We make it clear that we do not intend to pass any order
which will have any effect on the service conditions of the
departmental labourers employed by the respondent/Corporation.
However, it is to be noted that the High Level Committee itself has
recommended discontinuing practice of departmental labourers. The
High Level Committee has noticed that there were about 370
labourers in the respondent/Corporation who had got salaries of
more than Rs.Four Lacs per month. The Committee has, therefore,
recommended that they should be offered suitable VRS and this
cadre be gradually phased out. The Committee has also
recommended that there should be a cap on the incentive system,
whereby no labourer is allowed to work more than 1.25 times the
daily work. It is worth mentioning here that, by now it is a settled
law that the incentive does not amount to a condition of service and
is an additional payment to be made to an employee in addition to
the salary and wages payable to him as per the service conditions.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
P.I.L. No.84 OF 2014
COURT ON ITS OWN MOTION ........ PETITIONER
// VERSUS //
Union of India,
CORAM : B. R. GAVAI &
P. N. DESHMUKH, JJ.
DATE : 20/11/2015.
Citation: 2016(2) MHLJ647
1. One of the learned Judges of this Court noticed a
Newspaper item in the daily “The Times of India”, wherein it was
reported that, in the depots run by the Food Corporation of India
(hereinafter referred to as “the Corporation”), some of the
departmental loaders were earning as much as Rs.4,00,000/ p.m.
The News item also reflected abuse of Government funds, inefficiency
and reluctance on the part of the Authorities to act sternly against
various persons who have indulged in siphoning of the Government
funds. It was also reported that some of the loaders of the
Corporation clandestinely engage the services of other persons by
paying paltry amount to them, when under the incentives Scheme
they are getting huge amount from the Food Corporation of India. It
was also alleged that this was done in collusion with the Officers of
the Corporation. The learned Judge of this Court, therefore, directed
the said News item to be treated as a 'Public Interest Litigation'.
Accordingly, the present P.I.L. has been registered.
2. Taking into consideration importance of the matter, we
requested Mr.S.P.Bhandarkar, learned Counsel to assist us as an
amicus curiae. Mr. Bhandarkar graciously accepted our request and
with great labour and research, has assisted us in the present petition.
3. In response to the notice issued by this Court, the
respondents have also filed their response on an affidavit.
4. Heard Mr.S.P.Bhandarkar, learned amicus curiae,
Mr.Y.P.Rao, learned Counsel for respondent no.3,
Mr.K.H.Deshpande, learned Senior Advocate for respondent nos. 4 to
6 and Mr.V.P.Marpakwar, learned Counsel for the Interveners.
Mr.V.P.Marpakwar, learned Counsel submitted that the intervention
is filed on behalf of the Union of departmental labourers only to
submit that their service conditions cannot be changed to their
detriment.
5. Though the respondents have denied the allegations
regarding large scale engagement of proxy labourers and involvement
of senior Officers in the said racket, perusal of the affidavitinreply
filed by the respondents itself would reveal that, atleast some of the
allegations which are made are not without substance.
6. Affidavitinreply filed on behalf of respondent nos. 3 to 6
by Mr.Chandresh s/o. Baburao Thakre, Area Manager of Food
Corporation of India at Nagpur would reveal that it has found some
of the instances of engaging proxy labourers. The Corporation,
therefore, has already issued strict instructions vide letters
dt.20.2.2014 and 7.11.2014 to all the Field Offices directing them not
to allow any proxy labourer and has also instructed them to take
necessary disciplinary action wherever any such instance is found.
7. Be that as it may, the affidavitinreply filed as also the
material placed before us by the respondent/Corporation would
clearly show that huge payments are made to the departmental
labourers engaged by the Corporation. Nodoubt that we will be
happy if this trend progresses and every labourer in the country is in
a position to receive Rs.1.5 Lacs to Rs. Two Lacs per month by way
of wages. But the ground reality is that though the departmental
labourers engaged by the respondent/Corporation are getting an
amount of Rs.1.5 Lacs upwards per month, vast majority of the
labourers in the country remain unemployed and they are required to
live with meagre wages which are not at times in three figures.
8. We appreciate the stand taken by Mr.K.H.Deshpande,
learned Senior Advocate for respondent nos. 4 to 6 and Mr. Y.R.Rao,
learned Advocate for respondent no.3 in placing the entire factual
matrix before us. Mr.Rao fairly stated that, on account of certain
difficulties which are beyond the control of respondent/Corporation,
the respondent is required to unnecessarily incur the expenditure of
more than Rs. 1800 Crores per year.
9. Some of the difficulties expressed by the Corporation and
also noticed and pointed out to us by the learned amicus curiae
appear to be thus :
a) The Government of India has issued notifications in
respect of various depots for prohibition of employment of contract
labourers under the Contract Labour (Regulation and Abolition) Act,
1970 (hereinafter referred to as “ the said Act ”). It is submitted that,
on account of notifications issued prohibiting engagement of contract
labourers, the respondent has no other option than to engage the
services of departmental labourers. It is further submitted that though
the Corporation has approached the Government of India for
exemption under the provisions of Section 31 of the said Act, the
Central Government is sitting idle over it.
b) The Hon'ble Apex Court has directed equalisation of wages
payable to the labourers working in the various depots of the
Corporation on par with the wages of the employees at Calcutta Port
and the Godowns in Calcutta City Complex. It is submitted that
whenever wages of employees in the Calcutta Port and Calcutta City
complex are increased, ipso facto the wages of all the employees are
required to be increased.
c) Though size of the sacks which was originally 95 kg and
below has been now reduced to 50 kg. and below and the incentive
which was earlier payable at a higher rate is sought to be reduced,
the same cannot be implemented on account of departmental
labourers approaching the Industrial Courts.
d) It is submitted that though the wages payable to the
departmental labourers at all the depots are now identical and that
an attempt has been made by the respondent/Corporation to transfer
the departmental labourers from one depot to another, the
departmental labourers are refusing to join the services at the
transferred place on the ground that the said amounts to change in
the condition of service. It is submitted that, on account of this factor,
there is surplus of 1594 employees at various depots and on the other
than, there is deficit of 3180 labourers at other depots.
