Iisco Steel Plant vs The State Of West Bengal & Ors on 9 July, 2026

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    Calcutta High Court (Appellete Side)

    Iisco Steel Plant vs The State Of West Bengal & Ors on 9 July, 2026

                                                                               2025:CHC-AS:904
    
    
                          IN THE HIGH COURT AT CALCUTTA
                           Constitutional Writ Jurisdiction
                                  APPELLATE SIDE
    
    Present:
    
    The Hon'ble Justice Shampa Dutt (Paul)
    
    
    
                                 WPA 6006 of 2009
    
                          Steel Authority of India Limited
                                 IISCO Steel Plant
                                         Vs
                          The State of West Bengal & Ors.
    
    
    For the Petitioner                   :     Mr. Soumya Majumder, ld. Sr.Adv.
                                               Mr. Bandhu Brata Bhula.
    
    
    For the Respondent no. 3             :     Mr. Bikash Ranjan Neogi,
                                               Ms. Ananya Neogi,
                                               Ms. Anushka Ghosh.
    
    For the State                        :     Ms. Soma Chakraborty,
                                               Mr. Kaustav Seal.
    
    Judgment reserved on                 :     24.06.2026
    
    Judgment delivered on                :     09.07.2026
    
    Shampa Dutt (Paul), J.:
    

    1. The writ application has been preferred challenging the order of

    reference dated 23.04.2004 and the award dated 22.12.2008, passed by

    SPONSORED

    the 9th Industrial Tribunal, Durgapur.

    2. The case of the petitioner herein is that the petitioner is engaged in the

    business of manufacturing Steel at its Burnpur Works and is a public

    sector undertaking under the Ministry of Steel.
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    2025:CHC-AS:904

    3. The respondent no. 3 is the workman at whose instance the purported

    order of reference over the issue of regularization of service of 24

    workmen in the company at its Burnpur Works had been referred to the

    learned Tribunal for adjudication.

    4. That in the Slag Granulation Plant of the Burnpur Works, the persons

    named in the order of reference had claimed to have been appointed

    between 30.01.1980 and 27.07.1988 on various dates and the Union

    has claimed that those workers had performed their duties as operators

    and khalasis under the direct control of the management.

    5. It is the case of the Union that the persons named in the order of

    reference, out of which 17 are concerned in the present dispute had

    joined the company, namely, Damodar Cement and Slag Limited, which

    was a contractor vis-à-vis the business of the petitioner company at its

    Burnpur Works in the department.

    6. It is the case of the Union that on 09.02.1980 a Notification was issued

    under Section 10 of the Contract Labour (Regulation and Abolition) Act,

    1970 prohibiting the nature of job in which concerned 17 persons

    named in the order of reference were working.

    7. In 1984, an agreement with the contractors was terminated and another

    contractor namely Ashok Traders was inducted for certain work in the

    company in the Slag Granulation Plant. The said Ashok Traders

    (Contractor) ceased to operate as a contractor in March, 1997 and

    thereafter for sometime, by way of humanitarian act, and under

    pressure and threat of the Union which was apprehensive that the plant
    3

    2025:CHC-AS:904
    might be shut down, those 17 persons were paid directly by the

    management of the petitioner-company

    8. In 1999 another contractor namely P.K.Thakur was (nominated for

    executing work on contract and all 17 concerned contractors labours

    joined the services under the said contractor. Subsequently another

    contractor, namely Aich & Aich Company has been inducted as a

    contractor and the concerned persons continued to work under the

    subsequent contractor also, obviously on request of the outgoing

    contractor and under threat and pressure of the Union.

    9. It is stated that at no material point of time, the management of the

    petitioner company had any supervision, administration and control

    over the nature and manner in which the work was to be executed by

    the contract labourers.

