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TMI Blog1974 (3) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... 16/73, and 1906 or 1973. - - - Dated:- 20-3-1974 - Ray, A.N. (CJ), Reddy, P. Jaganmohan, Dwivedi, S.N.,Goswami, P.K. And Sarkaria, Ranjit Singh,JJ. JUDGMENT 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 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, principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 establishment 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10 of the Act is to find out whether 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 unconst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lementation 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout 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 pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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