gammon india ltd. v. union of india

8/20/2019 Gammon India Ltd. v. Union of India

1/22

Case Analysis

Gammon India Ltd. v. Union of India

Submitted to:

Mr. Girish R

Submitted by:

Ikshit Mittal

Reg. No. !"A#$%


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&able of Contents

a. Introduction…………………………………………………….3

b. Gammon India Ltd. v. Union of India……………………………….8

• Petitioner………………………………………………………....8

• Respondents……………………………………………………...8

• Bench…………………………………………………………….8

• Acts/tatutes/Ru!es………………………………………………8

• Brief Bac"#round of the case…………………………………….8

• Issues before the $ourt……………………………………………%

• $ontentions of the Petitioners…………………………………….%

• Provisions of !a& in 'uestion……………………………………..((

• )ud#ement and Ana!*sis of the Reasonin# #iven b* the $ourt…..(3

c. $onc!usion…………………………………………………………….+,

d. Bib!io#raph*…………………………………………………………...++

Int'odu(tion

-i!! of the peop!e is epressed in a nation throu#h #overnments three distinct activities.

0hese are the !e#is!ative1 eecutive and 2udicia! functions of the #overnment. $orrespondin#

to these three activities are three or#ans of the #overnment1 name!* the !e#is!ature1 the

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eecutive and the 2udiciar*. 0he !e#is!ative or#an of the state ma"es !a&s1 the eecutive

enforces them and the 2udiciar* app!ies them to the specific cases arisin# out of the breach of

!a&. ach or#an &hi!e performin# its activities tends to interfere in the sphere of &or"in# of

another functionar* because a strict demarcation of functions is not possib!e in their dea!in#s

&ith the #enera! pub!ic. 0hus1 even &hen actin# in ambit of their o&n po&er1 over!appin#

functions tend to appear amon#st these or#ans.

It is &ide!* accepted that for a po!itica! s*stem to be stab!e1 the ho!ders of po&er need to be

ba!anced off a#ainst each other. 0he princip!e of separation of po&ers dea!s &ith the mutua!

re!ations amon# the three or#ans of the #overnment1 name!* !e#is!ature1 eecutive and

2udiciar*. 0his doctrine tries to brin# ec!usiveness in the functionin# of the three or#ans and

hence a strict demarcation of po&er is the aim sou#ht to be achieved b* this princip!e. 0his

doctrine si#nifies the fact that one person or bod* of persons shou!d not eercise a!! the three

po&ers of the #overnment.(

But it is observed that due to severa! reasons such as over!oad on the !imited Par!iamentar*

time1 !ac" of epertise1 to maintain confidentia!it*1 to tac"!e emer#enc*1 et al 1 certain

!e#is!ative functions are eercised b* bodies other than Le#is!ature1 &hich is referred to as

4e!e#ated Le#is!ation.

0his paper ana!*ses the upreme $ourt ru!in# in the case of Gammon India Ltd. v. Union of

India in &hich va!idit* of $ontract Labour 5Re#u!ation and Abo!ition6 Act1 (%7, and Ru!es

thereunder &as cha!!en#ed on various constitutiona! and administrative !a& parameters. or

the purpose of this paper1 the concept of 4e!e#ated !e#is!ation and cessive 4e!e#ation has

been emphasi9ed b* the author.

)elegated Legislation:

1 eparation :f Po&ers; Its cope And $han#in# 'uations*http;//&&&.!e#a!serviceindia.com/artic!e/!(


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>4e!e#ated Le#is!ation means the eercise of !e#is!ative po&er b* an a#enc* &hich is

subordinate to the !e#is!ature. 4e!e#ated !e#is!ation is1 at times1 referred to as ?Anci!!ar*@1

?ubordinate@1 Administrative Le#is!ation or as uasi=Le#is!ation@

In a!sbur*s La&s of n#!and it has been said that &hen an instrument of a !e#is!ative

nature is made b* an authorit* in eercise of po&er de!e#ated or conferred b* the !e#is!ature1

it is ca!!ed subordinate !e#is!ation.

Cost si#nificant mi!estone &ith re#ards to adoption of de!e#ated !e#is!ation in India is the

first Presidentia! reference1 In Re )elhi La+s A(t* !,-!. 0his ru!in# of the upreme $ourt

is considered to be the bac"bone of de!e#ated !e#is!ation re#ime in India. It dea!t &ith various

aspect associated &ith de!e#ated !e#is!ation from definin# the term to the restriction of essentia! !e#is!ative function.