10. The respondent/Corporation had appointed one reputed
International firm namely M/s.Deloittee Consultancy for giving
certain suggestions for bringing out efficiency in the functioning of
the Corporation, which has submitted its report. The report is on the
basis of figures available in the financial year 201213. Perusal of the
report would reveal that, on an average 65 % of the yearly volume is
handled in the top 30% of the days. It is further stated therein that
average number of days when handling operation took place is 255.
It is further stated that, on an average, there was no work for 110
number of days.
11. The respondent/Corporation, in addition to the aforesaid
two systems, is also engaged in two other systems which are known
as “Direct Payment System” and “No work, no pay system”.
M/s.Deloitee Consultancy has done a comparative study of work done
through the departmental labourers and under the Contract system so
also the “Direct Payment system” and “No work and No pay system”.
The comparative handling costs for all the four systems are
mentioned in the report in paragraph 13, which are mentioned herein
thus :
Handling Cost for the year 2013-14
Departmental System 66.3
DPS 21.4
NWNP System 8.54
Contract Labour System 7.77
12. It could thus be seen that the handling cost for the
Departmental System is Rs.66.3, for DPS System – it is Rs.21.4, for
NWNP System – it is Rs.8.54 and for the Contract Labour System – it
is Rs.7.77.
13. M/s. Deloitte Consultancy has also made a comparative
study of time taken for loading and unloading of rakes and also for
demurrage/wharfage incurred by the Corporation. Insofar as the time
taken for loading and unloading is concerned, the result of the
comparative study is as under :
(No. of hours)
Labour type Loading
(201011)
Loading
(201112)
Unloading
(201011)
Unloading
(201112)
Departmental 13:13 14:38 19:25 22:01
Contract 11:46 11:11 13:40 16:06
Insofar as the demurrage/wharfage incurred by the
Corporation is concerned, the result of the comparative study is as
under :
S.No. Zone/Region 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
1 NEF Zone 826.6 899.5 1099.9 1961.3 2251.9 4510.3
2 East Zone 285.0 486.0 603.3 785.5 1385.3 2441.3
3 South Zone 185.5 226.9 553.0 695.8 1035.5 1961.9
4 North Zone 364.8 414.3 543.5 576.2 1681.5 1846.5
5 West Zone 629.5 587.5 1046.2 1222.1 2226.3 2490.7
G. Total 2273.4 2614.2 3845.9 5240.9 8580.5 13250.7
Details of result regarding comparative study in respect of
trend of detention of rakes and incurrence of demurrage at the
railheads and FCI owned siding are as under :
(20102012)
Railway siding Railway Siding Railhead Railhead
Labour type Avg.Detention
(in hrs)
Avg. Demurrage
paid (Rs./Rake)
Avg.
Detention (in
hrs.)
Avg.
Demurrage
paid (Rs./Rake)
Departmental 17.16 1,34,002 8.13 38,029
Contract 10.45 61,654 6.36 30,577
14. It could thus be seen that, so far as the speed of loading
and unloading is concerned, the Contract System is more efficient as
compared to the Departmental System. It could also be seen that
whereas the average demurrage paid is Rs.38,029/ per rake for the
Departmental System, it is Rs.30,577/ per rake for the Contract
System. It would thus be seen that, taking into consideration all the
aspects including cost, speed and demurrage, the Contract System is
much more beneficial to the Corporation as compared to the
Departmental System.
15. The Government of India, Ministry of Commerce Affairs,
Food and Public Distribution, Department of Food and Public
Distribution, New Delhi finding that the Corporation is plagued with
several functional and cost inefficiencies, which need to be removed
for efficient management of food grains and saving costs, had set up
a High Level Committee for removing the said inefficiency and giving
suggestions for efficient management of the Corporation and saving
costs vide order dt.20.8.2012. The High Level Committee was
consisting of the following persons :
___________________________________________________________
a) Shri Shanta Kumar, M.P. Chairman.
b) Chief Secretary, Govt. of Punjab or his representative Member.
c) Chief Secretary, Govt. of Chhattisgarh or his
representative Member.
d) Prof. G. Raghuram, Dean, IIM, Ahmedabad Member.
e) Dr.Ashok Gulati, Former Chairman, Commission for
Agricultural Costs & Prices, GOI Member.
f) Prof. Gunmadi Nancharaiah, Dean, School of
Economics, University of Hyderabad Member.
g) ChairmancumManaging Director, FCI Member &
Convener.
h) Shri Ram Sewak Sharman, Secretary (Electronics Special
& IT) Invitee (For
the use of
technology)
__________________________________________________________
16. The High Level Committee, after making elaborate study
and consulting various stakeholders, including the State
Governments, has prepared a detailed report and submitted it to the
Government of India on 19.1.2015. The said Committee has
specifically considered the issue related to the labourers. It will be
relevant to refer to paragraph no.3.6 of the said report, which is as
under :
“3.6. Issues related to Labour :
The new role and structure of FCI, as envisaged
above, raised a question of what would happen to large
number of workers currently working with FCI, directly or
indirectly. As indicated in Chapter 2, there are about one
lakh contract workers who work through contractors, and
they do the hardest job at market rates, which hovered
around Rs.10,000/ per month for the years 201213 and
201314.
In contract, the cost departmental labour turns
out to be 7 to 8 times higher than the contract labour as
given below :
Table : 3.4 Average Salaries of Workers per Month
Financial Year Average Salary (in Rs.)
(Cost per Worker per Month)
Departmental
System
DPS
System
NWNP
System
Contract
System
200910 38459 11606 n.a. n.a.
201011 53389 14390 6855 4260
201112 63763 15490 9835 5223
201213 71538 22124 3456 10149
201314 78549 22975 4062 9774
April to Nov.
2014
**79588 26606 n.a. n.a.
Note : Some of the cases where earnings exceed 4 lakhs,
include arrears of wage revision w.e.f. 1.1.2012.
