TaxTMI 
TaxTMI 
2025 (4) TMI 1419
X X X X Extracts X X X X
X X X X Extracts X X X X
.... road vehicles, along with their stuffing and de-stuffing in/from containers, in the CWC's Inland Clearance Depot [ICD] at Ghazipur, Patparganj, with immediate effect. 3. CWC's challenge alleges non-application of mind, as required by, and in accordance with, Section 10 (2) of the Act, while issuing the impugned notification under Section 10 (1) of the Act. 4. CWC is a statutory corporation, established under the Warehousing Corporation Act, 1962. The relevant facility to the present dispute is an ICD established in 1985 by CWC at Patparganj, for which it had been granted a license by Customs Authorities under the Customs Act, 1992. 5. The ICD at Patparganj forms a dry port. Here, all formalities related to export/import [EXIM] of containers are said to be completed before transit to their respective destinations. It is CWC's case that EXIM related handling and transport activities are largely mechanised and include activities such as stuffing/de-stuffing of containers, which happen in factories of parties intending to export/import relevant containers, and that these parties are free to have their own labour and equipment. 6. Clauses 29 and 30 of the General Terms and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... praying for their reconsideration. 11. The CACLB in its 53rd meeting held on 11-12 March 2003 accepted the Committee's report, and recommended to the Government of India the prohibition of contract labour at CWC Patparganj. 12. Numerous petitions were then filed by workmen seeking prohibition of contract labour at the ICD by Government notification under Section 10 (1), as well as subsequent regularisation/absorption of these labourers into the CWC's workforce. 13. Vide order dated 18 April 2006, disposing of a large batch of writ petitions being WP (C)s 4334-4421/2006, this Court noted that the delay in the Government's decision on the recommendation of the CACLB to abolish contract labour deployment at the ICD was due to the Central Government's request for certain information and documents not being complied with in a timely manner by the CWC. This information was requested due to the presence of certain disputed facts within the CACLB's recommendations, regarding which the Government sought clarity before taking a decision. The CWC only submitted this information on 30 March 2006. 14. The aforementioned batch of petitions was disposed of with a direction to the UOI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar work being carried out in an establishment run by the CCI through regular workmen. d. The core activity of CWC is to provide storage and preservation of food grains and that operating the ICD would be an ancillary activity. e. The VRS utilised to reduce staff strength at the ICD was not considered by the CACLB. f. The work carried out is not perennial in nature as volume fluctuates with Government policy. g. The license conferred upon CWC by Customs authorities may be revoked at any time. h. The contract entered into with H & T contractors is not for the supply of labour/workman, but is on a job-work basis and involves the contractor keeping heavy machinery at hand, and that even payments are based on Rupees per Twenty-foot Equivalent Unit [TEU], Rupees per km, Rupees per quintal etc. i. Almost all other ICD's/CFS operated by CWC or other public sector undertakings outsource H & T work. The H & T contracts of CCI and other PSUs are on record as Annexure P-1 Colly. j. That the High-powered committee observed that the CWC operates in the same market as private persons and all handlers are not covered by the same rule. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(2013) 4 SCC 258, Indian Oil Corpn Ltd v UOI 2013 SCC OnLine Del 2334, Barat Fritz Werner Ltd v State of Karnataka (2001) 4 SCC 498, Mahindra and Mahindra v State of Maharashtra 1996 SCC OnLine Bom 22, Indian Oil Corporation Limited v UOI 2023 SCC OnLine Del 4046, Sankar Mukherjee v UOI 1990 (Supp) SCC 668, Ram Avtar Sharma v State of Haryana (1985) 3 SCC 189, SAIL v UOI (2006) 12 SCC 233, and State of madras v C.P. Sarathy (1952) 2 SCC 606. Analysis 25. Presently, we are limited to the evaluation of the impugned notification, to the extent that it conforms with the parameters laid down within Section 10 (2) of the Act, which warrant reproduction: "10. Prohibition of employment of contract labour.