In &ords of ). Cu"her2ee1 it is ?it 5de!e#ated !e#is!ation6 is an epression &hich covers

mu!titude confusion. It is an ecuse for the !e#is!ators1 a shie!d for the administrators and a

provocation to the constitutiona! 2urists@3

imp!*1 &hen the functions of !e#is!ation is entrusted to or#ans other than the !e#is!ature b*

the !e#is!ature itse!f1 the !e#is!ation made b* such or#ans is ca!!ed de!e#ated !e#is!ation.

In India1 Ru!es1 Re#u!ations1 :rders1 Dotified :rders1 Dotifications1 B*e=!a&s denote

4e!e#ated Le#is!ation. A!so1 the same statute ma* emp!o* or use different epressions to

denote the eercise of the subordinate !a&=ma"in# po&er b* an administrative bod* or a#enc*. .#. >:rders1 >Dotified :rders1 >Dotification under the ssentia! $ommodities Act1

(%E8.

o&ever1 cessive 4e!e#ation of !e#is!ative po&ers is not permissib!e and upreme $ourt

has time to time reiterated that there shou!d not be ecessive encroachment of eecutive on

2 AIR 1951 SC 332

3 Ibid.

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the !e#is!ature as that &ou!d be opposed to doctrine of separation of po&ers &hich is a part of

basic structure of our $onstitution.

/0(essive )elegation:

In G+alio' Rayon Co v. Asst. Commissione' of Sales &a0$1 FADDA1 ).1 said; ?0he ru!e

a#ainst ecessive de!e#ation of the !e#is!ative authorit* f!o&s from and is a necessar*

postu!ate of the soverei#nt* of the peop!e.@ 0he Ape $ourt in Regist'a' Coo1e'ative

So(ieties v. 2. 2an3abmu- observed; ?de!e#ation un!imited ma* invite despotism

uninhibited.@ 0here is no abdication of !e#is!ative functions so !on# as the !e#is!ature has

epressed its &i!! on a particu!ar sub2ect matter1 indicated its po!ic* and !eft the effectuation

of the po!ic* to subordinate !e#is!ation provided the !e#is!ature has retained the contro! in itshand &ith reference to it so that it can act as a chec" or a standard and prevent the mischief

b* subordinate !e#is!ation &hen it chooses to or thin"s fit.

-hi!e it is reco#ni9ed that the doctrine of ecessive de!e#ation ou#ht not to be app!ied in a

pedantic manner because in the modern comp!e &or!d1 it ma* be difficu!t for the !e#is!ature

to state po!icies or formu!ate standards ver* articu!ate!* and po&er has to be #iven to the

Administration in broad terms to ma"e ru!es accordin# to the needs of the situation. But sti!!

the courts must ensure that the doctrine does not become 2ust an incantation or an empt*

forma!it*. 0he statement of po!icies in the statutes enab!e the courts !ater to app!* the doctrine

of u!tra vires to de!e#ated !e#is!ation in a more meanin#fu! and effective manner.

In the present case ana!*sis1 the author &i!! dea! &ith the aspects of !abour !a& and de!e#ated

!e#is!ation to trace 2udicia! reasonin# &hi!e interpretin# the $ontract Labour 5Re#u!ation and

Abo!ition6 Act1 (%7, and Ru!es thereunder1 &hich &ere passed b* the par!iament to improve

the conditions of $ontract Labourers and abo!ition of the same1 &herever possib!e.

0emporar* nature of the 2ob eposes these !abours to varied ris"s of bein# ep!oited b* their

hirers. ence1 it &as imperative for the !e#is!ature to step in1 in order to safe#uard the ri#hts

of these c!ass of &or"men and to protect their di#nit* as a human.

)elegated Legislation in &a0 La+s

4 AIR 1974 SC 1660

5 AIR (%8, $ 3E,

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0he etent to &hich de!e#ation in ta !a&s is permissib!e has chan#ed over time. -hi!e the

upreme $ourts position has a!&a*s been that the po&er to ta is a !e#is!ative function and

on!* matters that incidenta!!* arise in the eercise of that function can be de!e#ated to the

eecutive1 its o&n interpretation of this position has broadened to a!!o& more substantia!

functions to be eercised b* the eecutive.

