S. Palanivelu, J.
1. Both these writ appeals are directed against the order of the learned single Judge dated 15.5.2002, made in W.P. No. 8 of 1996. The said writ petition was filed by N.L.C. INDCO SERVE Thozhilalar Uzhiyar Sangam, praying to issue a Writ of Mandamus to forbear the first respondent therein viz. the Neyveli Lignite Corporation, its men, officers, agents and servants from absorbing any contract labour or any other employee either permanently or temporarily in the first respondent Corporation without following the seniority on the basis of the date of entry in Corporation either as a contract labour or directly and consequently direct the first respondent to absorb and regularise the members of the petitioner union as employees of the first respondent Corporation with all monetary and service benefits with effect from the date of entry into service in the first respondent Corporation either as a contract labour or otherwise.
2. For the sake of convenience, the status of the parties is referred to as per their ranking in the Writ Petition No. 8 of 1996.
3. The avernments of the Writ Petition, in short, are as follows:
The first respondent is a Public Sector Undertaking. N.L.C. Indco Serve Thozhilalar uzhigar Sangam is represented by its President N. Narayanan. The Neyveli Lignite Corporation (herein after referred to as NLC) and the Manging Director N.L.C. Indco Serve are the first and the third respondents in the Writ Petition. The second respondent therein is Assistant Commissioner of Labour (C), Shastri Bhavan at Madras. The fourth to tenth respondents are various labour unions, whose members are employees of NLC. The members of the petitioner union are engaged through contractors as employees for the effective functioning of the first respondent. They had been continuously employed as such ranging from 15 years to 19 years. As per the provisions of the labour welfare legislations such as Industrial Disputes Act, 1947, by this time, the first respondent should have absorbed all the members of the petitioner union as permanent employees on regular basis and the failure on their part would amount to 'unfair labour practice'. The NLC Industrial Co-operative Service Society Limited (in short as NLC.) was formed on 10.05.1990 with the below mentioned object:
The object of the society is to take and execute various items of work entrusted to it by the Neyveli Lignite Corporation Ltd., within its area of operation and to provide employment to its members/workers and work for economic uplift bearing in mind their object, the workman shall always endeavour for satisfying the Neyveli Lignite Corporation Ltd., by diligent and efficient work.
4. The said society is a registered one under the Tamil Nadu Co-operative Societies Act. The N.L.C. Indco serve is a State within the meaning of Article 12 of the Constitution of India. There are nearly 1,400 employees, who are the members of the petitioner union. It is the duty of N.L.C. Indco Serve to regularise the members in the first respondent Corporation on the basis of seniority fixed on the strength of the date of entry into service therein either through contractors or directly. The petitioner's union members are entitled to claim absorption with seniority. Hence, the petitioner union forwarded a written representation dated 29.06.1994 to the Chief Minister's Cell and various authorities narrating their grievances in detail. The first respondent even after getting it have not taken any steps. Again, a consideration petition dated 24.04.1995 was given to the second respondent. On the basis of the consideration petition, conciliation proceedings were initiated. However, no effective result has been achieved and the Management is keeping quiet without appearance.
5. When the matter stood thus, respondents 1 and 3 are absorbing members of N.L.C. Indco Serve as well as non-members, as per their whims and fancies without following any principle including the one of seniority. For instance, first member of the N.L.C. Indco Serve himself remains unabsorbed, even after he has put in nearly 20 years of service. When consideration petition is pending, the first respondent ought to have waited for the outcome of the same. But, without appearing before the second respondent, they are now proceeding with the absorption. The act of 1 and 3 respondents is discriminatory and bristled with arbitrariness being violative of Articles 14 and 16 of the Constitution of India and also is with a malafide motives. There is no difference between the regular employee and the contract labourers, since both have been doing the same duties and infact, the contract labourers are turning out more work. Hence, the writ petition.