*** This figure is not including the Other Account Heads
which form about 22% (as per the Accounts Division's
statement showing Dept. Salaries for Financial Year 2012
13) of the total emoluments paid to the Departmental
labour.
The Contract labour can easily be absorbed by
state governments or private sector, which ever agency takes
over the functions of FCI with respect to procurement,
stocking and movement. HLC recommends that their
conditions be improved by offering them better facilities.
However, there is an issue of departmental labour
of FCI for loading/unloading etc., which gets an average
salary of more than Rs.79,000/ per month (in 2014). This
is 78 times higher than what contract labour gets. There
were more than 370 persons in FCI labour that got salaries
of more than Rs.4 lakhs/per month. HLC has taken a serious
note of this, and FCI's system of so called incentives that
allows this. This practice needs to stop. With transfer of
much of storage and movement functions to states, this
departmental labour of FCI will become 'surplus. HLC
recommends that they be offered suitable VRS and this cadre
be gradually phased out. And to do that, first thing will be
to put a cap on the incentive system, where by no labour is
allowed to work more than say 1.25 times the daily work
agreed with Labour unions. Second, those depots where this
problem of departmental labour exists must be mechanized
on priority basis so that reliance on such labour reduces
substantially. Third, these depots should be denotified in
consultation with Labour Ministry.
With this new role of FCI, HLC believes that it
can play a pivotal role in ensuring that benefits of grain
management policies (from procurement to PDS) reach
larger number of farmers and consumers in a more cost
effective and sustainable manner, and food security is
guaranteed in a sustainable manner. ”
17. Perusal of the report would show that, on account of
practice of engaging different types of handling systems, there is
glaring disparity in the matter of payment, between the similarly
circumstanced workers. The workers who are doing the work
through contractors are getting approximately Rs.10,000/ p.m.;
whereas the salaries payable to the departmental labourers is
approximately Rs.80,000/ p.m. Not only this, but the affidavit filed
on behalf of the respondent/Corporation would reveal that the
payment of about Rs.Four Lacs which was referred in the daily “ The
Times of India ” was on account of arrears which were to be paid to
the departmental labourers for a period of 2½ years. However,
perusal of the affidavit would further reveal that on an average
payment made to the departmental labourers is to the tune of
Rs.1.41 Lacs per month. It is stand of the Corporation that higher
payment is on account of incentives. It is stated that the work is not
of perennial nature. It is further submitted that wherever provisions
of Section 10 of the said Act are made applicable, the Corporation is
left with no other alternative but to engage the services of
departmental labourers. It is, therefore, submitted that though salary
payable to the departmental labourers is fixed, whenever the railway
rakes arrive, the work is required to be undertaken through the same
departmental labourers, which results in payment of higher
incentives.
18. It could thus be seen from the report of experts appointed
by the Corporation as well as the High Level Committee appointed by
the Government of India, that huge cost is required to be incurred by
the respondentCorporation by engaging labourers as per the system
of departmental labourers. It is submitted on behalf of the
Corporation itself that, in the event the provisions of Section 10 of
the said Act are not made applicable to its depots, the Corporation
would save approximately an amount of Rs.1800 crores per year.
The said figures are on the basis of the report conducted during the
financial year 201213. The figures in the present financial year may
even go higher.
19. It could thus clearly be seen that, on account of the
respondent/Corporation not being permitted to engage contract
labourers, the public exchequer is required to suffer huge losses to
the tune of Rs.1800 Crores or more.
20. We make it clear that we do not intend to pass any order
which will have any effect on the service conditions of the
departmental labourers employed by the respondent/Corporation.
However, it is to be noted that the High Level Committee itself has
recommended discontinuing practice of departmental labourers. The
High Level Committee has noticed that there were about 370
labourers in the respondent/Corporation who had got salaries of
more than Rs.Four Lacs per month. The Committee has, therefore,
recommended that they should be offered suitable VRS and this
cadre be gradually phased out. The Committee has also
recommended that there should be a cap on the incentive system,
whereby no labourer is allowed to work more than 1.25 times the
daily work. It is worth mentioning here that, by now it is a settled
law that the incentive does not amount to a condition of service and
is an additional payment to be made to an employee in addition to
the salary and wages payable to him as per the service conditions.
21. The Committee has also recommended mechanisation of
depots on priority basis so that reliance on such labourers reduces
substantially. The Committee has also recommended denoficiation in
consultation with Labour Ministry. It is pertinent to note that though
the Central Government has made applicable provisions of Section 10
of the said Act to some of the depots, there is no notification issued in
respect of various other depots and at such depots including various
depots in the State of Maharashtra, the respondent/Corporation is
engaging services of contract labourers.
22. We fail to understand as to why when the High Level
Committee appointed by the Government of India has issued various
recommendations for streamlining functioning of the
respondent/Corporation and bringing efficiency in it, the
Government of India has not taken any steps, though almost a period
of 11 months has lapsed from the date of submission of the said
report.
23. At the cost of repetition, we make it clear that we are not
against the labourers getting handsome wages and incentives.
However, at the same time, the situation which permits glaring
disparities cannot be permitted to exist. On one hand there are
persons doing similar work getting Rs.10,000/ p.m., and, on the
other hand, there are 370 labourers working with the same
Corporation doing the same work who are getting an amount of
Rs.Four Lacs p.m (approximately). As already stated hereinabove, we
would be happy if every labourer in this country gets a salary of Rs.
Four Lacs or more. However, it is a ground reality that, for the same
work, one person gets an amount of Rs.Four Lacs and the another
person gets an amount of Rs.8,000/ to Rs.10,000/ p.m. We find
that such a position would also be violative of Constitutional
mandate. In a salary which one person gets i.e. an amount of
Rs.Four Lacs (approximately), 40 such other persons can be
accommodated in a country which is facing large scale
unemployment and the families of such 40 persons can be
maintained in that amount. It will not be out of place to refer to
Article 38 of the Constitution of India. Article 38 mandates the State
to strive to minimise inequality in income. The present situation
permits a huge difference in wages to be paid to two sets of
employees, doing same work.