0he upreme $ourt stated in Ra3na'ain v. Chai'man* 4atna Administ'ation reasonab!e area of discretion on the Government b* a fisca! statute1 but a !ar#e statutor*

discretion b* means of a &ide #ap bet&een the maimum and minimum rates and thus

enab!in# the #overnment to fi an arbitrar* rate is not sustainab!e.

)ust t&o *ears ear!ier1 another five 2ud#e bench had decided in Co'1. of Cal(utta v. Libe'ty

Cinema% that the po&er to fi rates and ta a certain #roup &as a!!o&ed to be de!e#ated. 0o

c!arif* the apparent inconsistenc* bet&een 4evi 4as and Libert* $inema1 the upreme $ourt

constituted a 7 2ud#e bench to hear Muni(i1al Co'1o'ate of )elhi v. 5i'la S1inning and

6eaving Mills Ltd.,1 in &hich it attempted to reso!ve the matter. In this case1 the respondents

contested the va!idit* of section (E,5(6 of the 4e!hi Cunicipa! $orporate Act1 (%E7. 0he

provision provided the maimum rate of ta that cou!d be !evied1 and a!!o&ed the $entra!

Government to decide &hat the rate &ou!d be. 0he provision &as uphe!d b* a ma2orit* of E;+

&herein -anchoo1 $) &rote in his 2ud#ment that such provisions are perfect!* va!id as

essentia! !e#is!ative function &as retained b* the !e#is!ature in its o&n hands.

)istin(tion bet+een 7ees and &a0

6 AIR 1954 SC 569

7 AIR 1967 SC 1895

8 AIR 1965 SC 1107

9 AIR 1968 SC 1232

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It is imperative for the ana!*sis of this case that distinction bet&een fees and ta is proper!*

understood. ecutive cant impose taes b* &a* de!e#ated !e#is!ation but the* have the

authorit* to prescribe >fee for the service the* provide !i"e !icensin#1 re#istration1 etc.

In Commissione'* 8indu Religious /ndo+ments* Mad'as v. S'i Lakshmind'a &hi'tha

S+amia' of S'i Shi'u' Mutt!#

1 the upreme $ourt considered the 'uestion as to &hat are theindicia or specia! characteristics that distin#uish a fee from a ta proper. B.F. Cu"her2ea1 ).

5as he then &as61 &ho spo"e for the seven=)ud#e Bench of this $ourt in the case1 opined that

ta defined as Ha compu!sor* eaction of mone* b* pub!ic authorit* for pub!ic purposes

enforceab!e b* !a& and not pa*ment for services rendered H b* Latham1 $.). of the i#h

$ourt of Austra!ia in Mathe+s v. Chi(o'y Ma'keting 5oa'd!!.

Later1 the !earned )ud#e1 advertin# to features &hich distin#uish fee from ta1 opined1 ?0he

fee1 accordin# to the !earned )ud#e1 if had to be re#arded as a sort of service or consideration

for services rendered1 on the face of the !e#is!ative provision1 it 5fee6 must be co=re!ated to the

epenses incurred b* Government in renderin# the services.@

10 AIR 1954 SC 282

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Gammon India Ltd. v. Union of India!

4etitione': Gammon India Ltd. tc. tc.

Res1ondent: Union of India and :rs. tc.

5en(h:

A. D. Ra*1 ). 5$)I6

P. )a#anmohan Redd*1 ).

. D. 4&ivedi1 ).

P. F. Gos&ami1 ).

Ran2it in#h ar"aria1 ).

A(t9Statutes9Rules:

• 0he $ontract Labour 5Re#u!ation and Abo!ition6 Act1 (%7, 5hereinafter referred to as

?the Act@6

• $onstitution of India

• $ontract Labour 5Re#u!ation and Abo!ition6 $entra! Ru!es1 (%7(.

5'ief 5a(kg'ound of the (ase:

Ri#hts and interests of $ontract Labourers &ere #ainin# the attention of peop!e in the (%


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$ontract Labour 5Re#u!ation and Abo!ition6 Act1 (%7, &as passed b* the par!iament and &as

made app!icab!e to a!! estab!ishments &herein $ontract Labours are dep!o*ed. :n bein# hit

adverse!* b* the provisions of the Act1 petitioners &ho &ere en#a#ed in construction business

approached the $ourt cha!!en#in# the va!idit* of the Act on various #rounds.