6. The contentions contained in the counter affidavit of the first respondent, in brief, are as follows:
N.L.C. is a Company registered under the Company's Act, 1956. For effective functioning of the Corporation regular workforce of skilled and un-skilled were recruited and duly employed. To meet contingent needs, there has been a practice of employing contract labourers with respect to the above said two categories of workmen. The practice of employing contract labourer had many pitfalls. There were complaints that the contractors did not disperse wages due to the labourer even though the amounts were duly billed on NLC and paid by NLC. After detailed consideration, N.L.C. Indoserve Corporation, a Society, was registered on 10.05.1990. Pursuant to the advent of N.L.C. Indoserve, the requirement of contract labour came down substantially. The said society is a separate legal entity, which is bound by its own bye-laws and its affairs are managed by a Special Officer appointed for the purpose by the Government of Tamil Nadu, even though there is only one recognised Trade Union, the numerous other unions are in existence with respect to different groups of employees of NLC. Keeping in view, the larger interests of the employees and also to ensure industrial harmony, all associations with their employees are controlled by NLC with a Joint Council of Unions, which consists the following seven unions and they represent over 90% of the employees.
The name of the unions are as follows:
1. THO MU SA (NLC Workers' Progressive Union)
2. ANNA THO MU SA (NLC Anna Workers' & Staff Union) 3.I.N.T.U.C. (NLC National Workers' Union)
4. N.T.U (National Trade Union)
5. EMP.UNION (NLC Employees' Union).
6. (H.M.S) (NLC Amalgamated Workers' Union)
7. CITU (NLC Labour & Staff Union).
7. From 1993 onwards, the demand for absorption of N.L.C. Indco serve workers came to be canvassed by the Joint Council of Unions and discussions took place between NLC and the Joint Council of Unions, which culminated in reaching a settlement in terms of Section 12 of the Industrial Disputes Act, 1947, on 18.05.1995. Under the settlement, the management agreed to absorb N.L.C. Indcoserve workers in stages. The first stage involved absorption over a period of five years, of all employees in the production units, both skilled and un-skilled subject to fulfilling other conditions. For this purpose, a list of 700 candidates was drawn up and they were subjected to a test and interview. Before any appointment could be effected, the writ petition was filed and interim stay was also obtained resulting standstill of appointment process. The details of service rendered by the persons as contract labourers under private contractors are not maintained by the Corporation, nor the same have been supplied to it. It is not possible to ascertain as to how long the labourers worked as contract labourers with the unions. The petitioner union has omitted to supply details of its members. If the petitioner union has got any grievance, it ought to be agitated by them separately through N.L.C.Indoserve and not from the Corporation. The claim of petitioner union that N.L.C. Indoserve is a State within the meaning of Article 12 is misconceived and does not stand the test of law or logic. The above said statement contemplates only absorption and not regularisation. The concept of seniority does not arise in the guise of absorption. In any case, the seniority in N.L.C of those absorbed will reckon from the date of absorption and not from any earlier date. It is denied that this respondent deliberately kept away from any such conciliation proceedings. The knowledge of pending conciliation proceedings came to be known to NLC only from the writ petition. The Writ Petition is not maintainable since the petitioner should exhaust the remedy before forum of conciliation machinery before rushing to the Court. There is no malafide or arbitrary exercise of powers of NLC. The proposed absorption covers only N.L.C. Indco serve employees and does not cover other contract labour employees. Section 12(3) settlement is legal and valid which is not vitiated merely because petitioner's union was not a party to it. It is settled principles of law that unions representing existing workers are within their rights to espouse the cause of contract labour for absorption. Hence, the petition is liable to be dismissed.
8. The learned single Judge, by the order dated 15.5.2002, has partly allowed the said writ petition. The operative portion of the said order of the learned single Judge is extracted below:
For the aforesaid reasons, I am inclined to allow the writ petition to extent of giving a direction that while considering the question of regular absorption in the categories indicated in the settlement, the case of all the other workers coming within the eligible category should be considered according to the seniority and the case of workers should be ignored merely because he has not been admitted as a member of INDCO SERVE. It is made clear that the persons who have already been absorbed after stay order was vacated should not be disturbed by this order.
