M.L. Singhal, J.
1. Vide order dated 10th November, 1998, Additional Civil Judge (Senior Division), Ambala Cantt. refused temporary injunction to the plaintiff (the Bhartiya Khadya Nigam Cooperative L&C; Society Limited, Naraingarh) restraining the Food Corporation of India (FCI) from floating tenders for handling and transport work, for Barara centre and for negotiations and allotting the above said work to any person other than the plaintiff-society without entering into negotiations with the plaintiff society for rates and allotment of HTC work.
2. Aggrieved, plaintiff society went in appeal. District Judge, Ambala refused to interfere with the exercise of discretion by the Additional Civil (Senior Division), Ambala Cantt. and dismissed the appeal. Still not satisfied, the plaintiff society has knocked the door of this Court through this revision.
3. Facts: -
Plaintiff society is a labour cooperative society formed by the labourers working in depot Barara under the guidelines of the Food Corporation of India and had been approved by it. It had been working for executing HTC work on negotiated rates for 4 years. HTC work was allotted to this labour cooperative society vide circular No. 1.R. (L8)2.B/93 July 27, 1994. As per its clause 3, FCI had directed its District Manager/Assistant Manager that HTC work shall be carried through such approved societies only in the depot whose labourers form such society on mutually negotiated rates, terms and conditions. Plaintiff society fulfilled all the norms of such society and it had been approved by the FCI and, therefore, FCI was bound to allot HTC work to the plaintiff society on negotiated rates, terms and conditions. FCI has ignored that circular and have started embarking upon floating the tenders for HTC work. On these allegations, the plaintiff society filed suit for permanent injunction restraining the defendant FCI from floating the tenders for handling and transport work for Barara centre and for negotiations and for allotting the said work to any other person than the plaintiff society without entering into negotiations with the plaintiff society for rates and allotment of the HTC work. Defendant FCI's case, on the other hand, was that the concessions given by circular dated 27.7.1994 were not workable and beneficial to the FCI and vide circular No. IRL/8/28/93-V2II dated 21/22.11.1996 issued by the FCI headquarters, New Delhi the said concessions have been withdrawn with immediate effect.
4. Vide circular dated 27.7.1994, the FCI had given the following concessions to the labour cooperative societies:-
1(a) that FCI will directly allot handling and transport work to labour cooperative societies without calling tenders;
(b) such cooperative societies who are exempted from the deposit of earnest money and security;
(c) the allotment of contract will be made on the basis of prevailing market rate after negotiating with such societies.
5. It was submitted by the learned counsel for the plaintiff society (petitioner herein) that as per this circular, the FCI is required to allot handling and transport work to labour cooperative societies without calling tenders and there is no reason why tenders be floated and the handling and transport work of FCI be allotted to the lowest tenderer. Allotment of contract is to be made on the basis of prevailing market rates after negotiating with such societies. It was submitted that plaintiff labour society is fulfilling all these conditions and it is doing handling and transport work for FCI for the last 4 years. FCI is bound to allot further HTC work to it on mutually negotiated rates, terms and conditions of the contract. It was submitted that in violation of this circular, FCI wanted to float tenders for allotting work to some person other than the plaintiff society. It was further submitted that if the FCI is permitted to allot handling and transport work after floating tenders, that would give rise to contract labour system in the FCI depots and the carrying out of handling and transport work will go to private persons. Contract labour system was depreciated by the Hon'ble Supreme Court in Shankar Mukerjee and Ors. v. Union of India, A.I.R. 1990 S.C. 532. In para 6 of the judgment, the Hon'ble Supreme Court has observed that it is surprising that more than 40, years after the independence, the practice of employing labour through contractors by the big companies including public sector companies is still being accepted as a normal feature of labour employment. There is no security of service to the workmen and their wages are far below than that of the regular workmen of the companies. In Standing Vacuum Refining Company of India Limited v. Its Workman, A.I.R. 1960 S.C. 948 and Catering Cleaners of Southern Indict v. Union of India, A.I.R. 1987 S.C. 770, the Hon'ble Supreme Court disapproved the system of contract labour holding it to be 'archaic', 'primitive' and of 'baneful nature', the system which is nothing but an improved version of bonded labour, is sought to be abolished by Contract Labour Regulation and Abolition Act, 1970. This Act is an important piece of social legislation for the welfare of labourers and has to be liberally construed.' In the Karnatka Contract Labour and Transport Cooperative Society Limited and Ors. etc. v. Food Corporation of India, Zonal Office, Madras and Ors., A.I.R. 1994 Karnatka 147, the Karnatka High Court held that Food Corporation of India is a State within the meaning of Article 12 being covered by the phrase 'other authority' as mentioned thereunder in view of the fact that contract labour system in case of work which is of perennial nature is frowned upon and is treated to be archaic and also keeping in view perennial nature of work of loading, unloading, handling and transporting of foodgrains at various godowns run by FCI throughout India and also being a public sector undertaking charged with public duty and catering to public interest, the Corporation took a policy decision in 1989 to abolish contract labour system for handling foodgrains and for loading and unloading them at its various godowns in India and in its anxiety to offer guarantee employment of perennial and regular nature to the erstwhile workmen of the then existing contractors by negotiating labour cooperatives by such workmen and assuring them perennial nature of employment in such work. This policy decision is reflected by circular No. 1/63/1989 Cont. dated 19.1.1989 and circular No. F.1/63/1989/Cont. dated 16.3.1989 issued by the headquarter of the Corporation. This policy decision of the FCI to abolish contract labour system could not be treated as a mere executive instruction the object whereof would be of no consequence. A clear cut policy having been laid down by the circulars, the FCI was required to consistently follow this policy. Once a policy decision is taken by a public sector undertaking like FCI, which is a State within the meaning of Article 12, any action on its part which deviates from such policy would render the action arbitrary, unauthorised, illegal and would also attract rigors of Article 14 of the Constitution of lndia. Once the contract given to a private contractor came to an end, it was incumbent upon the FCI to follow the policy decision laid down in the circular and to see to it that the erstwhile workers of the ex-contractor were offered and assured perennial nature of work and employment by being self-employed workmen constitute the cooperative society of their own and calling for tenders was out of question for once again giving work on contract labour basis in view of the clear cut policy decision, the FCI was not competent and could hot invite tenders from members of general public and undergoing the exercise of scrutinising the tenders. It was impermissible exercise. Once the existing contractors were to be eliminated, the same existing contractor who was the President of Cooperative Society which was promoted by him, could not be brought back by back door and awarded contract. In fact labour cooperative societies controlled by the erstwhile contractors would be clearly ineligible for being considered for award of contracts when contract labour system was sought to be abolished. Awarding contract to them would amount to reintroducing the contract labour system for such work. Policy decision of the FCI is to be implemented by its all offices/godowns whether it be old or new.