24. We fail to understand as to why the Government of India
has not acted upon the report of the said High Level Committee for
denotifying the depots. We also fail to understand as to how the
provisions of Section 10 of the said Act could be made applicable to
some of the depots when the same are not made applicable to other
sets of depots, especially when the work being carried out is of the
same nature. It will be relevant to refer to the provisions of Section
10 of the said Act.
10. Prohibition of employment of contract labour.
(1) Notwithstanding anything contained in this Act,
(but, subject to the provisions of Clause (c) of subsection
(5) of Section 1), 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 subsection (1)
in relation to an establishment, the appropriate
Government shall have regard to the conditions of
work and benefits provided for the contract labour in
that establishment and other relevant factors, such as
(a) whether the process, operation or other work is
incidental to, or necessary for the industry, trade,
business, manufacture or occupation that is carried on
in the establishment;
(b) whether it is of 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;
(c) whether it is done ordinarily through regular
workmen in that establishment or an establishment
similar thereto;
(d) whether it is sufficient to employ considerable
number of wholetime workmen.
Explanation. If a question arises whether any process
or operation or other work is of perennial nature, the
decision of the appropriate Government thereon shall be
final.
25. Before issuing notification u/s.10 (1) of the said Act, the
appropriate Government is bound to take into consideration the
factors which are mentioned in subsection 2 of the said Act. It will
be relevant to refer clause (b) of subsection 2 (cited supra), which
requires to take into consideration as to whether the work is of
perennial nature i.e. it is of sufficient duration having regard to the
nature of industry, trade, business, manufacture or occupation
carried on in the establishment. As could be seen from the report of
M/s.Deloittee Consultancy, on an average 65 % of the yearly volume
is handled in the top 30 % of the days. It could further be seen that
whereas handling operation took place on 255 days i.e. on an
average, there was no work for 110 number of days. It is pertinent to
note that availability of work depends on arrival of railway rakes at
the depots. Number of rakes arriving at a particular depot may differ
from depot to depot and from time to time. We, therefore, prima
facie find that it cannot be said that the work is of perennial nature.
26. Clause (c) of Section 10 (2) of the said Act (cited supra)
requires the appropriate Authority to consider as to whether the work
is done ordinarily through regular workman in that establishment or
an establishment similar thereto. As has been pointed out
hereinabove, the Government of India has notified some of the
depots and not all the depots which are run by the said Corporation.
We fail to understand as to why the work at some of the depots
cannot be permitted to be done by the contract labourers when, at
the other depots, when the nature of work is the same and the
employer is also the same, the work is done through the Contract
Labour System. It is pertinent to note that M/s.Deloitt Consultancy
has also done a comparative study in respect of similar work having
been done by the similarly circumstanced employees like the
employees of the Corporation. Report of M/s.Deloitt Consultancy
states that except the Food Corporation of India, in all other similar
establishments, the work is being executed by the Contract Labour
System. We are of the view that when the expert's report and the
report of the High Level Committee have brought all the above
aspects to the notice of the Government of India, the Government of
India ought to have taken necessary steps for denotifying the depots
of the Corporation which are covered u/s.10 of the said Act.
27. We also fail to understand as to why the departmental
labourers should not be transferred from one depot to another depot.
As could be seen from the Judgment of the Apex Court in the case of
Food Corporation of India Worker's Union .vs. Food Corporation
of India and Others (Writ Petition (Civil) No.222 of 1984, dated
20th July, 1990) reported in 1990IILLN664/1990 (Supp) SCC 296,
it was the contention of the said Corporation that there cannot be
similar wages at different depots since services of the departmental
labourers were not transferable. The said contention has been
rejected by Their Lordships of the Apex Court. By now it is a settled
principle of law that transfer is an incidence of service. When wages
and all other service conditions of departmental labourers working at
different depots are identical, we see no reason as to why their
services could not be transferred from one depot to another. As has
been submitted by the Corporation, 1594 departmental labourers are
getting salary without any work; whereas at some of the depots,
there is huge deficiency of labourers.
28. We further also fail to understand as to why the Food
Corporation of India should not be in a position to change the
amount of incentives to be paid to the departmental labourers per
sack. When the size of the sacks has been reduced from 95 kg and
below to 50 kg and below, there is no reason as to why there should
not be proportionate reduction in the amount of incentives paid per
sack.
29. In that view of the matter, we find that it will be in the
interest of justice to issue certain directions to the
respondent/Corporation as well as the Union of India so as to ensure
that huge amount of public exchequer is not wasted and can be
utilized for better purposes.
30. In that view of the matter, we dispose of the present
Public Interest Litigation by passing the following order.
(i) The Government of India is directed to decide
the representation made by the Food Corporation of India
for grant of exemption under the provisions of Section 31
of the said Act within a period of one month from today,
in the light of observations made by us hereinabove within
a period of one month from today.
(ii) The Government of India shall decide the issue
regarding denotification of the depots of the Food
Corporation of India, in respect of which notification is
issued u/s.10 of the said Act, within a period of six months
from today, in the light of observations made by us
hereinabove and the report of M/s.Deloitt Consultancy
and the report of High Level Committee appointed by the
Government of India itself.
(iii) We clarify that the respondent/Food
Corporation of India would be entitled to transfer the
services of departmental labourers from one depot to
another subject to protecting their salary and all other
service conditions.
(iv) We also clarify that the respondent/
Corporation would be at liberty to implement its policy of
change in the Scheme of incentives.
(v) The Government of India shall also take a
decision regarding abolition of system of departmental
labourers in a phased manner or absorbing their services
in other establishments as recommended by the High
Level Committee.
31. We express our gratitude to Mr.S.P.Bhandarkar, learned
amicus curiae, Mr.K.H.Deshpande, learned Senior Advocate,
Mr.Y.P.Rao learned Counsel and Mr.V.P.Marpakwar, learned Counsel
for assisting this Court in deciding the issue in question, which will
have an effect of saving huge public exchequer.
