutional. Section 12 of
the Act provides that no contractor shall undertake or
execute any work except in accordance with a licence and
further that licence shall be issued on payment of fees and
on deposit of a security for the due performance of the con-
ditions as may be prescribed. Section 14 of the Act
provides that if a licensing officer is satisfied on a
reference made to him or otherwise that the holder of a
licence has, without reasonable cause failed to comply with
the conditions subject to which the licence has been granted
or has contravened any of the provisions of this Act or the
Rules made thereunder then without prejudice to any other
penalty to which the holder of the licence may be liable
under the Act the licensing officer may, after giving the
holder of the licence, an opportunity of showing cause,
revoke or suspend the licence or forfeit the sum, if any, or
any portion thereof deposited as security for the due
performance of the conditions subject to which the licence
has been granted. Rule 24 of the Central Rules relates to
security. Maharashtra and Rajasthan Rules contain similar
provisions. Rule 24 of the Central Rules provides that the
security amount of Rs. 30/- for each of the workmen is to be
deposited as security for the due performance of the
conditions of licence and compliance with the provisions of
the Act or the rules made thereunder.
On behalf of the petitioners it is said that Rule 24 which
fixes the fee of Rs. 30/- per workman is void under Articles
14 and 19 (1) (f) because it is an arbitrary sum. Secondly,
it is said that there is no obligation on the Government to
pay to the workmen or to utilise for the workmen any part of
the security deposit so forfeited. Thirdly, it is said that
the breach of the conditions of licence or provision of the
Act is made punishable under the penal provisions of the
Act, viz. section 24 and yet Rule 24 unreasonably provides
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for the forfeiture of deposit. Fourthly, it is said that
any breach regarding the welfare of the workmen apart from
being penal is safeguarded by the requirement that the
principal employer would perform the obligation and
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recover the amount from the contractor. Fifthly, section 20
of the Act provides that where the benefit for contract
labour is not provided by the contractor, the principal
employer may provide the same and deduct the expenses so
incurred from amounts payable to the contractor. Sixthly,
it is said that theprovision regarding forfeiture of’
deposit has no rational connection between the sum
required to be deposited and the number of workmen nor does
the same have rational nexus with the object sought to be
achieved since the Government is not bound to utilise the
amount for workmen, concerned. Finally, it is said that
Article 14 is violated because it will work harshly against
medium and weaker class of contractors who have to deposit
substantial amounts before getting a contract and who
further have to go on leaving in deposit with the Govern-
ment substantial amounts. The security is characterised by
the petitioners as forced loan without interest.
The relevant Central Rules with regard to deposit of
security are Rules 24 and 31. Rule 24 provides for deposit
of security at the rate, of Rs. 30/- per workmen for the due
performance of the conditions of the licence and compliance
with the provisions of the Act or the rules made thereunder.
Rule 31 states that if the licensing officer is, satisfied
that there is no breach of the conditions of licence or
there is no order under section 14 of the Act for the
forfeiture of security or any portion thereof, he shall
direct the refund of the security. If there is an order
directing the forfeiture of any portion of the security
deposit- the amount forfeited shall be deducted- and the
balance, if any, refunded. The forfeiture under section 14
(2) of the Act is for failure to comply with the conditions
subject to which the licence is granted or contravention of
the provisions of the Act or the rules made thereunder.
The forfeiture of deposit under section 14 of the Act may be
for the, entire sum or any portion thereof. The forfeiture
may be for the purpose of due performance of the conditions
of the licence or for contravention of any provision of the
Act or Rules made thereunder. If any portion of the
security is forfeited, it is in relation to the extent of
infraction or the degree of due performance which may be
required. The security is utilisable for the due
performance of the obligations or which the security is
taken. The words "for the due performance of the
conditions, subject to which the licence has been granted"
are descriptive of the security. The conditions of licence
appearing in Form No. VI are that the licensee shall not
transfer the licence and rates of wages shall be not less
than the rates prescribed under the minimum Wages Act. The
other conditions are with regard to hours of work, wage
rates and holidays and conditions of service as may be-
specified by the Labour Commissioner. These are some of the
principal conditions. The provision for forfeiture without
provision for spending the amount on workers is
constitutionally valid because .the forfeiture amounts to
departmental penalty. Forfeiture means not merely that
which is actually taken from a man by reason of some breach
of condition but includes also that which becomes liable to
be so taken as a penalty.
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The rate of Rs. 30/- per workman does not offend Article 14.
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The rate is relatable to the classification of big and small
contractors according to the number employed by them. No
additional burden is imposed by the rules.
Further orders for forfeiture are appealable. Forfeiture
itself is after giving the party reasonable opportunity of
showing cause against "the action proposed. Secondly the
condition of forfeiture is that the failure to comply with
the condition is without reasonable cause. The provisions
of the Act with regard to forfeiture do not suffer from any
constitutional infirmity. The rules are not inconsistent
with the provisions of the Act. The forfeiture of security
is for due performance or as a penalty on the licensee. The
order for forfeiture is an administrative penalty. The
provisions contained in sections 23 to 26 of the Act
indicate that contravention of the provisions regarding
employment of contract labour is punishable in Criminal
Court. The Licensing Officer tinder section 14 of the Act
is not a Court. Therefore, there is no aspect of double
jeopardy.
Section 34 of the Act was challenged as unconstitutional.
Section 34 of the Act provides that if any difficulty arises
in giving effect ’to the provisions of the Act, the Central
Government may, by order, published in the official gazette,
make such provisions not inconsistent with the provisions of
the Act as appears to it to be necessary or expedient for
removing the difficulty. Reliance was placed by
’petitioners on the decision of this Court in Jalan Trading
Co. v. Mazdoor Union reported in [1967] 1 S.C.R. 15.
Section 37 of the Act in that case authorised the Government
to provide by order for ,removal of doubts or difficulties
in giving effect to the provisions of the Act. This Court
held that it is for the legislature to make provisions for
removal of doubts or difficulties. The section in that case
,contained a provision that the order must not be
inconsistent with the Purposes of the Act. Another
provision in the section made the order of the Government
final. This Court held that in substance there was the vice
of delegation of legislation to executive authority. Two
reasons were given. First the section authorised the
Government to determine for itself what the purposes of the
Act were and to make provisions for removal of doubts or
difficulties. Second, the Power to remove the doubts or
difficulties by altering the provisions of the Act would in
substance amount to exercise of legislative authority ,and
that could not be delegated to an executive authority. In
the Present case, neither finality nor alteration is
contemplated in any Order under section 34 of the Act.
Section 34 is for giving effect to the provisions of the
Act. This provision is an application of the internal
functioning of the administrative machinery. Difficulties
can only arise in the implementation of rules. Therefore,
section 34 of the Act does not amount to excessive
delegation.
Section 28 of the Act was challenged as conferring arbitrary
and unguided power and, therefore violative of Articles 14
and 15. Section 28 of the Act confers power on the
Government to appoint persons
677
as it thinks fit to be the inspectors for the purposes of
the Act and such inspector shall have power to enter at all
reasonable hours the premises or place where contract labour
is employed for the purpose of examining any register or
record or notice and examine any person and seize, or take
copies of documents mentioned therein. When they have
reasons to believe that an offence has been committed, they
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can seize or take copies. This point was taken by the
Intervener. An. intervener cannot raise points which are
not canvassed by the petitioners in the pleadings.
For these reasons, the contentions of the petitioners fail.
The petitions are dismissed. Parties will pay and bear
their own costs.
P.H.P. Petitions dismissed.
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