    10. The establishment of the petitioner company is exempted under the

    provisions of Section 17 of the Employees Provident Funds and

    Miscellaneous Provisions Act, 1952, and the company by treating one of

    the 17 persons concerned in the dispute, namely, Atiar Rahaman

    Munshi, as an ’employee’ within the meaning of the EPF & MP Act, 1952

    had forwarded the application for non-refundable advance from PF

    Trust under House Building Scheme to the Trustee Board. It is stated

    that the P.F. Trustee Board of the company is a separate juristic entity

    and different from your petitioner company.

    11. That all the 17 concerned persons have subsequently filled up their

    statutory forms under the Employees’ Provident Funds and
    4

    2025:CHC-AS:904
    Miscellaneous Provisions Act, 1952 giving out their statutory declaration

    forms by admitting their status as employees of the contractors.

    12. On the basis of these available facts the respondent no.3 purported to

    raise an industrial dispute straightway with the Conciliation Officer

    under the I.D. Act without raising any dispute with the employer.

    13. The purported industrial dispute was referred to the learned Tribunal by

    the Government of West Bengal vide an Order of Reference dated

    23.04.2004.

    14. The issues in the order of reference are as follows:-

    “1. Whether the claim of the union for regularisation of services
    of 24 (twenty four) workmen (vide Annexure-i) in the company
    IISCO Ltd., Burnpur Works, is justified?

    2. What relief, if any, are they entitled to ?”

    15. The tribunal on adjudication held as follows:-

    “that the case under reference is allowed on contest.
    Accordingly, an Award is passed directing the company to
    regularize the services of the concerned workmen in the
    company under order of reference Annexure I excepting the
    names appearing in Sl. No. 4, 7, 9, 12, 13, 14, 15, 16 and 23
    with wages and other benefits with effect from the date when
    the reference has been made before this Tribunal.”

    16. Hence, the writ application challenging the said order.

    17. Mr. Soumya Majumder, learned senior counsel, appearing for the

    petitioner on filing written notes has argued that the order of reference

    has pre-supposed the twenty four persons named in the order to be the

    workmen of the company. Although the materials before the conciliation

    machinery disclosed them to be contract labourers. The reference
    5

    2025:CHC-AS:904
    therefore suffers from lack of material to form an opinion so as to make

    the reference.

    18. Mr. Majumder has further argued that the award proceeds on the

    assertion of the workmen that they were under the direct administrative

    control of the company, and having been appointed between 30th

    January, 1980 to 27th July, 1988, they had been working continuously.

    19. It is the contention of the petitioner that the Tribunal has passed an

    erroneous award on the ground that provident fund liability is an

    indirect/vicarious liability of a principal employer. Therefore, reference

    to provident fund documents does not establish a direct relationship

    between contract labourers and the principal employer.

    20. Even a short time direct payment by the principal employer to the

    contract labourers in the absence of contractor will not establish a direct

    master servant relationship between the principal employer and the

    contract labourer.

    21. The petitioner relies upon the judgment of the Supreme Court in Nihal

    Singh & Ors. Vs. State of Punjab & Ors. reported in (2013) 14 SCC 65

    and WPA 23964 of 2014 along with MAT 2266 of 2023 wherien the

    Court held as follows:-

    “17. From the mere fact that the payment of wages came from
    the bank at whose disposal the services of each of the
    appellants was kept did not render the appellants employees of
    those banks. The appointment is made by the State. The
    disciplinary control vests with the State. The two factors which
    conclusively establish that the relationship of master and
    servant exists between the State and the appellants. A fact
    which is clearly recognized by the Division Bench of the High
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    2025:CHC-AS:904
    Court in LPA NO. 209 of 1992. It may be worthwhile mentioning
    here that under the law of contracts in this country the
    consideration for a contract need not always necessarily flow
    from the parties to a contract. The decision of the SSP to reject
    the claim of the appellants only on the basis that the payment of
    wages to the appellants herein was being made by the banks
    concerned rendering them disentitled to seek regularisation of
    their services from the State is clearly untenable.”

