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LAWS(BOM)-2024-4-3

HIGH COURT OF BOMBAY

Coram : Sandeep V.Marne J.

Decided On : April 02, 2024

Appeal Type : WRIT PETITION NO.4701 OF 2005

Appellant(s) :

Milind Nandkumar Kulkarni

Respondent(s) :

Kirloskar Ebara Pumps Ltd

Advocate(s) :

SEEMA SARNAIK, KIRAN S.BAPAT, Gaurav S.Gawande

Equivalent Citation :

LAWS(BOM)-2024-4-3

Referred Judgement(s) :
- Balwant Rai Saluja Vs. Air India Ltd, [2014 9 SCC 407] [Referred To]
Referred Act(s) :
- Constitution Of India, Art.227
- Industrial Disputes Act, 1947

Judgment :

(1.) These two Petitions are filed by contract workers of Kirloskar Ebara Pumps Ltd. challenging the
common Award dtd. 6/11/2004 passed by the Presiding Officer, Labour Court, Sangli, rejecting the
respective References by holding that there is no employer-employee relationship between Petitioners
and the Respondent and further holding that the respective contractors of the Petitioners were
necessary parties to the References, in whose absence the References could not be adjudicated. The
workers involved in Writ Petition No.4701 of 2005 were contract workers of M/s. Shree Datta
Agencies, whereas the workers involved in Writ Petition No.4702 of 2005 were engaged by M/s.
Allied Engineering Services. The workers however did not implead the said contractors nor sought any
relief against them and therefore the Labour Court has held that adjudication of References relating to
termination of the workers against RespondentKirloskar Ebara Pumps Ltd. was impermissible on
account of absence of employer-employee relationship. The References are therefore held to be not
maintainable and are accordingly rejected.

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(2.) The factual background of the case is that - Respondent-Kirloskar Ebara Pumps Limited is
engaged in manufacture and sale of pumps. It has its Head Office at Pune and factory at Sawantpur
Vasahat, Kirloskarwadi, District Sangli. It is the case of the Petitioners that they were engaged by the
Respondent since the year 1995 for performing various jobs in machine and assembly Sec. and that
they performed work of perennial nature completing more than 240 days of service in each calendar
year. That they were falsely shown to have been engaged through contractors even though the
Respondent-Company used to directly control their service conditions as well as allotting work to
them and supervising their work. It is their case that Petitioners in Writ Petition No.4701 of 2005 were
illegally shown as workers of contractor M/s. Shree Datta Agencies whereas the Petitioners in Writ
Petition No.4702 of 2005 were shown as workers engaged by the contractor M/s. Allied Engineering
Services.

(3.) Since the workers were denied benefit of permanency, Complaint (ULP) No.699 of 2001 was
filed before the Industrial Court, Kolhapur seeking permanency. In that Complaint, interim order was
passed on 21/6/2001 directing the Respondent to maintain status quo with regard to services of the
Petitioners. The Interim Application for stay was however rejected by Industrial Court, Kolhapur by
order dtd. 27/8/2001. Immediately thereafter services of Petitioners were terminated by Respondent-
Company on 29/8/2001. Later, the Industrial Court dismissed the Complaint (ULP) No.699 of 2001
holding that there was no employer-employee relationship between the Petitioners and Respondent.

(4.) Aggrieved by the terminations effected on 29/8/2001, Petitioners individually raised demands
before Conciliation Officer under the Industrial Disputes Act 1947. Upon failure of the conciliation
proceedings, reference order was made by the appropriate Government about termination and
reinstatement of Petitioners to Labour Court, Sangli. Petitioners accordingly filed their statements of
claim before the Labour Court, Sangli. Petitioners also filed Interim Applications for seeking interim
stay on termination. Respondent-Company resisted both by filing Reply to the Interim Applications as
well as Written Statement to the Statements of Claim. Petitioners examined themselves as witnesses
and the Respondent-Company also examined Mr. Anand Gumaste as its witness.

(5.) After considering the pleadings and evidence on record, the Labour Court delivered two separate
Awards on 6/11/2004 and held that there was absence of employer-employee relationship between the
Petitioners and Respondent-Company. It further held that the contractors Shree Datta Agencies and
M/s. Allied Engineering Services were necessary parties, in whose absence, references could not be
decided. All the references were therefore treated as not maintainable. This is how the references
initiated at the behest of the Petitioners came to be rejected.

(6.) Petitioners have filed the present Petitions challenging the Awards dtd. 6/11/2004. The Petitions
came to be admitted by order dtd. 15/9/2005. By order dtd. 1/12/2015, this Court granted liberty to the
Petitioners to withdraw the amount deposited in their respective Provident Fund Accounts.

