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Legislative Competence of the Parliament - entry in C.List

Posted on 13 August 2008 by KANDE VENKATESH GUPTA

Court

Supreme Court



Brief

Clause (1) of Article 254 speaks about over-riding effect of a law made by Parliament which the Parliament is competent to enact. Same is the position in respect of a provision of existing law with respect of one of the matters enumerated in concurrent list which is subject to operation of Clause (2). So far as Clause (2) is concerned when a law is made by the legislature of the State with respect to one of the matters enumerated in the concurrent list and it contains any provision repugnant to earlier law made by Parliament or in the existing law with respect of that matter then the law so made by legislature of the State shall if it has been reserved for the consideration of the President and has received the assent prevail in that State. In that case, the assent of the President becomes the determinative factor. The proviso to Clause (2) curtails the ambit of Clause (2) by providing that Parliament can enact a law with respect to the same matter in which the State Legislature has made the law and by such law the Parliament can add to, amend, vary or repeal the law made by the legislature of the State. In other words, in terms of the proviso in Article 254 the legislative power of the Parliament has been enlarged in the sense that it can add to, amend, vary or repeal the law made by the legislature of the State.



Citation

Delivered on 11-08-2008 not yet reported



Judgement

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 5494-5505 OF 2005


N.T.P.C. & Ors. .....Appellants

Versus

Badri Singh Thakur & Ors. ....Respondents


[With C.A. Nos. 2140/2006, 5506-5507/2005, 5649/2005
and Writ Petition No.529 of 2005)




JUDGMENT


Dr. ARIJIT PASAYAT, J.



1. Challenge in these appeals and writ petition are to the

order passed by a Division Bench of the Madhya Pradesh High

Court. By a common order several Letters Patent Appeals were

disposed of. The Letters Patent Appeals were filed by present

respondents on the ground that they have been employed as
Electricians since 1987 as workmen under Appellant No.1 i.e.

National Thermal Power Corporation (in short the

`Corporation') for maintenance of Korba Super Thermal Power

Project colonies. Though the writ petitioners were not directly

employed by the Corporation, but were employed through

contractor. Prior to such engagement they were employed

through other contractors. It was the stand in the writ petition

that their work was supervised by competent officers of the

Corporation and the materials for their job were supplied by

the Corporation and they worked for the colonies owned and

controlled by the Corporation and series of contracts have

been entered into by the Corporation with the contractor. It

was therefore their stand that they have to be treated as

employees of the Corporation. It was stated that the

Corporation wanted to avoid absorption of contract labour

despite their perennial nature of work. With a view to frustrate

mandate of this Court, they engaged them on job work basis

and the whole endeavour was to defeat the absorption of the

contract labours. It was claimed before the learned Single

Judge that the M.P. Industrial Relation Act, 1960 (in short

2
`1960 Act') governs the conditions of the employment between

the Corporation and the contract labour and they were

entitled to the same wages as the workmen of the Corporation

and there can be abolition of the contract labour on regular

basis.



2. Returns were filed by the Corporation. Stand of the

Corporation was that it is a registered establishment under

Section 7 of the Contract Labour (Regulation and Abolition)

Act, 1970 (in short the `Act'). The contractor who was

impleaded as respondent No.4 in the writ petitions was

awarded the contract after inviting tenders. The contractor

employed writ petitioners and there was no relationship of

masters and servants between the Corporation and the writ

petitioners. It was canvassed that the writ petitioners had

initiated conciliation proceedings under the 1960 Act and

once they have taken recourse to alternative remedy available

to them under industrial law they cannot invoke the

extraordinary jurisdiction of the Court. The contractor who

was impleaded as respondent No.4 supported the stand of the

3
Corporation and its functionaries. It was stated that it is a

partnership firm and it had full control over the employees as

the salaries were being paid by the firm. It was also stated

that it had obtained a licence under Section 12 of the Act and

was entitled to engage 75 workmen as per the said licence. It

was pointed out that the writ petitioners were not permanent

employees and their services last during the continuance of

the contract and it had come to an end after the term of the

contract had expired.



