Madras High Court

Neyveli Lignite Corporation Ltd vs N.L.C.Indco Serve Thozhilalar on 16

February, 2008

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 16.2.2008
CORAM:
THE HONOURABLE MR.JUSTICE ELIPE DHARMA RAO
AND
THE HONOURABLE MR.JUSTICE S.PALANIVELU

W.A.Nos.2045 & 2529 of 2002

and M.P.Nos.3458,4266 of 2002 and 4190 of 2003 and
W.V.M.P.No.2149 of 2003 in M.P.No.2458 of 2002

W.A.No.2045 of 2002:

Neyveli Lignite Corporation Ltd.,

rep.by its Chairman,
Neyeli-607 801 ..
Appellant

Vs.

1. N.L.C.INDCO SERVE Thozhilalar

Uzhiyear Sangam,
(Regn.No.6/SAV (Trade Union Act,1926)
Neyveli, South Arcot District,
rep.by its President-K.Paramasivam
(The name of the President is substituted
 as per the order of the court,
dated 20.3.2003 made in WAMP.1149/2003)
2.The Assistant Labour Commissioner (C),
Shastri Bhavan,
26, Haddows Road,
Chennai.

3.The Managing Director,

N.L.C.INDCO SERVE,
Old C.M.C.Complex,
(Opp.Thermal Power Station-I)
Neyveli-607 807.

4.N.L.C.National Workers Union,

(I.N.T.U.C.Regn No.6/SAT,
(Neyveli) D-83, Block No.26,
Rajaji Road, Neyveli-1,
rep.by its General Secretary.

5.N.L.C.National Trade Union (NTU)

Regn.No.180/SAT (Neyveli),
South Arcot-Vallalar District,
rep.by its General Secretary.

6.N.L.C.Labour & Staff Union,

(C.I.T.U).Regn No.1803,
Neyveli Lignite Corpn.Ltd,
Neyveli,
rep,by its General Secretary.

7.N.L.C.Amalgamated Labour &

Staff Union (H.M.S.),
Regd.No.224/SAT,
Neyveli,
rep.by its General Secretary
8.N.L.C.Anna Workers & Staff Union,
Reg.No.3816 (ATP),
Neyveli,
rep.by its General Secretary
9. NLC Workers Progressive Union,
rep.by its General Secretary,
R.Gopalan,
268-B Block No.29,
Neyveli-607 807

10.NLC Employees Union

rep by its General Secretary,
R.Tamilsarasan,
Neyveli-1. ...
Respondents

W.A.No.2529 of 2002:
1.NLC Workers Progressive Union,
rep.by its General Secretary,
R.Gopalan,
268-B Block No.29,
Neyveli-607 807

2.NLC Employees Union

rep by its General Secretary,
R.Tamilsarasan,
Neyveli-1.
(Cause Title accepted as per the
order of the Court dated 8.8.2002,
made in WAMP.No.4063/2002) ...
Appellants

Vs.

1. N.L.C.INDCO SERVE Thozhilalar

Uzhiyar Sangam,
(Regn.No.6/SAV (Trade Union Act,1926)
Neyveli, South Arcot District,
 rep.by its President-K.Paramasivam
(The name of the President is substituted
as per the order of the court,
dated 12.8.2003 made in WAMP.3505/2003)

2.Neyveli Lignite Corporation Ltd.,

rep.by its Chairman,
Neyeli-607 801

3.The Assistant Labour Commissioner (C),

Shastri Bhavan,
26, Haddows Road,
Chennai.

4.The Managing Director,

N.L.C.INDCO SERVE,
Old C.M.C.Complex,
(Opp.to Thermal Power Station-I)
Neyveli-607 807.

5.N.L.C.National Workers Union,

(I.N.T.U.C.Regn No.6/SAT,
(Neyveli) D-83, Block No.26,
Rajaji Road, Neyveli-1,
rep.by its General Secretary.

6.N.L.C.National Trade Union (NTU)

Regn.No.180/SAT (Neyveli),
South Arcot-Vallalar District,
rep.by its General Secretary.

