Contract labour disputes require factual adjudication; writ courts cannot order automatic absorption or treat the arrangement as sham without proof.

Disputed questions about whether a contract labour arrangement is genuine or a camouflage cannot be resolved in writ jurisdiction, because that requires evidence and factual adjudication by the proper forum. The High Court's direction to discontinue contract labour and absorb workers as permanent employees was therefore unsustainable on the material before it. The governing contract labour framework also does not permit automatic absorption merely because abolition of contract labour is considered or ordered; the appropriate Government must act within the statutory scheme, and factual disputes must be examined by the industrial adjudicator or other competent authority. The impugned judgment was set aside and the union was left to pursue remedies before the appropriate authority.

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Issues: (i) Whether the High Court could, in exercise of writ jurisdiction, direct discontinuance of contract labour and absorption of workers as permanent employees on the footing that the contract arrangement was sham or that the statutory conditions under the contract labour law were not complied with. (ii) Whether, after the Constitution Bench ruling governing contract labour, automatic absorption of contract labour could be ordered by the Court without a prior finding by the appropriate forum on disputed facts.

Issue (i): Whether the High Court could, in exercise of writ jurisdiction, direct discontinuance of contract labour and absorption of workers as permanent employees on the footing that the contract arrangement was sham or that the statutory conditions under the contract labour law were not complied with.

Analysis: The dispute turned on contested facts relating to the nature of the work, the authenticity of the labour contracts, maintenance of records, and whether the workers were really engaged through a genuine contract or through a camouflage. The material relied upon by the High Court, including complaints, administrative correspondence, and recommendations for abolition, did not by itself establish that the contracts were sham. Such a conclusion required evidence and adjudication on disputed facts, which was not appropriately undertaken in writ jurisdiction.

Conclusion: The direction of the High Court on sham contract and direct absorption was not sustainable.

Issue (ii): Whether, after the Constitution Bench ruling governing contract labour, automatic absorption of contract labour could be ordered by the Court without a prior finding by the appropriate forum on disputed facts.

Analysis: The governing law held that neither the contract labour statute nor any other provision provided for automatic absorption upon prohibition of contract labour, and that the question whether a contract was genuine or a mere ruse had to be examined by the industrial adjudicator where disputed facts existed. The appropriate Government alone had the power to consider abolition under the statutory scheme, and the Court could not itself substitute that decision by ordering absorption as a matter of course.

Conclusion: Automatic absorption could not be ordered by the Court, and the matter had to be left to the appropriate Government or industrial adjudicator.

Final Conclusion: The impugned judgment was set aside and the appeal succeeded, while leaving the union to pursue remedies before the appropriate authority under the governing contract labour law framework.

Ratio Decidendi: In matters involving contract labour, disputed questions about whether the arrangement is genuine or a camouflage cannot be resolved in writ jurisdiction, and neither the contract labour statute nor judicial power permits automatic absorption of contract labour without the statutory process and factual adjudication by the proper forum.

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