3. Before the learned Single Judge it was urged by the writ

petitioners that the provisions of 1960 Act are applicable to

the Corporation and inasmuch as in Item No.10 of the

Notification dated 31.12.1960, there is a mention that the said

Act is applicable to electricity generation and distribution in

which the Corporation was engaged and was thus covered by

all corners of the Statute.



4. Reliance was placed by the present appellants on Entries

22, 23 and 24 of the concurrent list of Schedule VII of the

4
Constitution of India, 1950 (in short `Constitution') to buttress

the contention that once legislation is passed by the

Parliament in respect of any field covered under the

Concurrent List, the same would have preference over the

State law.



5. It was also submitted that Act in essence obliterated the

definition of employer and employee under the 1960 Act.

Learned Single Judge held that there was hardly any doubt

that the relationship of employer and employee is established;

that the Act is applicable to the writ petitioners and, therefore,

they cannot rely on the provisions of 1960 Act for enforcing

their claim. It was also held that they being the contract

labours are not employees of the Corporation within the

meaning of Section 2(13)(a) read with sub-clause (e) of Section

2(14) of 1960 Act after coming into force of the Act.



6. A prayer had been made by the writ petitioners to absorb

them as its workmen for the Corporation as they are contract

labours. Learned Single Judge held that there was no

5
Notification issued by the appropriate government abolishing

the contract labour under Section 1 of the Act. There was no

scope for granting any relief. It was held that the decision in

Air India Statutory Corporation etc. v. United Labour Union

and Ors. etc. (AIR 1997 SC 645) does not apply to the facts of

the case.



7. Before the Division Bench, stand of the writ petitioners

who were the appellants was that learned Single Judge was

not justified in holding that 1960 Act had no application

because of the Act inasmuch as no Notification was issued

under Section 10 of the Act and in the absence of a

Notification the conclusion arrived at is bound to suffer.



8. Stand of the present appellants was that the writ

petitioners cannot claim to be employees of the principal

employers and the question of absorption does not arise in

view of what has been stated by this Court in Steel Authority

of India Ltd. v. National Union Waterfront Workers (2001 (7)




6
SCC 1) which inter-alia over-ruled the earlier decision in Air

India's case (supra).



9. The High Court held that the object of the Act was to

regulate the employment of the contract labour in certain

establishments and to provide for its abolition in certain

circumstances and the matters connected therewith.

Reference was made to Sections 21 and 30 of the Act and it

was held that though there was an over-riding effect yet the

beneficial provision of the statute was not extinguished. It was

further observed that once Notification is issued under Section

10 of the Act the matter would be different and the decision

rendered by this Court in Steel Authority's case (supra) would

be applicable in full force. In the absence of Notification the

other general relevant law would be applicable. With reference

to various provisions of 1960 Act it was held that there can be

reconciliation of both the decisions rendered by Division

Benches of the High Court. When there is a dispute with

regard to wage structure qua class of employees they have to

move the Labour Court as per the provisions of Sections 51

7
and 52 of the 1960 Act and if it is an individual, he can move

the High Court under Schedule II. Accordingly, it was held

that the view of learned Single Judge was not correct.

10. In support of the appeals, learned counsel for the

appellants submitted that the ratio in Steel Authority's case

(supra) has not been appreciated. It was further pointed out

that the direction was for absorption and further that the

contract labours should be abolished. It was pointed out that

the effect of registration under Section 7 and the licence

issued has not been considered. Similarly, the effect of Rule

25 has been lost sight of. It is pointed out that the effect of

Article 254 has also not been considered. According to

learned Solicitor General repugnancy is irrelevant for Sub-

Article (2) of Article 254. It is pointed out that the Act refers to

regulation and abolition. Section 10 begins with non-obstante

clause. Section 7 relates to registration. The employment of

contract labour is not prohibited. Only prohibition can be

imposed by issuing a Notification.