    22. It is the further case of the petitioner that in any event failure of the

    contractor to pay wages to the contract labourers triggers of the

    statutory responsibility of the principal employer to pay wages in terms

    of Section 21 of the Contract Labour (Regulation and Abolition) Act,

    1970. Compliance with such statutory provision does not establish a

    direct relationship.

    23. It is further argued by Mr. Majumder that the direction of the Hon’ble

    Apex Court in Steel Authority of India Ltd. vs. Workmen of Steel

    Authority of India Ltd. & Anr. in Civil Appeal Nos. 902-903 of 2023

    dated 07.02.2023 was delivered in exercise of power under Article 142 of

    the Constitution of India while dealing with a different case of 159

    contract labourers, who had laid different standard of evidence. The said

    facts do not match with the case in hand. It is further stated that the

    Hon’ble Supreme Court in the case of SAIL reported at (2001) 7 SCC 1

    (para 125) held that on an establishment of direct relationship, the

    contract labourers engaged in prohibited jobs notified under Section 10

    of Contract Labour (Regulation and Abolition) Act, 1970 will only have a

    preferential right of employment vis-à-vis outsiders who participate in

    the recruitment process for the post. As such, the petitioner prays that
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    2025:CHC-AS:904
    the impugned award suffers from inherent illegality and is liable to be

    dismissed.

    24. The petitioner has also relied upon the judgment in Gujarat Electricity

    Board Thermal Power Station, Ukai, Gujarat vs. Hind Mazdoor Sabha

    & Ors. (1995) 5 SCC 27 (Para 57).

    25. Mr. Neogi, learned counsel for the respondent no. 3 on filing written

    notes of argument has argued that in a similar matter the ld. 9th

    Industrial Tribunal at Durgapur in the year 2005 passed similar and

    identical order, challenging which the petitioner herein filed a writ

    petition. After dismissal of the writ petition, the petitioner filed an appeal

    before the Hon’ble Division Bench of this Court and being aggrieved by

    the order of the Hon’ble Division Bench, the petitioner herein filed a

    special leave petition before the Hon’ble Supreme Court.

    26. The Hon’ble Supreme Court after considering all aspects held as

    follows:-

    “12. The issue whether the workmen were employed by IISCO or
    they were contractual employees is essentially a question of fact
    which has been examined in depth by the Tribunal, learned
    Single Judge as well as the Division Bench of the High Court,
    holding concurrently that the workmen were actually the
    employees of the appellant-Authority. Such a finding of fact does
    not warrant for any interference by this Court.
    Having held so, we clarify that it is not necessary to regularize the

    services of the workman who have died, retired or still in employment and

    even in the absence of such a status they shall be entitled to the following

    service benefits:

    8

    2025:CHC-AS:904

    (i) Pay-scale at par with the employees who are on the roll of the
    appellant- Authority;

              (ii)    The benefit of provident fund;
    
              (iii)   The benefit under the Gratuity Act;
    
             (iv)      The other service benefits including the medical allowance
    

    which the appellant Authority has granted to its employees under
    the Service Regulations or through administrative decisions from
    time to time. Such benefits will be admissible from the cut-off date
    determined by the Tribunal.”

    27. The specific case of the respondent no. 3 herein is that there being no

    difference in status with the respondent workmen herein and the

    workmen of the SLP, being similarly situated and similarly

    circumstanced this Hon’ble Court has ample jurisdiction to decide the

    relief which the respondent workmen are entitled in view of the specific

    finding of the Hon’ble Supreme Court.

    28. Mr. Neogi further argues that the award as challenged by the

    respondent in this writ petition and the award which was challenged

    before the learned Single Judge, Hon’ble Division Bench and then the

    Hon’ble Supreme Court, are same and identical and it is thus submitted

    that those findings which reached its finality, cannot be reopened and

    this Court has ample power to decide what relief the respondent

    workmen are entitled to in view of the specific finding of the Hon’ble

    Supreme Court, as the respondent workmen herein are employees of the

    petitioners herein, as held by Hon’ble Supreme Court in paragraph 12

    of the earlier SLP being Civil Appeal Nos. 902-903 of 2023 (arising

    out of SLP (C) Nos. 26634-26635 of 2019 and as such the respondent
    9

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    workmen are entitled to relief as per the award passed by the learned

    Industrial Tribunal.