-(1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment. (2) Before issuing any notification under sub-section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... issuing a writ of certiorari under Article 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal acts illegally or properly, as for instance, it decides a question without giving an opportunity, be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ror; but there can be no doubt that what can be corrected by a writ of certiorari is an error of law and the said error must, on the whole, be of such a character as would satisfy the test that it is an error of law apparent on the face of the record. If a statutory provision is reasonably capable of two constructions and one construction has been adopted by the inferior Court or Tribunal, its conclusion may not necessarily or always be open to correction by a writ of certiorari. In our opinion, it is neither possible nor desirable to attempt either to define or to describe adequately all cases of errors which can be appropriately described as errors of law apparent on the face of the record. Whether or not an impugned error is an error of law and an error of law which is apparent on the face of the record, must always depend upon the facts and circumstances of each case and upon the nature and scope of the legal provision which is alleged to have been misconstrued or contravened." 30. Section 10 (2) mandates the consideration of conditions of work and benefits provided to contract labourers in the establishment, along with factors (a) through (d) (supra), on the basis of which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in the reply to the respondents' Section 151 application that the work performed by the contract labour at the establishment is not that of the objectives and functions of the CWC. 37. Furthermore, it is argued that according to the General Terms and Conditions of Storage, depositors are required to make their own arrangements for handling their stock, and may entrust its handling to the CWC. 38. Per contra, learned Counsel for the UOI submits that the loading and unloading of containers, stuffing and de-stuffing, and other tasks concerned with storage and handling of containers is an integral part of the work carried out at the Patparganj ICD. Relying upon the CACLB's findings, he states that though a trend of mechanisation is predominant, most machinery requires corresponding manpower to be operated. 39. Addressing the findings on this point of the CACLB's Committee, reported in its 53rd MoM, they observe at sub para (a) that the Committee found that the work of storage and handling of import and export containers/cargo, their stuffing and de-stuffing, has been carried out on the establishment since 1985 through contract labour, and that though contractors have change....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and the expression "other work" in the collocation 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" with reference to a workman or a contractor. 21. Section 10 of the Act provides for prohibition of employment of contract labour in any process, operation or other work in an establishment. The words "process, operation or other work" need not be interpreted to mean only the core activity and not peripheral activity as is sought to be suggested by learned counsel for the petitioners. In sub-section (2) of Section 10 of the Act certain guidelines have been provided for the Government before the issue of any notification to find out whether the "process, operation or other work" is incidental or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment. The expression used therein is wide in ambit to cover other activity arising in industry and not merely the actual manufacture. Otherwise to understand the expression "process, operation or other work" other than the meaning given in clause (a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(240 days in financial years 2001-02, 2002-03, and 2003-04). Therefore, the work is argued to be undoubtedly perennial in nature. 47. Contesting the claim of a shift in trends and a reduction in the need for manual labour, reference is made by learned Counsel for the UOI to statistics for manpower deployed in the year 2001 and 2002, showing that though there was a decline in manpower, mechanical operation can't be run in the absence of manual labour, however few their required number may be. 48. In fact, data showing the details of contract labourers employed along with the volume of work on an annual basis from the year 2000 to the year 2021, annexed along with the CWC's reply dated 18 January 2021 to Respondent 2 to 225's Section 151 application, as well as the CWC's written submissions, warrant reproduction: Sl.No. Year No. of workers/ contract labour Volume of business (No. of TEUs handled) Name of H&T contractor 1 2001 156 47496 M/s CTA Movers Pvt. Ltd (01.01.2001 to 01.03.2001) 2 2002 293 52565 M/s. OMMC Pvt. Ltd. 3 2003 322 48678 4 2004 320 53582 (01.03.2001 to 20.12.2006) 5 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hereunder: (b) Staff strength of Petitioner CWC from 2000 to 2020 Sl. No. Year No. of CWC Staff 1 2000-01 8579 2 2001-02 8455 3 2002-03 6984 4 2003-04 6813 5 2004-05 6690 6 2005-06 6413 7 2006-07 6192 8 2007-08 6059 9 2008-09 5935 10 2009-10 5765 11 2010-11 5667 12 2011-12 5492 13 2012-13 5222 14 2013-14 4777 15 2014-15 4557 16 2015-16 4078 17 2016-17 3639 18 2017-18 3570 19 2018-19 3042 20 2019-20 2880 54. This drastic decline in total staff employed by the CWC from the year 2000 until 2020 does not reflect in the fluctuations of contract labourers deployed, which were largely similar over 18 years out of the 20-year period for which data was