8
11. It is pointed out that in Article 254 the question of

Presidential assent is also there. It is, therefore, submitted

that the judgment of the Division Bench is unsustainable.



12. In response, learned counsel for the respondents

submitted that the High Court's view is in line with the

beneficial legislation which intends to protect the contract

labour from exploitation.



13. In Steel Authority's case (supra) it was inter-alia

observed as follows:

"10. The CLRA Act was enacted by Parliament
to deal with the abuses of the contract labour
system. It appears that Parliament adopted
twin measures to curb the abuses of
employment of contract labour - the first is to
regulate employment of contract labour
suitably and the second is to abolish it in
certain circumstances. This approach is
clearly discernible from the provisions of the
CLRA Act which came into force on 10-2-1971.
A perusal of the Statement of Objects and
Reasons* shows that in respect of such
categories as may be notified by the
appropriate Government, in the light of the
prescribed criteria, the contract labour will be
abolished and in respect of the other


9
categories the service conditions of the
contract labour will be regulated. Before
concentrating on the relevant provisions of the
CLRA Act, it may be useful to have a bird's-eye
view of that Act. It contains seven Chapters.
Chapter I has two sections; the first relates to
the commencement and application of the Act
and the second defines the terms used therein.
Chapter II which has three sections provides
for the constitution of a Central Advisory
Board by the Central Government and a State
Advisory Board by the State Government and
empowers the Boards to constitute various
committees. Chapter III contains regulatory
provisions for registration of establishments
which employ contract labour. Section 10
which prohibits the employment of contract
labour falls in this Chapter; we shall revert to
it presently. Chapter IV contains provisions for
purposes of licensing of contractors to make
sure that those who undertake or execute any
work through contract labour, adhere to the
terms and conditions of licences issued in that
behalf. Power is reserved for revocation,
suspension and amendment of licences by the
Licensing Officer and a provision is also made
for appeal against the order of the Licensing
Officer. Chapter V takes care of the welfare
and health of contract labour obliging the
appropriate Government to make rules to
ensure that the requirements of canteen,
restrooms and other facilities like sufficient
supply of wholesome drinking water at
convenient places, sufficient number of
latrines and urinals accessible to the contract
labour in the establishment, washing facilities
and first-aid facilities, are complied with by
the contractor. Where the contractor fails to
provide these facilities the principal employer

10
is enjoined to provide canteen, restrooms etc.,
mentioned above, for the benefit of the
contract labour. Though the contractor is
made responsible for payment of wages to
each worker employed by him as contract
labour before the prescribed period yet for
effective implementation of this requirement,
care is taken to ensure presence of a nominee
of the principal employer at the time of the
disbursement of wages. Here again, it is
prescribed that if the contractor fails to pay
the wages to the contract labour, the principal
employer shall pay the full wages or unpaid
wages, as the case may be, to the contract
labour and a right is conferred on him to
recover the same from the amount payable to
the contractor; if however, no amount is
payable to him then such amount is treated as
a debt due by the contractor to the principal
employer. Chapter VI deals with the
contravention of the provisions of the Act,
prescribes offences and lays down the
procedure for prosecution of the offenders.
Chapter VII is titled "Miscellaneous" and it
contains eight sections which need not be
elaborated here."



14. In Gujarat Electricity Board, Thermal Power Station,

UKAL Gujarat v. Hind Mazdoor Sabha and Ors. (1995 (5) SCC

27) it was inter alia observed by this Court as follows:


"53. Our conclusions and answers to the
questions raised are, therefore, as follows:



11
(i) In view of the provisions of Section 10 of the
Act, it is only the appropriate Government
which has the authority to abolish genuine
labour contract in accordance with the
provisions of the said section. No court
including the industrial adjudicator has
jurisdiction to do so.