As against the said order of the learned single Judge, W.A. No. 2045 of 2002 has been preferred by the first respondent therein viz. the Neyveli Lignite Corporation Limited and W.A. No. 2529 of 2002 has been preferred by the respondents 9 and 10.
9. For better understanding of the dispute in issue, narration of the settlement reached under Section 12(3) of the I.D. Act is indispensable, which goes thus:
i) It is agreed by the Management that the workers engaged by Indco Serve in various production units as on 18.05.1995 in N.L.C. shall be absorbed in a phased manner over a period of five years. This absorption will, however, depend upon requirements, qualifications, length and nature of experience of the persons so engaged and subject to a test and selection by competent executives.
ii) It is agreed by the parties that it will be left to the Management as to how many workers are to be absorbed from one particular unit at a time and the phases in which the process is to be done and the periodicity when the question of absorption will be reviewed and decided.
iii) It is further agreed that based on the experience of working of this system during the aforesaid five years, the issue relating to remaining workers engaged by Indco Serve in non-production Units will be taken up for discussion.
10. The contention of the first respondent Corporation is two pronged. The first one is, when the conciliation proceedings were pending before the competent labour officer, seeking remedy before the court of law is not legally sustainable. Nextly, the petitioner's union members are not entitled to claim seniority, since the length of service of each and every individual could not be ascertained.
11. It is admitted fact that the first respondent Corporation has whole-heartedly accepted to entertain the request of the petitioner's union to the extent of absorbing its members, but not on the basis of seniority. Both the learned Counsel appearing for respective parties have put forth their contentions vehemently so as to maintain their claims. As far as the first attack of NLC is concerned, it is the reply emanates from the petitioner union that 12(3) settlement dated 18.05.1995 came to existence behind the back of NLC Indco Serve, which had no knowledge about it and it is not binding upon the society or the petitioner's union. It is to be borne in mind here that the conciliation proceedings were initiated at the behest of the petitioner's union for absorption with seniority. In that course, NLC entered into the settlement with the Council of Joint Unions comprising seven other Labour Unions, which are parties to the Writ Petition. The reason for non-inclusion or omission of N.L.C. is not explained. Even though the subsequent developments happened in the first respondent Corporation would go to the effect that absorption process was undertaken by them, it will not justify the non-inclusion of N.L.C. Indcoserve.
12. It is stated that as per the agreement reached the absorption was made in three phases. In the first and second phase, during 1996 and 1997, Indcoserve Workmen numbering 774 and 716 were absorbed respectively and there was a proposal for the third and fourth phases to absorb 1500 Indco Serve workmen over a period of 12 months from December, 1999. It is contended that the benefit under the settlement under Section 12(3) of the Act is being duly extended to Indco Serve workmen and the objection that it was not added as a party is futile.
13. We are unable to countenance such contention for the reason that though absorptions were made proposed by NLC in terms of settlement under Section, 12(3) of the Act, it does not involve element of seniority in the process. So, it could not be stated that the steps taken in this respect by NLC would reflect the claim of the petitioners union. It can also be stated that, had Indcoserve been represented during the negotiations, the terms of settlement would have been different and the litigation might not have come up before the Court. The necessary corollary thereof is, absence of NLC Indco Serve in the conciliation proceedings is manifest which leads to vitiation of the settlement.
14. The other limb of contention of NLC is, the petitioner's union should have exhausted the remedy from the second respondent or through the forum constituted under labour legislations, but seeking writ jurisdiction of this Court is not tenable.