(7.) Ms. Sarnaik, the learned counsel appearing for Petitioners would submit that the Labour Court
has erred in holding that employer-employee relationship could not be established between Petitioners
and Respondent Company. She would take me through compilation of documents, which were

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produced before Labour Court to prove complete supervision and control by the Respondent-Company
over the workers. She would submit that Provident Fund of the workers was deducted and deposited
by Respondent-Company that whenever accident occurred, the accident report was prepared by
Respondent-Company. That assignment of work to Petitioners was always decided by Respondent-
Company. She would take me through various shift charts to prove allocation of work to the workers
by the RespondentCompany. She would also place reliance on various communications between
Kirloskar Ebara Pumps Limited and Kirloskar Brothers Limited in which various materials/equipment
were sent alongwith the Petitioners. That Machines Non-Conformity Reports again demonstrate
supervision of work of the workers by Respondent-Company. She would also place reliance on initial
engagement of one of the workers by Respondent-company through Employment Exchange.

(8.) Ms. Sarnaik would submit that the above documents placed before the Labour Court proved
beyond any iota of doubt that there was complete supervision and control over Petitioners by
Respondent-Company. That they were shown to have been engaged through contractors only on paper
with a view to avoid liability under the Labour Laws. That for all practical purposes, Petitioners were
always the employees of Respondent-Company. That their services were terminated only on account
of vacation of interim stay by the Industrial Court and such termination was ordered to be effected by
the Respondent-Company. She would take me through various findings recorded by the Labour Court
to demonstrate as to how existence of employeremployee relationship ought to have inferred by the
Labour Court. Ms. Sarnaik would therefore pray for setting aside the Awards passed by the Labour
Court.

(9.) Per Contra, Mr. Bapat, the learned senior advocate appearing for the Respondent-Company would
oppose the Petitions and support the Awards passed by the Labour Court. He would submit that there
are specific admissions in the evidence given by the concerned workmen of they being employees of
contractors. That in the light of such specific admissions, the claim of Petitioners of they being
employees of Respondent- Company was belied before the Labour Court. He would submit that the
Labour Court has recorded its findings by applying its mind to the entire evidence on the record. That
the findings recorded by the Labour Court do not suffer from the vice of perversity so as to warrant
interference by this court in exercise of writ jurisdiction. Mr. Bapat would further submit that since the
issue of existence of employer employee relationship is already concluded while deciding Complaint
(ULP) No.699 of 2001 by the Industrial Court, the Labour Court has rightly answered the references in
negative. He would rely upon the judgment of this court in Kalyan Dombivli Municipal Corporation
vs. Municipal Labour Union, 2023 SCC OnLine Bom 2266. Mr. Bapat would pray for dismissal of the
Petition.

(10.) Rival contentions of the parties now fall for my consideration.

(11.) The References in the present Petitions were made by the appropriate Government at the behest
of the Petitioners for adjudication of disputes relating to their termination and reinstatement. One of
the termination letters is placed on record in Writ Petition No.4701 of 2005. The said letter dtd.
30/8/2001 is issued by Shree Datta Agencies to Shri Sampath Mahadev Sawant. The letter states that

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the contract of Shree Datta Agencies with Respondent-Company was over and that the contractor did
not have any work available for the workers and accordingly the services were terminated by paying
an amount of Rs.24,440.00, which consisted of retrenchment compensation, gratuity and one month
notice. Thus the termination letters are issued by the contractors and not by Respondent-Company.
Despite this, Petitioners raised disputes with regard to their termination against Respondent-Company
and not against the contractors who had terminated their services. This is how Petitioners took the risk
of getting their grievance relating to termination adjudicated against Respondent-company, even
though termination letters were issued to them by their respective contractors. For Petitioners to
succeed in their claims, it therefore became necessary for them to establish existence of employer-
employee relationship with Respondent Company. The Labour Court, after considering the evidence
on record, has arrived at a conclusion that Petitioners could not establish employer-employee
relationship with the Respondent-Company.

(12.) Ms. Sarnaik has relied on several documents to establish existence of employer employee
relationship. I have gone through those documents, which are produced with a view to prove the test of
control and management. However, control and management is not the only test to be satisfied for
establishing employer-employee relationship. The law relating to establishment of employer employee
relationship is crystallized in the judgment of the Apex Court in Balwant Rai Saluja vs. Air India
Limited, (2014) 9 SCC 407, in which the Apex Court has prescribed following six factors for
establishment of employer-employee relationship in paragraph 65 of the judgment as under:

"65. Thus, it can be concluded that the relevant factors to be taken into consideration to
establish an employer-employee relationship would include, inter alia:

(i) who appoints the workers;

(ii) who pays the salary/remuneration;

(iii) who has the authority to dismiss:

(iv) who can take disciplinary action;

(v) whether there is continuity in service; and

(vi) extent of control and supervision i.e. whether there exists complete control and
supervision.