(ii) If the contract is a sham or not genuine, the
workmen of the so-called contractor can raise
an industrial dispute for declaring that they
were always the employees of the principal
employer and for claiming the appropriate
service conditions. When such dispute is
raised, it is not a dispute for abolition of the
labour contract and hence the provisions of
Section 10 of the Act will not bar either the
raising or the adjudication of the dispute.
When such dispute is raised, the industrial
adjudicator has to decide whether the contract
is a sham or genuine. It is only if the
adjudicator comes to the conclusion that the
contract is a sham, that he will have
jurisdiction to adjudicate the dispute. If,
however, he comes to the conclusion that the
contract is genuine, he may refer the workmen
to the appropriate Government for abolition of
the contract labour under Section 10 of the
Act and keep the dispute pending. However,
he can do so if the dispute is espoused by the
direct workmen of the principal employer. If
the workmen of the principal employer have
not espoused the dispute, the adjudicator,
after coming to the conclusion that the
contract is genuine, has to reject the reference,
the dispute being not an industrial dispute
within the meaning of Section 2(k) of the ID
Act. He will not be competent to give any relief


12
to the workmen of the erstwhile contractor
even if the labour contract is abolished by the
appropriate Government under Section 10 of
the Act.


(iii) If the labour contract is genuine a
composite industrial dispute can still be raised
for abolition of the contract labour and their
absorption. However, the dispute will have to
be raised invariably by the direct employees of
the principal employer. The industrial
adjudicator, after receipt of the reference of
such dispute will have first to direct the
workmen to approach the appropriate
Government for abolition of the contract
labour under Section 10 of the Act and keep
the reference pending. If pursuant to such
reference, the contract labour is abolished by
the appropriate Government, the industrial
adjudicator will have to give opportunity to the
parties to place the necessary material before
him to decide whether the workmen of the
erstwhile contractor should be directed to be
absorbed by the principal employer, how many
of them and on what terms. If, however, the
contract labour is not abolished, the industrial
adjudicator has to reject the reference.


(iv) Even after the contract labour system is
abolished, the direct employees of the
principal employer can raise an industrial
dispute for absorption of the ex-contractor's
workmen and the adjudicator on the material
placed before him can decide as to who and
how many of the workmen should be absorbed
and on what terms."



13
15. Similarly, the view of this Court in Municipal Corporation

of Greater Mumbai v. K.V. Shramik Sangh and Ors. (2002 (4)

SCC 609) is relevant. The position in law which has

considerable effect on the present dispute was noted as

follows:

"16. In a recent Constitution Bench judgment
of this Court in Steel Authority of India Ltd. v.
National Union Waterfront Workers, Air India
case1 is specifically overruled. In the said
judgment, after referring the various decisions
of this Court including the decisions cited
before us and on elaborate consideration and
analysis, the Constitution Bench in para 125
of the said judgment, outlined the conclusions.
To the extent they are relevant for the present
purpose read: (SCC pp. 61-63)


"125. The upshot of the above discussion is
outlined thus:
(1)(a)-(2)(b) * * *
(3) Neither Section 10 of the CLRA Act nor
any other provision in the Act, whether
expressly or by necessary implication, provides
for automatic absorption of contract labour on
issuing a notification by the appropriate
Government under sub-section (1) of Section
10, prohibiting employment of contract labour,
in any process, operation or other work in any
establishment. Consequently the principal
employer cannot be required to order

14
absorption of the contract labour working in
the establishment concerned.
(4) We overrule the judgment of this Court
in Air India case prospectively and declare that
any direction issued by any industrial
adjudicator/any court including the High
Court, for absorption of contract labour
following the judgment in Air India case shall
hold good and that the same shall not be set
aside, altered or modified on the basis of this
judgment in cases where such a direction has
been given effect to and it has become final.