    29. The respondent no. 3 herein has relied upon a judgment of a Coordinate

    Bench of this Court, passed in WP 20732 (W) of 2009 dated 17th

    January, 2017, wherein the Court held as follows:-

    “21. I do not find the decision of the Tribunal to be perverse. On
    behalf of the workmen, 58 exhibits were relied upon and oral
    evidence was also adduced both by the workmen and the
    management. These exhibits demonstrate direct supervision of
    officers of the petitioners over these workmen. Mr. Gupta has
    argued that certain officers of SAIL who described the workmen as
    employees had no authority to do so. But this is not a case where
    status is sought to be established by documents. The Tribunal had
    to see what was the actual nature of relationship between the
    parties. Thus it is immaterial as to whether a particular officer was
    authorized to describe a particular workman as direct employee of
    the organization or not. What is material is that they were
    treated as direct employees of the Company. In some cases,
    they were required to work in night shifts, which ordinarily a
    permanent workman has to work in. For certain period, the
    workmen had come out of the fold of the contractor. In this factual
    perspective, the description of the workmen represented by the first
    respondent as contract-worker is was a sham exercise, a
    camouflage to conceal their real status.

    22. Though reference was framed as if it was a case of
    regularization, this was not a case where dispute was on
    regularization simpliciter. This was a case where the Tribunal
    examined as to whether the employment by the contractor
    was a sham or camouflage arrangement. In my opinion the
    Tribunal had correctly arrived at its finding. I accordingly dismiss
    10

    2025:CHC-AS:904
    the writ petition. The award of the Tribunal is sustained. Interim
    order passed in this matter, if any, shall stand dissolved.”

    30. By a judgment dated 18th April, 2019 the Hon’ble Division Bench of

    this Court in FMA 1369 of 2017 held as follows:-

    “34. The learned Judge, in our opinion, correctly appreciated,
    relying upon General Manager, Oil and Natural Gas
    Commission (supra), that the present case was not one of
    regularisation simpliciter such as in the case of an ad hoc or
    casual employee claiming this privilege. The basic issue in
    the case before His Lordship was the status of the 159
    workmen and whether they were the employees of SAIL
    or the contractors, and in the event they were SAIL’s
    employees, the claim that required the industrial
    adjudicator’s attention was whether they were to be
    treated on a par with other regular employees. Steel
    Authority of India Limited
    (supra) lays down the law that 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. The present case stands on a better
    footing, in that no contract is shown to exist and, therefore,
    question of a contractor interposing between SAIL and the 159
    workmen does not and cannot arise.

    35. We record our respectful concurrence with the views
    expressed by the learned Judge on each of the points that were
    raised before His Lordship by SAIL, and hold on the facts and
    circumstances of this particular case that the materials before
    us are insufficient to even persuade us to hold that the learned
    Judge was not right in not interfering with the challenge to the
    impugned award. The 159 workmen had/have been employed
    almost uninterruptedly for more than two decades and most of
    them having crossed the age of retirement and only a handful
    11

    2025:CHC-AS:904
    being in service, we consider that the time is now ripe to allow
    the matter to rest.”

    31. Finally, the respondent no. 3 has relied upon the judgment of Steel

    Authority of India Ltd. (supra) dated 7th February, 2023 and has

    categorically submitted that the Hon’ble Apex Court has already decided

    the issue similar to the one involved in the present writ application and

    as the respondents-workmen are similarly placed, they are entitled to

    get relief as prayed for.

    32. It is the further contention of the learned counsel for the respondent no.

    3 that though the said judgment was directed to be not treated as a

    precedent in similar matters, the substance and observation of the

    Court can be considered as a guidance by this Court.