15. At the outset, the petitioner union had given a written representation on 29.06.1994 to the Chief Minister's Cell and various authorities. It is contended that NLC had turned Nelson's eye to the claim of the petitioner union. Again on 24.04.1995, a consideration petition was forwarded by the petitioner union to the second respondent and on the basis of which, the conciliation proceedings were initiated. It is quintessence and outcry of the petitioner union that when the conciliation proceedings were pending before the labour authority, NLC started absorbing the members of Indco Serve and non-members as a whole as per their whims and caprice flouting the principle of seniority, which is prejudicial to the interests of NLC Indco Serve workmen including petitioner union. When NLC is in utter disregard of request for fixing seniority for workmen in the process of absorption, there is no impediment for the petitioner union to seek remedy from the Court of Law. The petitioner union contends further, coupled with the circumstances, where the petitioner union was deliberately ignored in the deliberation for reaching settlement under Section 12(3), invoking writ jurisdiction of the High Court could very well be justified. We find considerable force in the above said contentions and observe that invoking the writ jurisdiction of this Court is quite appropriate.
16. Both the learned Counsel for the petitioner and the first respondent have taken us through the decisions of Hon'ble Supreme Court with regard to the fixing of seniority during the process of absorption of workmen. Both of them relied upon a decision of the Apex Court reported in in Inder Pal Yadav and Ors. v. Union of India and Ors. , wherein Their Lordships were pleased to observe that absorption of workmen should be in order of length of continuous service. In the said case, it is held as follows:
6. To avoid violation of Article 14, the scientific and equitable way of implementing the scheme is for the Railway administration to prepare, a list of project casual labour with reference to each division of each railway and then start absorbing those with the longest service. If in the process any adjustments are necessary, the same must be done. In giving this direction, we are considerably influenced by the statutory recognition of a principle well known in industrial jurisprudence that the men with the longest service shall have priority over those who have joined later on. In other words, the principle of last come first go or to reverse it first come last go as enunciated in Section 25G of the Industrial Disputes Act,1947 has been accepted. We direct accordingly.
17. While discussing the issue, the Supreme Court categorically laid down that the workmen with longest service shall have priority over those who have joined later on. Hence, the request for fixing seniority at the time of absorption holds legally good.
18. Learned Counsel for the petitioner Mr. R. Singgaravelan also relied upon the following two decisions of the Supreme Court in support of his contention, in which the principles have been set out as follows:
1. In Bal Kishan v. Delhi Administration and Anr. reported in : (1990)ILLJ61SC , in paragraph 10, it is decided thus:
In service, there could be only one norm for confirmation or promotion of persons belonging to the same cadre. No junior shall be confirmed or promoted without considering the case of his senior. Any deviation from this principle will have demoralising effect in service apart from being contrary to Article 16(1) of the Constitution.
2. In National Federation of Railway Porters, Vendors & Bearers, Petitioners v. Union of India and Ors. reported in : (1995)IILLJ712SC , it is held as follows:
6.In the matter of absorption of Railway Parcel Porters or contract labour as permanent and regular Railway Parcel Porters, the persons who have worked for longer periods as contract labour shall be preferred to those who are put in shorter period of work.
19. The contention of learned Counsel for the petitioner gained momentum, while referring to the dictum laid down in the above said rulings and he submitted that in the matter of absorption, non-consideration of seniority of the workmen is highly detrimental and if seniority was not considered, then the juniors to the particular workmen could become seniors in rank, who would consequently be benefited with all the service conditions, by means of which, the rights of the workmen would get affected. It is the principle laid down by the Supreme Court also that promotion or confirmation of a junior would have demoralising effect in service, apart from being contrary to Article 16(1) of the Constitution.
20. In case, if the seniors are not found eligible to be promoted or regularised in service, then the Management may embark upon promoting the juniors for which there could be no stumbling block. But, if the ability or caliber of the senior workman was not at all taken up for consideration and if the Management proceeds to promote or regularise the junior members, it is classical violation of the provisions of law. As far as the fact of the present case are concerned, there is no contention on the part of the first respondent to the effect that there is no eligible senior members.