(5) On issuance of prohibition notification
under Section 10(1) of the CLRA Act
prohibiting employment of contract labour or
otherwise, in an industrial dispute brought
before it by any contract labour in regard to
conditions of service, the industrial
adjudicator will have to consider the question
whether the contractor has been interposed
either on the ground of having undertaken to
produce any given result for the establishment
or for supply of contract labour for work of the
establishment under a genuine contract or is a
mere ruse/camouflage to evade compliance
with various beneficial legislations so as to
deprive the workers of the benefit thereunder.
If the contract is found to be not genuine but a
mere camouflage, the so-called contract labour
will have to be treated as employees of the
principal employer who shall be directed to
regularize the services of the contract labour
in the establishment concerned subject to the
conditions as may be specified by it for that
purpose in the light of para 6 hereunder.




15
(6) If the contract is found to be genuine
and prohibition notification under Section 10
(1) of the CLRA Act in respect of the
establishment concerned has been issued by
the appropriate Government, prohibiting
employment of contract labour in any process,
operation or other work of any establishment
and where in such process, operation or other
work of the establishment the principal
employer intends to employ regular workmen,
he shall give preference to the erstwhile
contract labour, if otherwise found suitable
and, if necessary, by relaxing the condition as
to maximum age appropriately, taking into
consideration the age of the workers at the
time of their initial employment by the
contractor and also relaxing the condition as
to academic qualifications other than technical
qualifications."


Para 126 of the same judgment reads: (SCC
p.63)


"126. We have used the
expression `industrial adjudication'
by design as determination of the
questions aforementioned requires
enquiry into disputes questions of
facts which cannot conveniently be
made by High Courts in exercise of
jurisdiction under Article 226 of the
Constitution. Therefore, in such
cases the appropriate authority to go
into those issues will be the
Industrial Tribunal/Court whose
determination will be amenable to
judicial review."

16
19. Now, we proceed to consider the validity
and correctness of the impugned judgment
and order in the light of judgment of the
Constitution Bench in SAIL case. The High
Court held that the work entrusted to the
members of the Union continued to be
basically the work of the Corporation itself of
perennial nature; the Corporation has chosen
to carry out the work under the so-called
system of labour contract without complying
with the provisions of the CLRA Act and as
such the labour contract was a camouflage.
We must state here itself that the Union in the
writ petition alleged that the labour contract
was a sham and the Corporation specifically
denied it in its counter-affidavit but the High
Court did not go into this question and did not
record a finding that the labour contract in the
present case was a sham or a camouflage
considering the material on record; even
otherwise, this being a serious and disputed
fact in terms of the Constitution Bench
judgment aforementioned, the High Court
could not have appropriately adjudicated on
the issue exercising jurisdiction under Article
226 of the Constitution. It appears to us that
the High Court proceeded to conclude that the
labour contract was not genuine and the
workers of the Union were employees of the
Corporation because the Corporation and the
contractors did not comply with the provisions
of the CLRA Act. Conclusion that the contract
was a sham or it was only a camouflage
cannot be arrived at as a matter of law for
non-compliance with the provisions of the
CLRA Act but a finding must be recorded


17
based on evidence, particularly when disputed
by an industrial adjudicator as laid down in
various decisions of this Court including the
Constitution Bench judgment in SAIL. The
cases on which the High Court placed reliance
were the cases where finding of fact was
recorded by the Labour Courts on evidence. In
para 34 of the impugned judgment, it is
stated:



"This Court is hardly competent to
record evidence or appreciate it in
exercise of its powers under Article
226 of the Constitution. This Court as
well as the Supreme Court have
always taken the view that writ
jurisdiction should not be permitted to
be invoked if disputed questions of
facts are involved, is the submission of
the learned counsel. The submissions
are wholly unexceptionable. If the facts
were not clear, we would have hardly
allowed our writ jurisdiction to be
invoked. The material which we have
referred to at several places
hereinbefore, is more than adequate,
in our view, to come to the conclusion
we have arrived at."