Issues befo'e the Su1'eme Cou't:

o!!o&in# issues came before the court to determine and ad2udicate upon;

(. -hether the petitioners come &ithin the definition of ?contractors@ as mentioned

under section + 5c6 of the Act

+. -hether the app!ication of the Act to the pendin# contract imposes unreasonab!e

restrictions vio!atin# artic!e (% 5(6 5#6 of the $onstitution

3. -hether the fees prescribed for re#istration1 !icences1 or rene&a! of !icences amount

to !ev* of a ta &hich are1 therefore1 be*ond the ru!e=ma"in# po&ers of the $entra!

and tate Government

J. -hether the provisions 5those contended b* the petitioners6 of Act are

unconstitutiona! and unreasonab!e

E. -hether section 3J of the Act empo&erin# the $entra! #overnment to ma"e an*

provisions for remova! of difficu!t* is ecessive de!e#ation thereb* ma"in# it

unconstitutiona!

Contentions of the 4etitione's:

(. Petitioners contended that estab!ishment means an* p!ace &here an* industr*1 trade1

business1 manufacture or occupation is carried on and1 therefore1 the &or"men

emp!o*ed b* the petitioners are not contract !abour because the* are not emp!o*ed in

connection &ith the &or" of the estab!ishment. 0he &or" of the estab!ishment is1

accordin# to the petitioners1 not on!* at the p!ace &here the business1 trade1 industr*

of the estab!ishment is carried on but a!so the actua! business or trade or industr* of

the estab!ishment. 0he entire emphasis is p!aced b* the petitioners on the &ords H&or"

of an* estab!ishment.H B* &a* of i!!ustration it is said that if a ban"in# compan*

&hich is an estab!ishment &hich carries on its business at 4e!hi emp!o*s the

petitioners to construct a bui!din# at A!!ahabad the bui!din# to be constructed is not

the &or" of the ban". It is said that the on!* &or" of the ban" as an estab!ishment is

ban"in# &or" and1 therefore1 the &or" of construction is not the ban"in# &or" of the

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estab!ishment. 0herefore1 the petitioners contend that the &or"men emp!o*ed b* the

petitioners are not &or"men in connection &ith the &or" of the estab!ishment and

petitioners are not ?contractors@ as defined in the Act.

+. 0he app!ication of the Act to pendin# contracts amounts to unreasonab!e restrictions

on the ri#ht of contractors under artic!e (% 5(6 5#6 of the constitution and is therefore1

unconstitutiona!.

3. 0he fees prescribed for re#istration1 !icenses and rene&a! of !icenses amount to !ev*

of taes &hich is essentia! !e#is!ative and cannot be de!e#ated. ence1 such a

de!e#ation #oes be*ond the ru!e ma"in# po&er of the $entra! and tate #overnment.

J. o!!o&in# provisions &ere contended to be unconstitutiona!;

• Provisions in re#ard to canteens1 rest rooms1 !atrines and urina!s as contemp!ated

b* sections (< to (8 of the Act read &ith $entra! Ru!es J, to E< and ru!e +E5+6 5vi6

are incapab!e of imp!ementation and enormous!* epensive as to amount to

unreasonab!e restrictions &ithin the meanin# of Artic!e (% 5(6 5#6.

• $entra! Ru!e +E 5+6 5v6 5b6 &ere cha!!en#ed to be unreasonab!e as it confers a

discretionar* po&er on the $hief Labour $ommissioner and there is no provisionof appea! re#ardin# his decision.

• Provisions in section (J &ith re#ard to forfeiture of securit* are unconstitutiona!.

• 0he va!idit* of ru!e +J &hich re'uires deposit of Rs. 3,/= per &or"men is

cha!!en#ed as void under Artic!es (J and (% 5(6 5f6 both on the #round that the

same is arbitrar* and a!so because there is no ob!i#ation on the Government to pa*

to the &or"men or to uti!ise for the &or"men an* part of the securit* deposit so

forfeited.

E. It &as a!so contended that section 3J of the Act &hich empo&ers the $entra!

Government to ma"e an* provision not inconsistent &ith the provisions of the Act for

remova! of difficu!t* is unconstitutiona! on the #round of ecessive de!e#ation.

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4'ovisions of la+ in uestion:

(. Se(tion ;(


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5b6 the number of canteens that sha!! be provided1 and the standards in respect of

construction1 accommodation1 furniture and other e'uipment of the canteens and

5c6 the foodstuffs &hich ma* be served therein and the char#es &hich ma* be made

thereof.