Print Page
which will have any effect on the service conditions of the
departmental labourers employed by the respondent/Corporation.
However, it is to be noted that the High Level Committee itself has
recommended discontinuing practice of departmental labourers. The
High Level Committee has noticed that there were about 370
labourers in the respondent/Corporation who had got salaries of
more than Rs.Four Lacs per month. The Committee has, therefore,
recommended that they should be offered suitable VRS and this
cadre be gradually phased out. The Committee has also
recommended that there should be a cap on the incentive system,
whereby no labourer is allowed to work more than 1.25 times the
daily work. It is worth mentioning here that, by now it is a settled
law that the incentive does not amount to a condition of service and
is an additional payment to be made to an employee in addition to
the salary and wages payable to him as per the service conditions.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
P.I.L. No.84 OF 2014
COURT ON ITS OWN MOTION ........ PETITIONER
// VERSUS //
Union of India,
CORAM : B. R. GAVAI &
P. N. DESHMUKH, JJ.
DATE : 20/11/2015.
Citation: 2016(2) MHLJ647
1. One of the learned Judges of this Court noticed a
Newspaper item in the daily “The Times of India”, wherein it was
reported that, in the depots run by the Food Corporation of India
(hereinafter referred to as “the Corporation”), some of the
departmental loaders were earning as much as Rs.4,00,000/ p.m.
The News item also reflected abuse of Government funds, inefficiency
and reluctance on the part of the Authorities to act sternly against
various persons who have indulged in siphoning of the Government
funds. It was also reported that some of the loaders of the
Corporation clandestinely engage the services of other persons by
paying paltry amount to them, when under the incentives Scheme
they are getting huge amount from the Food Corporation of India. It
was also alleged that this was done in collusion with the Officers of
the Corporation. The learned Judge of this Court, therefore, directed
the said News item to be treated as a 'Public Interest Litigation'.
Accordingly, the present P.I.L. has been registered.
2. Taking into consideration importance of the matter, we
requested Mr.S.P.Bhandarkar, learned Counsel to assist us as an
amicus curiae. Mr. Bhandarkar graciously accepted our request and
with great labour and research, has assisted us in the present petition.
3. In response to the notice issued by this Court, the
respondents have also filed their response on an affidavit.
4. Heard Mr.S.P.Bhandarkar, learned amicus curiae,
Mr.Y.P.Rao, learned Counsel for respondent no.3,
Mr.K.H.Deshpande, learned Senior Advocate for respondent nos. 4 to
6 and Mr.V.P.Marpakwar, learned Counsel for the Interveners.
Mr.V.P.Marpakwar, learned Counsel submitted that the intervention
is filed on behalf of the Union of departmental labourers only to
submit that their service conditions cannot be changed to their
detriment.
5. Though the respondents have denied the allegations
regarding large scale engagement of proxy labourers and involvement
of senior Officers in the said racket, perusal of the affidavitinreply
filed by the respondents itself would reveal that, atleast some of the
allegations which are made are not without substance.
6. Affidavitinreply filed on behalf of respondent nos. 3 to 6
by Mr.Chandresh s/o. Baburao Thakre, Area Manager of Food
Corporation of India at Nagpur would reveal that it has found some
of the instances of engaging proxy labourers. The Corporation,
therefore, has already issued strict instructions vide letters
dt.20.2.2014 and 7.11.2014 to all the Field Offices directing them not
to allow any proxy labourer and has also instructed them to take
necessary disciplinary action wherever any such instance is found.
7. Be that as it may, the affidavitinreply filed as also the
material placed before us by the respondent/Corporation would
clearly show that huge payments are made to the departmental
labourers engaged by the Corporation. Nodoubt that we will be
happy if this trend progresses and every labourer in the country is in
a position to receive Rs.1.5 Lacs to Rs. Two Lacs per month by way
of wages. But the ground reality is that though the departmental
labourers engaged by the respondent/Corporation are getting an
amount of Rs.1.5 Lacs upwards per month, vast majority of the
labourers in the country remain unemployed and they are required to
live with meagre wages which are not at times in three figures.
8. We appreciate the stand taken by Mr.K.H.Deshpande,
learned Senior Advocate for respondent nos. 4 to 6 and Mr. Y.R.Rao,
learned Advocate for respondent no.3 in placing the entire factual
matrix before us. Mr.Rao fairly stated that, on account of certain
difficulties which are beyond the control of respondent/Corporation,
the respondent is required to unnecessarily incur the expenditure of
more than Rs. 1800 Crores per year.
9. Some of the difficulties expressed by the Corporation and
also noticed and pointed out to us by the learned amicus curiae
appear to be thus :
a) The Government of India has issued notifications in
respect of various depots for prohibition of employment of contract
labourers under the Contract Labour (Regulation and Abolition) Act,
1970 (hereinafter referred to as “ the said Act ”). It is submitted that,
on account of notifications issued prohibiting engagement of contract
labourers, the respondent has no other option than to engage the
services of departmental labourers. It is further submitted that though
the Corporation has approached the Government of India for
exemption under the provisions of Section 31 of the said Act, the
Central Government is sitting idle over it.
b) The Hon'ble Apex Court has directed equalisation of wages
payable to the labourers working in the various depots of the
Corporation on par with the wages of the employees at Calcutta Port
and the Godowns in Calcutta City Complex. It is submitted that
whenever wages of employees in the Calcutta Port and Calcutta City
complex are increased, ipso facto the wages of all the employees are
required to be increased.
c) Though size of the sacks which was originally 95 kg and
below has been now reduced to 50 kg. and below and the incentive
which was earlier payable at a higher rate is sought to be reduced,
the same cannot be implemented on account of departmental
labourers approaching the Industrial Courts.
d) It is submitted that though the wages payable to the
departmental labourers at all the depots are now identical and that
an attempt has been made by the respondent/Corporation to transfer
the departmental labourers from one depot to another, the
departmental labourers are refusing to join the services at the
transferred place on the ground that the said amounts to change in
the condition of service. It is submitted that, on account of this factor,
there is surplus of 1594 employees at various depots and on the other
than, there is deficit of 3180 labourers at other depots.