produced. (c) Whether work is done ordinarily through regular workmen in that establishment or an establishment similar thereto 55. The CWC, in its pleadings, have vehemently opposed the finding contained at para (f) in the CACLB's MoM. In support of this, they have annexed tender documents concerning contracting out of H & T activities in estab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ohibited is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment; clause (b) requires the appropriate Government to determine whether it is of a perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment; clause (c) contemplates a verification by the appropriate Government as to whether that type of work is done ordinarily through regular workmen in that establishment or an establishment similar thereto; and clause (d) requires verification as to whether the work in that establishment is sufficient to employ considerable number of wholetime workmen. The list is not exhaustive. The appropriate Government may also take into consideration other relevant factors of the nature enumerated in sub-section (2) of Section 10 before issuing notification under Section 10 (1) of the CLRA Act. 62. Therefore, it would be appropriate to record other factors advanced by parties. 63. However, before we delve into these factors, it would be imperative for us to analyse the CWC's relentless reliance up....
X X X X Extracts X X X X
X X X X Extracts X X X X
....occupied by establishment in respect of which the appropriate Government under the said Act is the Central Government. This clearly indicates that the Central Government had not adverted to any of the essentials, referred to above, except the requirement of consultation with the Central Advisory Board. Consideration of the factors mentioned above has to be in respect of each establishment, whether individually or collectively, in respect of which notification under sub-section (1) of Section 10 is proposed to be issued. The impugned notification apart from being an omnibus notification does not reveal compliance with sub-section (2) of Section 10. This is ex facie contrary to the postulates of Section 10 of the Act. Besides, it also exhibits non-application of mind by the Central Government. We are, therefore, unable to sustain the said impugned notification dated 9-12-1976 issued by the Central Government." 66. This is, in fact, the only portion of the judgment to delve into the question of the validity of the impugned notification prohibiting the deployment of contract labour, passed under Section 10 (1) of the Act. It is noted that in SAIL, there lay no material on record bef....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mission") submitted its report mentioning about the existence of an intermediary named "jobber" and recommended certain measures to reduce the influence of the "jobber". Nothing substantial turned on that. In 1946, the Rege Committee noted that in India contractors would either supply labour or take on such portions of work as they could handle. The Committee pointed out, "whatever may be the grounds advanced by employers, it is to be feared that the disadvantages of the system are far more numerous and weightier than the advantages"; though the Rege Committee recognized the need for contract labour yet urged for its abolition where it was possible and recommended regulating conditions of service where its continuance was unavoidable. In 1956, the Second Planning Commission (of which the then Prime Minister Pandit Jawahar Lal Nehru was the Chairman) observed that in the case of contract labour the major problems relate to the regulations of working conditions and ensuring them continuous employment and for these purposes suggested that it was necessary to: "(a) undertake studies to ascertain the extent and the nature of the problems involved in d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The employer-member stated, in passing, that other similar depots run by both state as well as private operators outsource their labour component, and that this is the prevailing practice. Furthermore, he states that the contract is a works contract and not a labour contract. 77. Therefore, the employer-member was of the opinion that the ICD at Patparganj does not fulfil the requirements of Section 10 (2) (b) and 10 (2) (c) for the passing of a notification under Section 10 (1). 78. Following the noting of the dissent by the employer-member, the CACLB's MoM observes that the dissenting note was taken into account, but could not be agreed with due to the issue of revocation of license being a hypothetical one and that the CCI carries out similar work by the deployment of regularised workmen. 79. We agree with the findings of the CACLB on the issue of revocability of the CWC's license as being a mere assumption and not being one of significant gravity to sway the findings of the board on whether work carried out could be considered perennial. Retrospectively, about two decades hence, we see that neither the terminal at Dadri, nor the claimed instability attributed to the rev....