20. The material referred to relates to the
complaints of the Union, recommendations of
the Labour Commissioner, Labour Minister
and the Labour Contract Advisory Board in
regard to abolition of contract labour under
Section 10 of the CLRA Act, but that material
could not be a foundation or basis to say that
the labour contract was a sham, a camouflage

18
or a devise* to deny the statutory benefits to
the workers. From the judgment under
challenge, it is clear that Air India case
weighed with the High Court, which judgment
now stands overruled as already stated above.
The High Court rejected the contention that
jurisdiction to abolish the contract labour
system vested with the appropriate
government under Section 10 of the CLRA Act
and that power could be exercised after
obtaining advice of the Contract Labour
Advisory Board which in turn had to keep in
mind several factors enumerated in clauses (a)
to (d) of Section 10(2) of the CLRA Act stating
that in the present case in almost 15 years,
there was no registration of the principal
employer; none of the contractors ever held a
licence under the Act; the work that was being
carried on fell within the parameters of clauses
(a) to (d) of Section 10(2) of the Act and having
regard to what was said by the Chairman,
Standing Committee of the Corporation and
the contractors and the recommendation of
the Labour Commissioner to abolish the
contract labour system. Further, the Minister
for Labour of the Government of Maharashtra
went on to record in clear terms that the
Government had taken a decision to abolish
the system of contract labour in the Solid
Waste Management Department of the
Corporation, the High Court thought that
there was sufficient material for abolishing the
contract labour system. The High Court drew
an inference that the State admitted that all
the requirements were satisfied for acting
under Section 10(2) but because of the
election code of conduct it was unable to act
and passed order for absorption of workers


19
saying that it had no impediment to do so in
view of its conclusions. Referring to Air India
case the High Court observed that the said
judgment suggested that a contract labour
system can be said to be genuine only if it is
carried in compliance with the provisions of
the CLRA Act and anything contrary thereto
would lead to the presumption that the
purported contract labour system was merely
a device and a sham. In our view, the
conclusion of the High Court that the contract
labour system in the present case was a sham,
cannot be sustained in the light of what is
stated above and particularly when the
disputed questions of fact arose for
consideration in the light of rival contention
raised by the parties. We have detailed them
above to say so.


28. As laid down in the Constitution Bench
judgment, absorption of contract labourers
cannot be automatic and it is not for the court
to give such direction. Appropriate course to
be adopted is as indicated in para 125 of the
said judgment in this regard. Thus having
considered all aspects, we are of the view that
the impugned judgment and order cannot be
upheld."



16. Article 254 of the Constitution is also relevant. It reads

as follows:


"254. Inconsistency between laws made by
Parliament and laws made by the Legislatures of


20
States.-(1) If any provision of a law made by the
Legislature of a State is repugnant to any provision
of a law made by Parliament which Parliament is
competent to enact, or to any provision of an
existing law with respect to one of the matters
enumerated in the Concurrent List, then, subject to
the provisions of clause (2), the law made by
Parliament, whether passed before or after the law
made by the Legislature of such State, or, as the
case may be, the existing law, shall prevail and the
law made by the Legislature of the State shall, to
the extent of the repugnancy, be void.

(2) Where a law made by the Legislature of a State
with respect to one of the matters enumerated in
the Concurrent List contains any provision
repugnant to the provisions of an earlier law made
by Parliament or an existing law with respect to that
matter, then, the law so made by the Legislature of
Such State shall, if it has been reserved for the
consideration of the President and has received his
assent, prevail in that State:

Provided that nothing in this clause shall prevent
Parliament from enacting at any time any law with
respect to the same matter including a law adding
to, amending, varying or repealing the law so made
by the Legislature of the State."



17. In Sub-Article (1) of Article 254 it has been clearly

indicated that the competing legislations must be in respect of

one of the matters enumerated in the concurrent list. It lays

down the general rule and clause (2) is an exception thereto.