10. The respondent/Corporation had appointed one reputed
International firm namely M/s.Deloittee Consultancy for giving
certain suggestions for bringing out efficiency in the functioning of
the Corporation, which has submitted its report. The report is on the
basis of figures available in the financial year 201213. Perusal of the
report would reveal that, on an average 65 % of the yearly volume is
handled in the top 30% of the days. It is further stated therein that
average number of days when handling operation took place is 255.
It is further stated that, on an average, there was no work for 110
number of days.
11. The respondent/Corporation, in addition to the aforesaid
two systems, is also engaged in two other systems which are known
as “Direct Payment System” and “No work, no pay system”.
M/s.Deloitee Consultancy has done a comparative study of work done
through the departmental labourers and under the Contract system so
also the “Direct Payment system” and “No work and No pay system”.
The comparative handling costs for all the four systems are
mentioned in the report in paragraph 13, which are mentioned herein
thus :
Handling Cost for the year 2013-14
Departmental System 66.3
DPS 21.4
NWNP System 8.54
Contract Labour System 7.77
12. It could thus be seen that the handling cost for the
Departmental System is Rs.66.3, for DPS System – it is Rs.21.4, for
NWNP System – it is Rs.8.54 and for the Contract Labour System – it
is Rs.7.77.
13. M/s. Deloitte Consultancy has also made a comparative
study of time taken for loading and unloading of rakes and also for
demurrage/wharfage incurred by the Corporation. Insofar as the time
taken for loading and unloading is concerned, the result of the
comparative study is as under :
(No. of hours)
Labour type Loading
(201011)
Loading
(201112)
Unloading
(201011)
Unloading
(201112)
Departmental 13:13 14:38 19:25 22:01
Contract 11:46 11:11 13:40 16:06
Insofar as the demurrage/wharfage incurred by the
Corporation is concerned, the result of the comparative study is as
under :
S.No. Zone/Region 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
1 NEF Zone 826.6 899.5 1099.9 1961.3 2251.9 4510.3
2 East Zone 285.0 486.0 603.3 785.5 1385.3 2441.3
3 South Zone 185.5 226.9 553.0 695.8 1035.5 1961.9
4 North Zone 364.8 414.3 543.5 576.2 1681.5 1846.5
5 West Zone 629.5 587.5 1046.2 1222.1 2226.3 2490.7
G. Total 2273.4 2614.2 3845.9 5240.9 8580.5 13250.7
Details of result regarding comparative study in respect of
trend of detention of rakes and incurrence of demurrage at the
railheads and FCI owned siding are as under :
(20102012)
Railway siding Railway Siding Railhead Railhead
Labour type Avg.Detention
(in hrs)
Avg. Demurrage
paid (Rs./Rake)
Avg.
Detention (in
hrs.)
Avg.
Demurrage
paid (Rs./Rake)
Departmental 17.16 1,34,002 8.13 38,029
Contract 10.45 61,654 6.36 30,577
14. It could thus be seen that, so far as the speed of loading
and unloading is concerned, the Contract System is more efficient as
compared to the Departmental System. It could also be seen that
whereas the average demurrage paid is Rs.38,029/ per rake for the
Departmental System, it is Rs.30,577/ per rake for the Contract
System. It would thus be seen that, taking into consideration all the
aspects including cost, speed and demurrage, the Contract System is
much more beneficial to the Corporation as compared to the
Departmental System.
15. The Government of India, Ministry of Commerce Affairs,
Food and Public Distribution, Department of Food and Public
Distribution, New Delhi finding that the Corporation is plagued with
several functional and cost inefficiencies, which need to be removed
for efficient management of food grains and saving costs, had set up
a High Level Committee for removing the said inefficiency and giving
suggestions for efficient management of the Corporation and saving
costs vide order dt.20.8.2012. The High Level Committee was
consisting of the following persons :
___________________________________________________________
a) Shri Shanta Kumar, M.P. Chairman.
b) Chief Secretary, Govt. of Punjab or his representative Member.
c) Chief Secretary, Govt. of Chhattisgarh or his
representative Member.
d) Prof. G. Raghuram, Dean, IIM, Ahmedabad Member.
e) Dr.Ashok Gulati, Former Chairman, Commission for
Agricultural Costs & Prices, GOI Member.
f) Prof. Gunmadi Nancharaiah, Dean, School of
Economics, University of Hyderabad Member.
g) ChairmancumManaging Director, FCI Member &
Convener.
h) Shri Ram Sewak Sharman, Secretary (Electronics Special
& IT) Invitee (For
the use of
technology)
__________________________________________________________
16. The High Level Committee, after making elaborate study
and consulting various stakeholders, including the State
Governments, has prepared a detailed report and submitted it to the
Government of India on 19.1.2015. The said Committee has
specifically considered the issue related to the labourers. It will be
relevant to refer to paragraph no.3.6 of the said report, which is as
under :
“3.6. Issues related to Labour :
The new role and structure of FCI, as envisaged
above, raised a question of what would happen to large
number of workers currently working with FCI, directly or
indirectly. As indicated in Chapter 2, there are about one
lakh contract workers who work through contractors, and
they do the hardest job at market rates, which hovered
around Rs.10,000/ per month for the years 201213 and
201314.
In contract, the cost departmental labour turns
out to be 7 to 8 times higher than the contract labour as
given below :
Table : 3.4 Average Salaries of Workers per Month
Financial Year Average Salary (in Rs.)
(Cost per Worker per Month)
Departmental
System
DPS
System
NWNP
System
Contract
System
200910 38459 11606 n.a. n.a.
201011 53389 14390 6855 4260
201112 63763 15490 9835 5223
201213 71538 22124 3456 10149
201314 78549 22975 4062 9774
April to Nov.
2014
**79588 26606 n.a. n.a.
Note : Some of the cases where earnings exceed 4 lakhs,
include arrears of wage revision w.e.f. 1.1.2012.
