Contract labour absorption requires a Section 10(1) ban or sham contract finding; a mere "consider" order creates no right.

A High Court cannot direct absorption of workers treated as contract labour merely because the work is perennial or the workers were engaged through a contractor; absent a Section 10(1) prohibition notification and absent a finding that the contract system is a sham or camouflage, writ jurisdiction cannot create a direct employer-employee relationship. A prior direction to "consider" an absorption claim only requires lawful examination and does not confer a substantive right to absorption, especially where the governing circular excludes contract labour. On that basis, the absorption claim was rejected and the writ relief was not available, while other remedies before the Industrial Tribunal or Court remained open.

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Issues: (i) whether the High Court could direct absorption of workers treated as contract labour in the absence of a notification under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 and without a finding that the contract system was a sham or camouflage; (ii) whether earlier writ orders directing the authority to "consider" the claim for absorption conferred a substantive right to absorption under the Corporation's circular.

Issue (i): whether the High Court could direct absorption of workers treated as contract labour in the absence of a notification under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 and without a finding that the contract system was a sham or camouflage.

Analysis: The governing principle, as restated from the later Constitution Bench view, is that there is no automatic absorption of contract labour merely because the work is perennial or because the workers were engaged through a contractor. Absorption can follow only where the contract is shown to be a mere camouflage or where the matter is otherwise adjudicated in the proper forum. In the absence of a prohibition notification under Section 10(1) and in the absence of any finding that the contract was sham, the High Court, in exercise of Article 226 jurisdiction, could not assume a direct employer-employee relationship or grant absorption.

Conclusion: The direction for absorption on this basis was unsustainable and was against the respondents.

Issue (ii): whether earlier writ orders directing the authority to "consider" the claim for absorption conferred a substantive right to absorption under the Corporation's circular.

Analysis: A direction to "consider" requires the authority to apply its mind and decide in accordance with law; it does not amount to a finding on entitlement unless the court has expressly recorded such a finding. The earlier orders had not adjudicated the respondents' status or their entitlement under the circular, and the circular itself excluded contract labour. The authority was therefore entitled to reject the claim on the ground that the respondents were not direct employees and did not fall within the circular.

Conclusion: The earlier "consider" orders did not create a right to absorption, and the rejection of the claim was lawful.

Final Conclusion: The appeal succeeded, the High Court's order was set aside, and the writ petition seeking absorption was dismissed, while leaving the respondents free to pursue any remedy before the Industrial Tribunal or Court in accordance with law.

Ratio Decidendi: In the absence of a Section 10(1) prohibition notification and absent a judicial or industrial finding that the contract labour arrangement is a sham or camouflage, a High Court cannot direct absorption of contract labour in writ jurisdiction, and a mere direction to "consider" a claim does not confer substantive entitlement.

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