As regard extent of control and supervision, we have already taken note of the observations
in Bengal Nagpur Cotton Mills case (2011) 1 SCC 635, International Airport Authority of India case
(2009) 13 SCC 374 and Nalco case (2014) 6 SCC 756."

(13.) True it is that the Labour Court did not have the benefit of judgment of the Apex Court in
Balwant Singh Saluja (supra), which has been delivered in the year 2014. However, considering the
material placed on record by the Petitioners and the evidence led by them, it cannot be said that the
above tests are satisfied by them for establishment of employer-employee relationship. Perusal of the

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cross-examination of Petitioners would leave no manner of doubt that there was no employer-
employee relationship with Respondent-Company. By way of illustration, cross-examination of Shri
Shahaji Shankar Farane recorded in Reference (IDA) No.47 of 2002 is reproduced below:

"Cross-examination by Shri.R.G. Bhakare, Adv.

In my affidavit I have mentioned that I was working as Fiter however I do not possessing
certificate of I.T.I. It is true that I have not produced any document to show that I was in the
employment W.E.F. 1/6/96. I do not know whether I have produced any document to show that I was
employee of the Ist part company. It is not true that I was employee of the Ist part company. It is not
true that I was employed by contractor Datta Agency and I was working under the supervision and
control of Shri. Pujari of Datta Agency. It is not true that Pujari used to me pay wages. It is true that
Shri Pujari of Datta Agency used to look after our sanctioning leave, arrangement of shifts, granting
our holidays and other our services. It is true that for us there was a separate cards whereas for the
regular employees of the Ist party there used to be separate attendance register. It is not true that the
uniform colour as regards ourselves and employees of the Ist party company was different.

It is true that the Ist party co. manufactures Fuel pumps for Chemical factories. It is true
that in the work of manufacturing Pump there should not be any slightest mistake, and therefore it is
true that the Ist party has employed highly skilled employees on his muster roll. I do not know whether
the Ist party co. has appointed contractors to get the work done which is of temporary and misc.
nature. It is not true that the nature of work which is done us and nature of work done by Ist party
employees was different. It is not the true that there used to be separate different facilities and service
condition to the regular employees of the Ist party which are not provided with us. It is true that the
supervisors officers of the Ist party were supervision and controlling the work of its regular employees
only.

It is true that in case we are required to go the near by Kirloskar Bro. alongwith regular
employees of the Company the Ist party used to give a letter in which the name of the regular
employees as well as ourselves names are mentioned. It is true that we filed a complaint in the
Industrial court for absorbing us permanently in the Ist party company. It is true that from the date of
our appointment till we approached industrial court we never made request or complaint to the Ist
party company to absorb its employment. It is true that the said complaint was dismissed by the
Industrial court, Kolhapur.

I do not know whether while the complaint in Industrial court pending we made any
application to the Labour office. We have filed the present references to become permanent in the
employment of the Ist party company. I am not in the employment from 29/8/2001. My services were
terminated by the company. But I did not receive any letter from the Ist party company about my
resignation. I received my legal dues amounting Rs.27,000.00 by post, by cheque. There was a letter
indicating termination of my services along with cheque. It is true that on the said termination letter
was on the letter head of Datta Agency and the same was signed by the Pujari, similarly the cheque
was alse signed by Shri Pujari. After receipt of the termination letter and cheque we did not inform the

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Ist party that the said letter is not acceptable to us.

It is true that through General Mazdoor Union we made application to the Govt. Labour
office to abolish the contract system prevailing in the Ist party company. I do not know what happened
to the said application. It is true that the pending these references we became member of Kamgar
Kalyan Sena, Tasgon, It is true that through the said Union we demonstrated and resorted to a hunger
strike before the gate of the Ist party company. It is not true that our said act were to pressurize the Ist
party company.

3 It is not true that the Ist party involved unable to us get benefit of P.F.made temporary
arrangement to get deposited the contribution to the P.F Trust of the company. It is true that Shri
Pujari used to deduct our contribution from our wages and passed on to the Ist party to get it deposited
with the P.F. company Act, Pune. It is not true that we were not directly connected with the work of
the Ist party company. It is not true that my statement in affidavit that the officers of the Ist party used
to supervise our work is false. It is not true that my statement in affidavit that I was working on
permanent pest and that shift arrangement used to be made by the officers of the company is false. It is
not true that my statement in my affidavit that the company pay me wages and contract is bogus is
false, It is not true that just to extract huge amount from the Ist party and to harass the Ist party
company we have filed this false references.