7. Se(tion !> Rest=rooms.=5(6 In ever* p!ace &herein contract !abour is re'uired to ha!t at ni#ht in connection

&ith the &or" of an estab!ishmentK

5a6 to &hich this Act app!ies1 and

5b6 in &hich &or" re'uirin# emp!o*ment of contract !abour is !i"e!* to continue for

such period as ma* be prescribed1 there sha!! be provided and maintained b* the

contractor for the use of the contract !abour such number of rest=rooms or such other

suitab!e a!ternative accommodation &ithin such time as ma* be prescribed.

5+6 0he rest rooms or the a!ternative accommodation to be provided under subsection

5(6 sha!! be sufficient!* !i#hted and venti!ated and sha!! be maintained in a c!ean and

comfortab!e condition.

8. Se(tion !% :ther faci!ities= It sha!! be the dut* of ever* contractor emp!o*in# contract

!abour in connection &ith the &or" of an estab!ishment to &hich this Act app!ies1 to

provide and maintainK

5a6 a sufficient supp!* of &ho!esome drin"in# &ater for the contract !abour at

convenient p!aces

5b6 a sufficient number of !atrines and urina!s of the prescribed t*pes so situated as to

be convenient and accessib!e to the contract !abour in the estab!ishment and

5c6 &ashin# faci!ities.

%. Rule - ;< ;v< ;a


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5b6 the ho!der of a !icence has1 &ithout reasonab!e cause1 fai!ed to comp!* &ith the

conditions sub2ect to &hich the !icence has been #ranted or has contravened an* of the

provisions of this Act or the ru!es made thereunder1 then1 &ithout pre2udice to an*

other pena!t* to &hich the ho!der of the !icence ma* be !iab!e under this Act1 the

!icensin# officer ma*1 after #ivin# the ho!der of the !icence an opportunit* of sho&in#

cause1 revo"e or suspend the !icence or forfeit the sum1 if an*1 or an* portion thereof

deposited as securit* for the due performance of the conditions sub2ect to &hich the

!icence has been #ranted.

5+6 ub2ect to an* ru!es that ma* be made in this beha!f1 the !icensin# officer ma*

var* or amend a !icence #ranted under section (+.

(+. Rule $ of the $entra! Ru!es provides that the securit* amount of Rs. 3,/= for each of

the &or"men is to be deposited as securit* for the due performance of the conditions

of !icence and comp!iance &ith the provisions of the Act or the ru!es made thereunder.

(3. Se(tion "$ Po&er to remove difficu!ties=

If an* difficu!t* arises in #ivin# effect to the provisions of this Act1 the $entra!

Government ma*1 b* order pub!ished in the :fficia! Ga9ette1 ma"e such provisions

not inconsistent &ith the provisions of this Act1 as appears to it to be necessar* or

epedient for removin# the difficu!t*.

?udgement and analysis of Reasoning given by the Cou't:

Issue !

0he court re2ected the contention of the petitioner &ith respect to them not been covered in

the definition of ?contractors@ as #iven in the Act. Petitioners #ave t&o reasons for their

ec!usion1 first1 the &or" of the petitioners is not an* part of the &or" of the principa!

emp!o*er nor is it the &or" Hin connection &ith the &or" of the estab!ishmentH1 name!*1

principa! emp!o*er and second1 the &or" of the petitioners is norma!!* not done in the

premises of the Hestab!ishmentH of the principa! emp!o*er. -hi!e re!*in# upon the definitions

provided in the Act the petitioner p!aced a #reat re!iance on the &ords ?&or" of the

estab!ishment@ and su##ested that since the &or"men emp!o*ed b* the petitioners are not

emp!o*ed in connection &ith the &or" of estab!ishment1 the* are not contract !abours. 0he

&or" of the estab!ishment is1 accordin# to the petitioners1 not on!* at the p!ace &here the

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business1 trade1 industr* of the estab!ishment is carried on but a!so the actua! business or

trade or industr* of the estab!ishment.

0he contention of the petitioner &as he!d to be unsound. 0he court he!d that &hen the

ban"in# compan* emp!o*s the petitioners to construct a bui!din#1 the petitioners are in

re!ation to the estab!ishment1 contractors &ho underta"e to produce a #iven resu!t for the

ban". 0he petitioners are a!so persons &ho underta"e to produce the resu!t throu#h contract

!abour. 0he petitioners ma* appoint sub=contractors to do the &or". ence1 a!! the

re'uirements of section + 5c6 are fu!fi!!ed.