7.N.L.C.Labour & Staff Union,

(C.I.T.U).Regn No.1803,
Neyveli Lignite Corpn.Ltd,
Neyveli, rep,by its General Secretary.

8.N.L.C.Amalgamated Labour &

Staff Union (H.M.S.),
 Regd.No.224/SAT,
Neyveli, rep.by its General Secretary
9.N.L.C.Anna Workers & Staff Union,
Reg.No.3816 (ATP),
Neyveli,
rep.by its General Secretary

* * *
Writ Appeals filed under Clause 15 of the Letters Patent
to set aside the order passed in W.P.No.8 of 1996 dated
15.05.2002.
* * *
Writ Appeal No:2045 of 2002

For Appellant : Mr.N.A.K.Sharma

For R-1 : Mr.R.Singgaravelan
For others : No appearance

Writ Appeal No.2529 of 2002

For Appellant : Mr.A.V.Bharathi

For R-1 : Mr.R.Singgaravelan
For R-2 : Mr.N.A.K.Sharma
Others : No appearance

* * *
COMMON JUDGMENT

S.PALANIVELU, J.

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 petitioners union members are entitled
to claim absorption with seniority. Hence, the petitioner union forwarded a written
representation dated 29.06.1994 to the Chief Ministers 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 Companys 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 WorkersProgressive Union)

2.ANNA THO MU SA (NLC Anna Workers& Staff Union) 3.I.N.T.U.C.(NLC National

WorkersUnion)

4.N.T.U (National Trade Union )

5.EMP.UNION (NLC EmployeesUnion).

6.(H.M.S) (NLC Amalgamated WorkersUnion)

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 petitioners 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 petitioners
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 petitioners 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
petitioners union. It is to be borne in mind here that the conciliation proceedings were
initiated at the behest of the petitioners 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 petitioners 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 Ministers Cell and various authorities. It is contended that NLC had turned
Nelsons 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 Honble 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 (1985) 2 Supreme Court Cases 648, in Inder Pal Yadav and others
Vs. Union of India and others = (1985) II LLJ 406, 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 Art.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 S.25-G 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 Vs. Delhi Administration and another reported in AIR 1990 Supreme
Court 100, 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 Art.16(1) of the Constitution.

2.In National Federation of Railway Porters, Vendors & Bearers, Petitioners Vs. Union of
India and others reported in AIR 1995 Supreme Court 1617, = 1995 Supp(3) SCC 152 in
paragraph 6(6), 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 LAB.I.C.1448 reported in Bieco Lawrie Sramik Karmachari Union and others Vs.
Biecco Lawrie Ltd and others. 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 S.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 petitioners 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 petitioners union. In
I.T.C.Ltd Workers Association Vs. The Man of I.T.C.Ltd reported in J.T.2002 (1)
Supreme Court 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) Supreme Court 593, Transmission Corpn., A.P.Ltd & Others Vs.
P.Ramachandra Rao & Another, wherein Their Lordships have held as follows:-

16. As observed by this Court in Tata Engineerings 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. Vs. Workmen (1977 (2) SCR 15) 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 petitioners 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 petitioners 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 absorptionby 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 expectationdashes 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 Honble Supreme Court, while laying down the dictum to be adopted for
reckoning the seniority, observed in the case of Ashok Gulati and others Vs B.S.Jain and
others reported in AIR 1987 Supreme Court 424., 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 Vs. Ansusekhar Guin and others reported in AIR 1989 Supreme Court
Batch 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 petitioners 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.

(E.D.R.,J)
(S.P.V.,J)
16.2.2008

Index : Yes / No
Internet : Yes / No
ssm/Rao
To:

1.The Chairman,
Neyveli Lignite Corporation,
Neyveli Lignite Corporation,
Neyveli-607 807.

2.The Assistant Labour Commissioner (C),

Shastri Bhavan,
26, Haddows Road,
Chennai.

ELIPE DHARMA RAO, J.

AND
S.PALANIVELU, J.