No. R.E."

(14.) Thus the above cross-examination would indicate that the employeremployee relationship
existed between the contractor and concerned workers.

Though Ms. Sarnaik has made strenuously efforts to demonstrate that supervision and
control over the workers was that of Respondent-Company, Petitioners admitted during the course of
their cross-examination that the Supervisors and Officers of Respondent-Company used to supervise
and control the work of regular employees only and that Shri Pujari of M/s. Shree Datta Agencies used
to look after sanctioning of leave, arrangement of shifts, granting of holidays, etc relating to
Petitioners.

(15.) In fact, it appears that Petitioners first made an attempt to seek abolition of contract labour
system by filing complaint through their Union. The very fact that demand was made for abolition of
contract labour would indicate that Petitioners were never direct employees of RespondentCompany.
Such application filed by Petitioners through their Union would contain an implicit admission that
they were contract workers engaged by the contractors.

(16.) Though deduction of Provident Fund contribution by RespondentCompany is highlighted for

establishment of employer-employee relationship, this aspect is sufficiently explained. It appears that
the contractors had engaged less than 20 workers and were not equipped with "˜Code' for deposit of
Provident fund contributions and therefore the contractors used to deduct Provident Fund contributions
from the concerned workers and used to hand it over to Respondent-Company for being deposited
with the office of Provident Fund. This aspect is again admitted by one of the Petitioners in the cross-

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examination. Therefore, mere deposit of Provident Fund contribution in respect of Petitioners by

Respondent-Company did not ipso facto made them direct employees of the Respondent-Company.

(17.) Reliance of Ms. Sarnaik on various other documents such as accident reports, shift charts, etc.
are not sufficient to prove establishment of employer employee relationship. If a contract worker
suffers an accident in the factory premises, the company is bound to prepare a report and provide
necessary medical treatment to that worker. The same would however not make that worker a direct
employee of the company. Similarly mere occasional shift allotment/placement by Respondent for
better utilization of manpower, again would not make Petitioners employees of the Respondent-
Company. Once a contractor places its workers at the disposal the principal employer, it may happen
that for better output, the principal employer gives certain instructions to the workers of the
contractors. This issue has been dealt with by this court in its judgment in Kalyan Dombivli Municipal
Corporation (supra) where mere supervision of work of contract workers engaged for collection and
disposal of municipal solid waste by an official of Municipal Corporation is not held to be sufficient
for establishment employer employee relationship.

(18.) Even if the test of supervision and control is held to be proved by giving any benefit of doubt to
the Petitioners, they are unable to satisfy the balance five tests. There is no appointment letter on
record issued by the RespondentCompany. The salary/remuneration is always paid by the contractor.
There is nothing on record to indicate that Petitioners were ever dismissed or subjected to disciplinary
action by Respondent-Company. This is not a case where same worker is continued through different
contractors over a period of years. In my view therefore, Petitioners have failed in discharging a
burden of proving existence of employer-employee relationship in the facts and circumstances of the
present case.

(19.) After considering the overall conspectus of the case, I am of the view that no patent error can be
traced in the findings recorded by the Labour Court. Petitioners took a calculated risk of getting the
dispute relating to their termination adjudicated against Respondent-Company, who was not their
employer. They did not implead the contractors who used to pay them remuneration and also who
terminated their services, as party Respondents to References. Though it is sought to be suggested that
the Reference order is made by the appropriate Government and that the Petitioners did not have any
control over the entity against whom the reference was directed, the entity against whom demand was
initially raised by Petitioners assumes importance. Petitioners never demanded anything against the
contractors and their demands were directed only against Respondent-Company. Petitioners are
therefore clearly responsible for non-impleadment of the contractors as party Respondents to the
disputes. Having taken the risk of seeking adjudication of references only qua Respondent-Company,
Petitioners must face the consequences arising out of non-establishment of employeremployee
relationship with Respondent-Company. It therefore cannot be stated that the findings recorded by the
Labour Court are so perverse that this Court's interference, in exercise of jurisdiction under Article 227
of the Constitution of India, is warranted.

(20.) I therefore do not find any valid ground to interfere in the wellreasoned Awards passed by the

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Labour Court. Both the Writ Petitions are devoid of merits and are accordingly dismissed without any
orders as to costs. Rule is discharged.

(21.) In view of the dismissal of both the Writ Petitions, nothing would survive in the Civil
Applications and the Interim Application and the same are disposed of accordingly.

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