21
The proviso qualifies the exception. In Deep Chand v. State of

Uttar Pradesh and Ors. (AIR 1959 SC 648) the following

principles were laid down to ascertain whether there is

repugnancy or not. The test was (1) whether there is direct

conflict between two provisions; (ii) whether the legislature

intended to lay down an existing code in respect of the subject

matter replacing the earlier law; and (iii) whether two laws

occupy the same field. In Zaverbhai Amaidas v. State of

Bombay (AIR 1954 SC 752) it was pointed out that the

important thing to consider with reference to this provision is

whether the legislation is "in respect of the same matter". If

the latter legislation deals not only with the matters which

formed the subject of the earlier legislation but with other

distinct matters though of a cognate and allied character, then

Article 254(2) will have no application.



18. A Constitution Bench in M. Karunanidhi v. Union of

India (AIR 1979 SC 898 at para 8) observed as follows:


"It would be seen that so far as clause (1) of
Article 254 is concerned it clearly lays down that

22
where there is a direct collision between a provision
of law made by State and that made by the
Parliament with respect to one of the matters
enumerated in the Concurrent List, then subject to
the provisions of Clause (2) the State law would be
void to the extent of repugnancy. This naturally
means that where both the State and the
Parliament occupy the field contemplated by
Concurrent List then the Act passed by Parliament
being prior in point of time will prevail and
consequently the State Act will have to yield to the
Central Act. In fact, the Scheme of the Constitution
is a scientific and equitable distribution of
legislative powers between Parliament and the State
Legislatures. First, regarding the matters contained
in List I, i.e. the Union List to be Seventh Schedule,
Parliament alone is empowered to legislate and the
State Legislatures have no authority to make any
law in respect of the Entries contained in List I.
Secondly, so far as Concurrent List is concerned,
both Parliament and the State Legislatures are
entitled to legislate in regard to any of the entries
appearing therein, but this is subject to the
condition laid down by Article 254(1) discussed
above. Thirdly, so far as the matters in List II, i.e.,
the State List are concerned, the State Legislature
alone is competent to legislate on them and only
under certain conditions Parliament can do so. It
is, therefore, obvious that in such matters
repugnancy may result from the following
circumstances:

1. Where the provisions of a Central Act
and a State Act in the Concurrent List are
fully inconsistent and are absolutely
irreconcilable, the Central Act will prevail and
the State Act will become void in view of the
repugnancy.


23
2. Where, however, the law passed by the
State comes into collision with a law passed
by the Parliament on an entry in the
Concurrent List, the State Act shall prevail to
the extent of the repugnancy and the
provisions of the Central Act would become
void provided the State Act has been passed
in accordance with Clause (2) of Article 254.

3. Where a law passed by the State
Legislature while being substantially within
the scope of the entries in the State List
entrenches upon any of the Entries in the
Central List the constitutionality of the law
may be upheld by invoking the doctrine of
pith and substance if on an analysis of the
provisions of the Act it appears that by the
large the law falls within the four corners of
the State List, and entrenchment if any is
purely incidental or inconsequential.

4. Where, however, a law made by the
State Legislature on the subject covered by
the Concurrent List is inconsistent with and
repugnant to a previous law made by
Parliament, then such a law can be protected
by obtaining the assent of the President
under Article 254(2) of the Constitution. The
result of obtaining the assent of the President
would be that so far as the State Act is
concerned, it will prevail in the State and
overrule the provisions of the Central Act in
its applicability to the State only. Such a
state of affairs exist only until Parliament
may at any time make a law adding to, or
amending, varying or repealing the law made
by the State Legislature under the proviso to
Article 254."