0he court !oo"ed at the contet and ob2ect of the &ords #iven the definition c!auses of the Act

to interpret it in such a &a* as to inc!ude the &or" done on a &or" site a&a* from the eistin#

premises of the business for the benefit of business or its epansion1 as ?&or" of the

estab!ishment@. 0he harmonious meanin# that arose out of the definitions of contractors1

&or"man1 contract !abour1 estab!ishment1 principa! emp!o*er a!! imp!ied that the ?&or" of the

estab!ishment@ inc!udes the &or" site of the estab!ishment &here a bui!din# is constructed.

0he &or" of construction &as he!d to be the &or" of estab!ishment. 0he epression

"employed in or in connection with the work of the establishment" does not mean that the

operation assi#ned to the &or"men must be a part or incidenta! to the &or" performed b* the

principa! emp!o*er. Accordin# to the Act1 the contractor is emp!o*ed to produce the #iven

resu!t for the benefit of the principa! emp!o*er in fu!fi!ment of the underta"in# #iven to him.

0herefore1 the emp!o*ment of the contract !abour1 name!*1 the &or"men b* the contractor

&as he!d to be in connection &ith the &or" of the estab!ishment. 0he petitioners &ere

dec!ared contractors &ithin the meanin# of the Act and their contentions &ere re2ected.

Issue

-ith re#ard to second issue1 the court observed that there is no unreasonab!eness in

app!ication of the provisions contained in the impu#ned Act to pendin# contracts. In fact1

pendenc* of contract &as he!d to be an irre!evant consideration b* the court as the sub2ect

matter of the Act is not the contract but the contract !abourers. ence1 there is no 'uestion of

retrospective operation.

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urther1 since the petitioners did not produce sufficient evidence to sho& that the* &i!! be

adverse!* affected b* the provisions of the Act. Interest of the &or"men &ere #iven the

utmost eminence and since the* are remedied b* the ob2ects of Act1 the court he!d that it

shou!d be app!ied to a!! contract !abourers &ith an* pre2udice of pendenc* contention. 0he

protection of !abourers interests are minimum !abour &e!fare and there is no

unreasonab!eness in its app!ication.

Issue "

-hi!e dea!in# &ith the third issue1 the court !oo"ed into the merits of petitioners contention

and the ob2ect of the Act.

Po&er to impose ta is considered an essentia! !e#is!ative function and is reco#ni9ed as

inherent po&er of tate. Under Artic!e +!a& means !a& enacted b* the competent

!e#is!ature and not made b* the eecutive. 0he upreme $ourt has he!d in its various

2ud#ment that thou#h the po&er to !ev* ta is an essentia! !e#is!ative function and as such

cannot be de!e#ated. o&ever1 some of it can sti!! be de!e#ated sub2ect to !imitation that the

essentia! !e#is!ative functions are performed b* the !e#is!ative itse!f1 &hich is to !a* do&n the

po!ic* and the #uide!ines for the imposition of taes.

0he court he!d that1 the fees prescribed for re#istration1 !icence and rene&a! of !icences do not

amount to a !ev* of ta. 0he Government has to bear epenses for the scheme of re#istration1

!icence. 0he Government #ives service in re#ard to !icences and re#istration and the fees

char#ed for that service cannot be considered as imposition of ta.

urther it &as he!d that there is no arbitrar* po&er or ecessive de!e#ation of !e#is!ative

authorit* &ith re#ard to #rant of !icence. 0he Act and the Ru!es provide amp!e #uide!ine as to

the #rant and terms and conditions of !icence. ection (E of the Act confers a ri#ht of appea!

on an* person &ho is a##rieved b* an* order refusin# a !icence or if there is revocation or

suspension of !icence. imi!ar!*1 &hen there is revocation of re#istration of an estab!ishment

or there is refusa! to #rant re#istration1 there is a ri#ht of appea!.

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ence1 petitioners contentions &ith re#ard to this issue &ere a!so refuted b* the ape court.