21. Learned Standing Counsel of the first respondent Corporation Mr. N.A.K. Sharma garnered support from the Judgments of the Supreme Court to strengthen his contentions. It is his submission that if the petitioner union is aggrieved by the terms of settlement and if the interpretation is injurious to their rights in their opinion, they may very well refer the question to Labour Court or Tribunal as the case may be. Stressing this point, he cited 1988 L.I.C.1448 reported in Bieco Lawrie Sramik Karmachari Union and Ors. v. Biecco Lawrie Ltd and Ors. Paragraph 21 of the said judgment is extracted below:
21. In any event, if there is any interpretation of settlement involved, as in the present case before me, the parties are at liberty to take recourse to the provision of Section 36A of the Industrial Disputes Act, 1947, which runs as follows:
36A.Power to remove difficulty-
If, in the opinion of the appropriate Government, any difficulty or doubt arises as to the interpretation of any provision of an award or settlement, it may refer the question to such labour court, tribunal or national tribunal, at it may think fit.
22. As for the petitioner's union, they are not at all a party to the settlement and hence the interpretation of the terms of settlement is not at all arising in this case. Conciliation proceedings were initiated only under the representation of the petitioner's union. In I.T.C. Ltd Workers Association v. The Man of I.T.C. Ltd reported in J.T. 2002 (1) SC 511 the Apex Court has formulated guidelines to the effect that in exceptional circumstances alone the settlement can be ignored and the question of non-inclusion of particular union will not form base for striking down the settlement. The operative portion of the said Judgment goes thus:
21. What follows from a conspectus of these decisions is that a settlement which is a product of collective bargaining is entitled to due weight and consideration, more so when a settlement is arrived at in the course of conciliation proceeding. The settlement can only be ignored in exceptional circumstances viz., if it is demonstrably unjust, unfair or the result of mala fides such as corrupt motives on the part of those who were instrumental in effecting the settlement. That apart, the settlement has to be judged as a whole, taking an overall view. The various terms and clauses of settlement cannot be examined in piecemeal and in vacuum.
23. The Honourable Supreme Court has observed that if the settlement was unjust or unfair or the result of malafides, it can be ignored. As far as the impugned settlement is concerned, it does not reflect the basic claim of the petitioner union. Viz., the fixing of seniority. It is made clear herein that the terms of settlement do not contain the absorption with seniority. If that be so, it can be observed that it is an unjust settlement brought without knowledge to the petitioner union and hence, the exceptional circumstance as held by the Apex Court has arisen to ignore the settlement.
24. Learned Counsel for the first respondent also placed much reliance upon the decision reported in J.T. 2006 (4) SC 593, Transmission Corporation A.P. Ltd. and Ors. v. P. Ramachandra Rao and Anr., wherein Their Lordships have held as follows:
16. As observed by this Court in Tata Engineering's case (supra) a settlement cannot weigh in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which comes into play when an industrial dispute is under adjudication. If the settlement had been arrived at by a vast majority of concerned workers with their eyes open and was also accepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding the reference made under the Act merely because a small number of workers were not parties to it or refused to accept it or because the Tribunal was on the opinion that the workers deserved marginally higher emoluments than they themselves though they did. The decision in Herbertsons Ltd. v. Workmen was followed.
25. While referring the decision, it is argued that since a large number of trade unions participated in the conciliation proceedings and brought the settlement, merely because limited members did not know about the existence of the settlement, the said circumstance would in no way vitiate the same. But the facts in the present case are quite distinguishable.
26. It is an admitted fact that NLC Indco Serve and the petitioner's union contend that a large number of members are available with them and they are not few nor small number of members. Hence, the first respondent cannot take recourse to the above said decision.
27. We have given our anxious consideration to the respective contentions. It is not the question of scuttling the settlement by an unorganised group of contract labourers. The petitioner union is an organised one and it is duly registered under the Trade Unions Act, 1926. By no stretch of imagination, it could be stated that NLC Indco Serve constitutes a minority union. On the face of it, the settlement appears to discourage the claim of the petitioner's union with regard to the aspect of seniority. The first respondent has failed to show that the settlement was fair and just and in none of the decisions relied by the first respondent it is ruled that the matter of seniority could be skipped, while the process of absorption of workers who have put in long service in the establishment.