24
19. Clause (1) of Article 254 speaks about over-riding effect

of a law made by Parliament which the Parliament is

competent to enact. Same is the position in respect of a

provision of existing law with respect of one of the matters

enumerated in concurrent list which is subject to operation of

Clause (2). So far as Clause (2) is concerned when a law is

made by the legislature of the State with respect to one of the

matters enumerated in the concurrent list and it contains any

provision repugnant to earlier law made by Parliament or

in the existing law with respect of that matter then the law so

made by legislature of the State shall if it has been reserved

for the consideration of the President and has received the

assent prevail in that State. In that case, the assent of the

President becomes the determinative factor. The proviso to

Clause (2) curtails the ambit of Clause (2) by providing that

Parliament can enact a law with respect to the same matter in

which the State Legislature has made the law and by such law

the Parliament can add to, amend, vary or repeal the law

made by the legislature of the State. In other words, in terms

25
of the proviso in Article 254 the legislative power of the

Parliament has been enlarged in the sense that it can add to,

amend, vary or repeal the law made by the legislature of the

State.



20. Sections 7, 10 and 12 of the Act have also relevance. The

read as follows:


"7.Registration of certain establishments.-
(1) Every principal employer of an
establishment to which this Act applies shall,
within such period as the appropriate
Government may, by notification in the Official
Gazette, fix in this behalf with respect to
establishments generally or with respect to any
class of them, make an application to the
registering officer in the prescribed manner for
registration of the establishment:

Provided that the registering officer may
entertain any such application for registration
after expiry of the period fixed in this behalf, if
the registering officer is satisfied that the
applicant was prevented by sufficient cause
from making the application in time.

(2) If the application for registration is
complete in all respects, the registering officer
shall register the establishment and issue to
the principal employer of the establishment a
certificate of registration containing such
particulars as may be prescribed.

26
10. Prohibition of employment of contract
labour-(1) Notwithstanding anything contained
in this Act, the appropriate Government may,
after Consultation with the Central Board or,
as the case may be, a State Board, prohibit, by
notification in the Official Gazette, employment
of contract labour in any process, operation or
other work in any establishment.

(2) Before issuing any notification under sub-
section (1) in relation to an establishment, the
appropriate Government shall have regard to
the conditions of work and benefits provided
for the contract labour in that establishment
and other relevant factors, such as-

(a) whether the process, operation or other
work is incidental to, or necessary for the
industry, trade, business, manufacture or
occupation that is carried on in the
establishment ;

(b) whether it is of perennial nature, that is to
say, it is of sufficient duration having regard to
the nature of industry, trade, business,
manufacture or occupation carried on in that
establishment ;

(c) whether it is done ordinarily through
regular workmen in that establishment or an
establishment similar thereto ;

(d) whether it is sufficient to employ
considerable number of whole-time workmen.

Explanation.-If a question arises whether any
process or operation or other work is of


27
perennial nature, the decision of the
appropriate Government thereon shall be final.


12. Licensing of contractors.--(1) With
effect from such date as the appropriate
Government may, by notification in the Official
Gazette, appoint no contractor to whom this
Act applies, shall undertake or execute any
work through contract labour except under
and in accordance with a licence issued in that
behalf by the licensing officer.

(2) Subject to the provisions of this Act, a
licence under sub-section (1) may contain
such conditions including, in particular,
conditions as to hours of work, fixation of
wages and other essential amenities in respect
of contract labour as the appropriate
Government may deem fit to impose in
accordance with the rules, if any, made under
Section 35 and shall be issued on payment of
such fees and on the deposit of such sum, if
any, as security for the due performance of the
conditions as may be prescribed."

.



21. In view of what has been stated above, the Division

Bench was not justified in its conclusions and on the contrary,

learned Single Judge had correctly analysed the position in

law. That being so, Civil Appeals are allowed. There will be no

order as to costs.




28
22. In view of the order passed in Civil Appeals no order is

necessary to be passed in Writ Petition 529 of 2005.



...................................J.
(Dr. ARIJIT PASAYAT)


...................................J.
(P. SATHASIVAM)
New Delhi,
August 11, 2008




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