Issue $

Marious provisions of the Act &ere cha!!en#ed b* the petitioners on different #rounds

thereunder1 &hich &ere dea!t b* the court one b* one.

irst!*1 the provisions of section (< to (8 read &ith $entra! Ru!es J, to E< &ere cha!!en#ed

on the #rounds that imp!ementation of these provisions in impossib!e and impracticab!e.0hese provisions mandates the contractor to provide reasonab!e &or"in# conditions to protect

the di#nit* of $ontract Labourer. 0he court he!d that1 condition of contract !abour has been

en#a#in# the attention of various committees for a !on# time. 0he benefits conferred b* the

Act and the Ru!es are socia! &e!fare !e#is!ative measures. 0he various measures &hich are

cha!!en#ed as unreasonab!e name!*1 the provisions for canteens1 rest rooms1 and faci!ities for

supp!* of drin"in# &ater1 !aterines1 urina!s1 first aid faci!ities are amenities for the di#nit* of

human !abour. 0he measure is in the interest of the pub!ic. 0here is a rationa! re!ation

bet&een the impu#ned Act and the ob2ect to be achieved and the provision is not in ecess of

that ob2ect. 0here is no vio!ation of Artic!e (J. 0he c!assification is not arbitrar*. 0he

!e#is!ature has made uniform !a&s for a!! contractors.

0hese faci!ities are necessar* to protect the !abourer from ep!oitation and &ere he!d to be

reasonab!e.

econd!*1 the provisions contained in $entra! Ru!e +E 5+6 5v6 5b6 &ere cha!!en#ed as

unreasonab!e. 0he contention a#ainst this Ru!e &as that there is no provision of appea! and

the decision of Labour $ommissioner is fina!. 0he court observed in this re#ard that it is not

difficu!t to determine and decide cases of this t*pe. 0he $ommissioner of Labour has specia!

"no&!ed#e. urther ep!ainin#1 it &as he!d that it &i!! be a 'uestion from statute to statute1

from fact to fact as to &hether absence of a provision for appea! ma"es the statute bad. 0he

provisions contained in Ru!e +E 5+6 5v6 5b6 refer to &a#es1 hours of &or" and conditions of

service in simi!ar emp!o*ment.

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ince the issue invo!ved in these cases is simp!e1 a !on# dra&n procedure ma*1 as the court

he!d1 eceed the duration of emp!o*ment of the &or"men1 thereb* pre2udicin# the parties

invo!ved. A proper standard is !aid do&n in the ep!anation to Ru!e +E 5+6 5v6 5b6. 0he

absence of a provision for appea! is not unreasonab!e in the contet of provisions here. 0he

$ommissioner can reasonab!* epected to have due re#ard to the &a#es of &or"men in

simi!ar emp!o*ment. 0he parties are heard and the $ommissioner of Labour &ho is

specifica!!* ac'uainted &ith the conditions1 app!ies the proper standards. ence1 it &as he!d

that there is no unreasonab!eness in the Ru!es.

0hird!*1 constitutiona! va!idit* of section (J &as cha!!en#ed b* the petitioners. 0he court he!d

that section (J of the impu#ned Act is constitutiona!!* va!id as it provides for forfeiture in the

case of non=comp!iance &ithout an* reasonab!e cause. urther1 provision of #ivin# an

opportunit* of sho&in# cause in contained the provisions of the section and hence there is no

arbitrar* conferment of po&ers. uch forfeiture provision act as deterrent for comp!iance and

is constitutiona!!* va!id.

ina!!*1 Ru!e +J mandatin# deposition of Rs.3, per &or"er as a securit* &as contented to be

unconstitutiona! as it offends artic!e (J and artic!e (% 5(6 5f6. 0he court re2ected this

contention citin# reason that the c!assification is not arbitrar* as it is re!atab!e to bi# and

sma!! contractors accordin# to the number of &or"ers emp!o*ed b* them. urther1 the

ar#ument that #overnment is not under ob!i#ation to use this securit* for the benefit of

!abourers ma"es it vio!ative of the constitutiona! provisions is incorrect as the forfeiture of

this sum is an ?administrative pena!t*@ &hich is to ensure the comp!iance of the conditions

upon &hich the !icense &as #iven. ence1 the said ru!e &as he!d to be reasonab!e and

constitutiona!!* va!id.

Issue -

ection 3J of the impu#ned Act re!ates to provision &hich is "no&n as enr* MIII c!ause in

!e#a! termino!o#*. enr* MIII c!ause is basica!!* de!e#ation of po&er to remove difficu!ties to

the eecutive for smooth imp!ementation of the Act. ection 3J empo&ers the $entra!

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ecutive to ma"e ru!es1 &hich are not inconsistent to the provisions of the Act for remova!

of difficu!t*.