*** This figure is not including the Other Account Heads
which form about 22% (as per the Accounts Division's
statement showing Dept. Salaries for Financial Year 2012
13) of the total emoluments paid to the Departmental
labour.
The Contract labour can easily be absorbed by
state governments or private sector, which ever agency takes
over the functions of FCI with respect to procurement,
stocking and movement. HLC recommends that their
conditions be improved by offering them better facilities.
However, there is an issue of departmental labour
of FCI for loading/unloading etc., which gets an average
salary of more than Rs.79,000/ per month (in 2014). This
is 78 times higher than what contract labour gets. There
were more than 370 persons in FCI labour that got salaries
of more than Rs.4 lakhs/per month. HLC has taken a serious
note of this, and FCI's system of so called incentives that
allows this. This practice needs to stop. With transfer of
much of storage and movement functions to states, this
departmental labour of FCI will become 'surplus. HLC
recommends that they be offered suitable VRS and this cadre
be gradually phased out. And to do that, first thing will be
to put a cap on the incentive system, where by no labour is
allowed to work more than say 1.25 times the daily work
agreed with Labour unions. Second, those depots where this
problem of departmental labour exists must be mechanized
on priority basis so that reliance on such labour reduces
substantially. Third, these depots should be denotified in
consultation with Labour Ministry.
With this new role of FCI, HLC believes that it
can play a pivotal role in ensuring that benefits of grain
management policies (from procurement to PDS) reach
larger number of farmers and consumers in a more cost
effective and sustainable manner, and food security is
guaranteed in a sustainable manner. ”
17. Perusal of the report would show that, on account of
practice of engaging different types of handling systems, there is
glaring disparity in the matter of payment, between the similarly
circumstanced workers. The workers who are doing the work
through contractors are getting approximately Rs.10,000/ p.m.;
whereas the salaries payable to the departmental labourers is
approximately Rs.80,000/ p.m. Not only this, but the affidavit filed
on behalf of the respondent/Corporation would reveal that the
payment of about Rs.Four Lacs which was referred in the daily “ The
Times of India ” was on account of arrears which were to be paid to
the departmental labourers for a period of 2½ years. However,
perusal of the affidavit would further reveal that on an average
payment made to the departmental labourers is to the tune of
Rs.1.41 Lacs per month. It is stand of the Corporation that higher
payment is on account of incentives. It is stated that the work is not
of perennial nature. It is further submitted that wherever provisions
of Section 10 of the said Act are made applicable, the Corporation is
left with no other alternative but to engage the services of
departmental labourers. It is, therefore, submitted that though salary
payable to the departmental labourers is fixed, whenever the railway
rakes arrive, the work is required to be undertaken through the same
departmental labourers, which results in payment of higher
incentives.
18. It could thus be seen from the report of experts appointed
by the Corporation as well as the High Level Committee appointed by
the Government of India, that huge cost is required to be incurred by
the respondentCorporation by engaging labourers as per the system
of departmental labourers. It is submitted on behalf of the
Corporation itself that, in the event the provisions of Section 10 of
the said Act are not made applicable to its depots, the Corporation
would save approximately an amount of Rs.1800 crores per year.
The said figures are on the basis of the report conducted during the
financial year 201213. The figures in the present financial year may
even go higher.
19. It could thus clearly be seen that, on account of the
respondent/Corporation not being permitted to engage contract
labourers, the public exchequer is required to suffer huge losses to
the tune of Rs.1800 Crores or more.
20. We make it clear that we do not intend to pass any order
which will have any effect on the service conditions of the
departmental labourers employed by the respondent/Corporation.
However, it is to be noted that the High Level Committee itself has
recommended discontinuing practice of departmental labourers. The
High Level Committee has noticed that there were about 370
labourers in the respondent/Corporation who had got salaries of
more than Rs.Four Lacs per month. The Committee has, therefore,
recommended that they should be offered suitable VRS and this
cadre be gradually phased out. The Committee has also
recommended that there should be a cap on the incentive system,
whereby no labourer is allowed to work more than 1.25 times the
daily work. It is worth mentioning here that, by now it is a settled
law that the incentive does not amount to a condition of service and
is an additional payment to be made to an employee in addition to
the salary and wages payable to him as per the service conditions.
21. The Committee has also recommended mechanisation of
depots on priority basis so that reliance on such labourers reduces
substantially. The Committee has also recommended denoficiation in
consultation with Labour Ministry. It is pertinent to note that though
the Central Government has made applicable provisions of Section 10
of the said Act to some of the depots, there is no notification issued in
respect of various other depots and at such depots including various
depots in the State of Maharashtra, the respondent/Corporation is
engaging services of contract labourers.
22. We fail to understand as to why when the High Level
Committee appointed by the Government of India has issued various
recommendations for streamlining functioning of the
respondent/Corporation and bringing efficiency in it, the
Government of India has not taken any steps, though almost a period
of 11 months has lapsed from the date of submission of the said
report.
23. At the cost of repetition, we make it clear that we are not
against the labourers getting handsome wages and incentives.
However, at the same time, the situation which permits glaring
disparities cannot be permitted to exist. On one hand there are
persons doing similar work getting Rs.10,000/ p.m., and, on the
other hand, there are 370 labourers working with the same
Corporation doing the same work who are getting an amount of
Rs.Four Lacs p.m (approximately). As already stated hereinabove, we
would be happy if every labourer in this country gets a salary of Rs.
Four Lacs or more. However, it is a ground reality that, for the same
work, one person gets an amount of Rs.Four Lacs and the another
person gets an amount of Rs.8,000/ to Rs.10,000/ p.m. We find
that such a position would also be violative of Constitutional
mandate. In a salary which one person gets i.e. an amount of
Rs.Four Lacs (approximately), 40 such other persons can be
accommodated in a country which is facing large scale
unemployment and the families of such 40 persons can be
maintained in that amount. It will not be out of place to refer to
Article 38 of the Constitution of India. Article 38 mandates the State
to strive to minimise inequality in income. The present situation
permits a huge difference in wages to be paid to two sets of
employees, doing same work.