6. Learned counsel for the respondent, on the other hand, submitted that if the FCI allots the work of handling and transport to labour cooperative societies alone on negotiated rates, terms and conditions, that gives rise to monopoly in their favour. Some labour cooperative societies form a group and they indicate the same rate, terms and conditions on which they will carry out the work of handling and transport work and in this manner, the FCI has to pay more for handling and transport work. It was with a view to break the creation of monopoly in favour of labour cooperative societies that the FCI made a shift in its policy and issued circular dated 21/22.11.1996 and the new policy embodied in this circular reads as follows:-
'The various concessions as extended from time to time to the cooperative societies including labour cooperative societies in terms of the various headquarter's instructions issued in this regard so far will now not be admissible to any cooperative society including labour cooperative societies in future in tender inquiries to be floated by FCI units. The cooperative societies including labour cooperative societies which are already functioning as HTC and are availing concessions as per headquarter's circular cited above, may however, avail the same till the expiry of the existing contract period with them. Thereafter, these concessions will not be admissible to them.'
7. Thus it gives out that the various concession which were given to the labour cooperative societies vide circular dated 27.7.1994 have been withdrawn and in its place Board of Directors of the FCI has taken a decision that now work of HTC be allotted by inviting tenders and the cooperative societies including labour cooperative societies may participate in the tender inquiries at par with other private parties as handling and transport contractors. The FCI is a statutory body and the Board of Directors control its functioning. Now if the Board of Directors had themselves earlier taken decision to grant certain concessions to the labour cooperative societies, if it felt later that these concessions were not workable, certainly the Board of Directors could change its policy and frame a new policy for allotting HTC work as is now incorporated in circular dated 21/22.11.1996, more so, when through this circular labour cooperative societies have not at all been barred from getting HTC contract and the only change which has been made is that they can get the contract by competing with other contractors who may offer tenders floated for the purpose.
8. Learned counsel for the respondents submitted that the labour cooperative societies having been debarred from participating in the flotation of tenders by the FCI, the allotment of HTC work by the FCI through floating tenders will give rise to the quotation of competitive rates by them and in this competition, the FCI will gain and there will be no fleecing of the FCI by the labour cooperative societies who create monopoly in their favour if contract is allotted on negotiated rate to them as negotiated rate will be the same by each labour cooperative society. It was submitted that there is no reason why the FCI could not depart from its earlier policy when the FCI has felt that its earlier policy was impinging upon its finances to its detriment and to the benefit of labour cooperative societies. In the circular dated 21/22.11.19% (ibid), such cooperative societies have also been allowed to participate in tender inquiries at par with other private parties as handling and transport contractors as per usual terms and conditions in future for obtaining handling and transport contracts. It was further submitted by the learned counsel for the respondents that the plaintiff society has not challenged the vires of the circular dated 21/22.11.1996 and, therefore, the plaintiffs' prayer for the grant of injunction had to be decided on the assumption that now circular dated 21/22.11.1996 issued by the FCI headquarter, New Delhi is to govern the allotment of HTC work. There is no reason why the FCI could not depart from its earlier policy decision when it finds that the earlier policy decision was not working to the benefit of the FCI. In this case, I do not think there is any violation of a legal obligation inhering in favour of the plaintiff society by the FCI. Right of the labour cooperative societies to participate-in the tender inquiries at par with other private parties as handling and transport contractor as per usual terms and conditions in future for obtaining handling and transport contracts has been preserved in the new policy decision.
9. Facts involved in civil suit No. 144/9.10.1998 which has given rise to C.R. No. 2997 of 1999 are para materia with the facts of civil suit No. 143/9.10.1998 which has given rise to C.R. 2998 of 1999 and, therefore, the facts of civil suit No. 144/9.10.1998 need not be set out. Both these revisions will be disposed of through this common order.
For the reasons given above, 1 am of the opinion that there is no breach of any legal obligation cast upon the FCI in favour of the labour cooperative societies in the matter; of allotment of handling and transport work in the new policy decision.
10. These revisions fail and are dismissed.