Petitioner cha!!en#ed ection 3J of the impu#ned Act as unconstitutiona! on #round of

ecessive de!e#ation. Re!iance &as p!aced b* the petitioner on the upreme $ourt ru!in#1

?alan &'ading Co. v Ma@doo' Union!"1 &hereb* the upreme $ourt &as ca!!ed upon to

decide the !e#a!it* of such a c!ause. ection 37 5(6 of the pa*ment of Bonus Act (%


19/22

administrative machiner*. It &as he!d that difficu!ties can on!* arise in imp!ementin# the

ru!es and hence1 section 3J does not amount to ecessive de!e#ation.

Con(lusion

$ontract !abour is a si#nificant and #ro&in# form of emp!o*ment. It eists in a!most ever*

sphere of the emp!o*ment1 industries1 a!!ied operations and a!so preva!ent in the service

sector. It #enera!!* refers to &or"ers en#a#ed b* a contractor for other or#anisation. 0heep!oitation of contract !abour in emp!o*ment is one the bi##est concern of the #overnment

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as the contract !abour have !itt!e bar#ainin# po&er1 socia! securit* and often en#a#ed in the

ha9ardous industries &ith !esser faci!ities and securit*. 0o re#u!ate this s*stem the

#overnment enacted the $ontract Labour 5Re#u!ation N Prohibition6 Act1 (%7, to secure the

status of contract !abourers and to abo!ish them from certain estab!ishment.

In the case &hich is e!aborate!* discussed and ana!*sed in this paper1 constitutiona! va!idit* of

the abovementioned $ontract Labour statute &as cha!!en#ed and the same &as uphe!d b* the

ape court.

-e!fare of Pub!ic is most important 2ob &hich is entrusted to the par!iament and there is no

unreasonab!eness in settin# up standards to protect di#nit* of the individua!s. In the present

case1 the provisions of the Act &ere a piece of &e!fare !e#is!ation enacted to improve the

appa!!in# conditions of the $ontract !abourers. ence1 the ob!i#ations imposed b* this Act

&as he!d to be constitutiona!!* va!id and reasonab!e.

4octrine of Permissib!e Limits under 4e!e#ated Le#is!ation &as invo"ed b* the petitioners

&ith respect to prescription of fees for re#istration1 #rant of !icense1 etc. and it &as ar#ued

that this amounts to !ev* of ta &hich is an ?essentia! !e#is!ative function@ &hich cannot be

de!e#ated. o&ever1 since the ob2ect of such imposition of fees &as to char#e for the service

provided and compensate the cost incurred b* the !e#is!ature in arran#in# the mechanisms for

re#istration and other such purposes1 it &as not he!d as imposition of ta and hence1 &as

&ithin the permissib!e !imits of de!e#ated !e#is!ation. urther1 &ith respect to #rant of

!icenses1 detai!ed re#u!ator* #uide!ines and po!icies &ere !aid do&n in the Act to de!e#ate this

po&er of #rantin# !icense to the eecutive. Provision of appea! in a case &here a part* fee!s

a##rieved b* an* order refusin# him/her the !icense is ver* stron# re#u!ator* too! to "eep a

chec" on the eecutive po&er. ince1 a!! these provisions &ere present in the Parent Act1 such

de!e#ation does not amount to ecessive de!e#ation as contended b* the petitioners in this

case.

Po&er to remove difficu!ties &hich is a!so "no&n as enr* MIII c!ause1 &ith a restriction that

provisions made to remove difficu!t* must not be inconsistent &ith the provisions of the Act1

contained in section 3J of the impu#ned Act &as he!d constitutiona!!* va!id and not

amountin# to ecessive de!e#ation b* the $ourt. enr* MIII c!ause is empo&erin# c!ause in

an* !e#is!ation to remove difficu!ties and faci!itate effective imp!ementation of the Parent

Act.

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o&ever1 in m* opinion1 such !ibera! approach to&ards enr* MIII c!ause haunts &ith the

possibi!it* of misuse of po&er b* the eecutive. ven accordin# to 4ono#hue Core

$ommittee1 this po&er is a ver* &ide po&er &hereb* the eecutive can chan#e the character

or the basic intention of the !e#is!ature and thus it shou!d be avoided.

5ibliog'a1hy

5ooks 'efe''ed

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• .-.R. -ade N $.. ors*nth Administrative Law: 5 De& 4e!hi; :ford Universit*

Press1 +,,J6

• I.P Casse*1 Administrative Law; 5Luc"no&; astern Boo" $ompan*1 +,,86

• C.P )ain1 Treatise on Administrative Law: 5Da#pur; -adh&a and $ompan*1 (%%

gammon india ltd. v. union of india

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