24. We fail to understand as to why the Government of India
has not acted upon the report of the said High Level Committee for
denotifying the depots. We also fail to understand as to how the
provisions of Section 10 of the said Act could be made applicable to
some of the depots when the same are not made applicable to other
sets of depots, especially when the work being carried out is of the
same nature. It will be relevant to refer to the provisions of Section
10 of the said Act.
10. Prohibition of employment of contract labour.
(1) Notwithstanding anything contained in this Act,
(but, subject to the provisions of Clause (c) of subsection
(5) of Section 1), 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 subsection (1)
in relation to an establishment, the appropriate
Government shall have regard to the conditions of
work and benefits provided for the contract labour in
that establishment and other relevant factors, such as
(a) whether the process, operation or other work is
incidental to, or necessary for the industry, trade,
business, manufacture or occupation that is carried on
in the establishment;
(b) whether it is of 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;
(c) whether it is done ordinarily through regular
workmen in that establishment or an establishment
similar thereto;
(d) whether it is sufficient to employ considerable
number of wholetime workmen.
Explanation. If a question arises whether any process
or operation or other work is of perennial nature, the
decision of the appropriate Government thereon shall be
final.
25. Before issuing notification u/s.10 (1) of the said Act, the
appropriate Government is bound to take into consideration the
factors which are mentioned in subsection 2 of the said Act. It will
be relevant to refer clause (b) of subsection 2 (cited supra), which
requires to take into consideration as to whether the work is of
perennial nature i.e. it is of sufficient duration having regard to the
nature of industry, trade, business, manufacture or occupation
carried on in the establishment. As could be seen from the report of
M/s.Deloittee Consultancy, on an average 65 % of the yearly volume
is handled in the top 30 % of the days. It could further be seen that
whereas handling operation took place on 255 days i.e. on an
average, there was no work for 110 number of days. It is pertinent to
note that availability of work depends on arrival of railway rakes at
the depots. Number of rakes arriving at a particular depot may differ
from depot to depot and from time to time. We, therefore, prima
facie find that it cannot be said that the work is of perennial nature.
26. Clause (c) of Section 10 (2) of the said Act (cited supra)
requires the appropriate Authority to consider as to whether the work
is done ordinarily through regular workman in that establishment or
an establishment similar thereto. As has been pointed out
hereinabove, the Government of India has notified some of the
depots and not all the depots which are run by the said Corporation.
We fail to understand as to why the work at some of the depots
cannot be permitted to be done by the contract labourers when, at
the other depots, when the nature of work is the same and the
employer is also the same, the work is done through the Contract
Labour System. It is pertinent to note that M/s.Deloitt Consultancy
has also done a comparative study in respect of similar work having
been done by the similarly circumstanced employees like the
employees of the Corporation. Report of M/s.Deloitt Consultancy
states that except the Food Corporation of India, in all other similar
establishments, the work is being executed by the Contract Labour
System. We are of the view that when the expert's report and the
report of the High Level Committee have brought all the above
aspects to the notice of the Government of India, the Government of
India ought to have taken necessary steps for denotifying the depots
of the Corporation which are covered u/s.10 of the said Act.
27. We also fail to understand as to why the departmental
labourers should not be transferred from one depot to another depot.
As could be seen from the Judgment of the Apex Court in the case of
Food Corporation of India Worker's Union .vs. Food Corporation
of India and Others (Writ Petition (Civil) No.222 of 1984, dated
20th July, 1990) reported in 1990IILLN664/1990 (Supp) SCC 296,
it was the contention of the said Corporation that there cannot be
similar wages at different depots since services of the departmental
labourers were not transferable. The said contention has been
rejected by Their Lordships of the Apex Court. By now it is a settled
principle of law that transfer is an incidence of service. When wages
and all other service conditions of departmental labourers working at
different depots are identical, we see no reason as to why their
services could not be transferred from one depot to another. As has
been submitted by the Corporation, 1594 departmental labourers are
getting salary without any work; whereas at some of the depots,
there is huge deficiency of labourers.
28. We further also fail to understand as to why the Food
Corporation of India should not be in a position to change the
amount of incentives to be paid to the departmental labourers per
sack. When the size of the sacks has been reduced from 95 kg and
below to 50 kg and below, there is no reason as to why there should
not be proportionate reduction in the amount of incentives paid per
sack.
29. In that view of the matter, we find that it will be in the
interest of justice to issue certain directions to the
respondent/Corporation as well as the Union of India so as to ensure
that huge amount of public exchequer is not wasted and can be
utilized for better purposes.
30. In that view of the matter, we dispose of the present
Public Interest Litigation by passing the following order.
(i) The Government of India is directed to decide
the representation made by the Food Corporation of India
for grant of exemption under the provisions of Section 31
of the said Act within a period of one month from today,
in the light of observations made by us hereinabove within
a period of one month from today.
(ii) The Government of India shall decide the issue
regarding denotification of the depots of the Food
Corporation of India, in respect of which notification is
issued u/s.10 of the said Act, within a period of six months
from today, in the light of observations made by us
hereinabove and the report of M/s.Deloitt Consultancy
and the report of High Level Committee appointed by the
Government of India itself.
(iii) We clarify that the respondent/Food
Corporation of India would be entitled to transfer the
services of departmental labourers from one depot to
another subject to protecting their salary and all other
service conditions.
(iv) We also clarify that the respondent/
Corporation would be at liberty to implement its policy of
change in the Scheme of incentives.
(v) The Government of India shall also take a
decision regarding abolition of system of departmental
labourers in a phased manner or absorbing their services
in other establishments as recommended by the High
Level Committee.
31. We express our gratitude to Mr.S.P.Bhandarkar, learned
amicus curiae, Mr.K.H.Deshpande, learned Senior Advocate,
Mr.Y.P.Rao learned Counsel and Mr.V.P.Marpakwar, learned Counsel
for assisting this Court in deciding the issue in question, which will
have an effect of saving huge public exchequer.
No comments:
Post a Comment