28. Per contra, the decisions which were cited by the learned Counsel for the petitioner have authoritatively hold that the fixation of seniority at the time of absorption is essential one and non-observation of which would be violative of the provisions of the Constitution.
29. The first respondent Corporation would contend that they do not have the particulars of service of the contract labourers with them and it would be a difficult and cumbersome process to ascertain them. However, a reply is projected from the petitioner union that since the wages had been paid by the Corporation, definitely they should have been maintaining the accounts and names of the contractors and the employees supplied by them, with reference to the dates of their employment. The said contention is acceptable. The petitioner has also produced list of its employees with relevant particulars in the additional typed set of papers.
30. The bottom line contention of the petitioner union is that the first respondent Corporation is bound to render seniority to the employees proposed to be absorbed. The absorption is the concept based on the employment of the employees, who had already served under the establishment. If there were no previous relationship with the establishment, there would be no question of 'absorption' by it. In this context, it ought to be observed that when an employee is entitled for absorption, he is also eligible to get seniority duly fixed from the date of his original appointment. He can in no way be deprived of his past service rendered in the establishment. There could be no legal basis to strip the employee off the entitlement to get seniority. If there be any absorption, the necessary corollary is that he is entitled to get seniority. The previous service with the establishment shall be counted for the purpose of determining his seniority and the said right cannot be defeated or jeopardised.
31. When the employees were entitled to get the seniority legally, if they are denied such conferment, the doctrine of 'legitimate expectation' would come to play and denial of seniority to the workmen eligible for it, the said expectation gets a back seat. In this matter, the Corporation does not put forth any plea to the effect that meritorious junior workmen could be left out, if the employees with the past service were given seniority. In such a case, 'legitimate expectation' of the aspiring employees must be respected. If seniority is denied to the workmen their 'legitimate expectation' dashes off its hopes. It is the pleading of the Corporation, that, to meet contingent needs, there has been practice of employing contract labour both with respect to skilled and unskilled duties. If that be so, though they were paid by the Corporation for service rendered to it, still there had been a bondage to the establishment. In other words, it may be stated, had the Corporation recruited the employees on a regular basis, it might have granted all the privileges and attendant benefits including seniority to them.
32. No doubt, the right to seek seniority is not a vested right in a workman. But, it is an acquired right, which cannot be taken away by operation of valid law.
33. The Hon'ble Supreme Court, while laying down the dictum to be adopted for reckoning the seniority, observed in the case of Ashok Gulati and Ors. v. B.S. Jain and Ors. reported in ., as follows:
22. According to the accepted canons of service jurisprudence, seniority of a person appointed must be reckoned from the date he becomes a member of the service. The date from which seniority is to be reckoned may be laid down by rules or instructions (a) on the basis of the date of appointment (b) on the basis of confirmation (c) on the basis of regularisation of service (d) on the basis of length of service or, (e) on any other reasonable basis.
The category 'on any of the reasonable basis', can be made applicable to the facts of the present case.
34. We also express emphatically that the service in the past for all practical purposes of seniority is as good as service on a regular basis.
35. It is well settled proposition that in the absence of any rule, the length of continuous officiation is a principle of determining the seniority. The Supreme Court in the case of Union of India v. Ansusekhar Guin and Ors. reported in AIR 1989 SC 377 : 1989 SCC (LS) 2004 has laid down that continuous length of service for fixation of seniority is a well settled principle, in the absence of any prescribed rule for determination of seniority.
36. Concededly, in this case, there is no rule existing in the first respondent Corporation with regard to the service conditions pertaining to the contract labourers inclusive of fixation of seniority. In such circumstance, the length of previous continuous service, in accordance with relevant labour legislations, has to be taken for consideration to determine the seniority.
37. For the foregoing reasons, we are of the considered view that the settlement under Section 12(3) of the Act is does not bind the petitioner's union. Consequently, the direction of the learned singe Judge stands confirmed since we do not find any infirmity to disturb or interfere with the same. The appeals are devoid of merits. They suffer dismissal.
In fine, both these appeals are dismissed. No costs. Consequently, connected MPs are closed.