    33. Mr. Majumder, counters the said argument by stating that the award

    which was before the Hon’ble Apex Court in the said proceedings

    referred to by the parties, was on a different issue and the facts and

    circumstances in both the cases are not similar and, as such, the

    workman in the present case cannot be treated at par with the workman

    in which they have been granted relief by the Supreme Court.

    34. In the present case, as whether there existed any relationship of

    employer and employees between the parties herein, the following

    observation/findings of the tribunal are relevant:-

    “i. According to G.M. IISCO (O.P.W.1),

    “As the Contractors were not engaged during that

    period we engaged Contractor’s workers and paid their

    salary to maintain their livelihood. When award of
    12

    2025:CHC-AS:904
    contract was not finalized, the present applicants were

    engaged by us under direct supervision during that

    period. The period was from 1st April 1997 to 19th

    August 1999. It is a fact that all 24 applicant-s were

    under direct control of supervision from 1.4.97 to

    19.8.99. We did not submit any document to show that

    all these 24 applicants went under the control of fresh

    contractor”.

    “This piece of evidence adduced on behalf of the

    Employer rendered assistance to the applicants to

    prove their case that they have been working under

    direct control of the company.”

    ii. “Ext. 11 is a Memo issued by Sri S.C.Lall, Assistant

    General Manager (S & S) addressed to Deputy General

    Manager (Iron) Burnpur, which states-

    “Enclosed herewith please find a list of workers earlier

    employed by Ex-Contractor of Old Slag Granulation

    Plant, M/S Ashoka Trading Company. The contract with

    M/S A.T.C expired on 31.3.97 and from 1.4.97 Sorap &

    Salvage Deptt., was continuing the Plant Operation with

    the same 36 workers.

    Since a decision has been taken by contempt Authority

    that plant operation and maintenance areas would be

    managed by the Blast Furnace Department, the names

    of the concerned workers are being forwarded for future
    13

    2025:CHC-AS:904
    attendance keeping and disbursing of their salaries, Sri

    S.C.Lall, Assistant General Manager (S&S).”

    “This Memo (Ext. 11) described the present

    applicants as Earlier employed by Ex-Contractor of Old

    Slag Granulation Plant, M/S Ashoka “Trading

    Company”. Admittedly, the applicants were earlier

    employed by the Ex-Contractor Ashoka Trading

    Company. So, after expiry of the contract with M/S

    Ashoka Trading Company, these applicants were taken

    under direct control of the Management definitely for the

    need of the company. It is reiterated that the sole

    witness adduced by the company has stated on oath

    “We did not submit any document to show that all these

    24 applicants went under the control of the fresh

    Contractor.”

    iii. “So, the story of new Contractor as put forth by the

    company can reasonably be held to be a camouflage

    and has been brought into existence in order to conceal

    the relationship between the employees and the

    Management. No contractor has come forward to depose

    that the applicants were their workmen.”

    35. The tribunal followed the observation of the Hon’ble Supreme Court in

    Hussainbhai v. Alath Factory Thezhilali Union, AIR 1978 Supreme

    Court 1410, wherein the Court held:-

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    “Where a worker or group of workers, labours to
    produce goods or services and these goods or services
    are for the business of another, that other is, in fact, the
    Employer. He has economic control over the workers’
    subsistence, skill and continued employment. If he, for
    any reason, chokes off, the worker is, virtually, laid off.
    The presence of intermediate contractors with whom
    alone the workers have immediate or direct relationship
    ex contractu is of no consequence when, on lifting the
    veil or looking out the conspectus of factors governing
    employment, it is found, though draped in different
    perfect paper arrangement, that the real employer is the
    management, not the immediate contractor”.

    This case law is very much applicable here.”

    36. The learned tribunal further held that:-

    “………………. That the applicants where initially
    employed by the contractor but after the expiry of the
    contract of contractor the Management started
    controlling and supervising the work done by the
    applicants. The applicants of the instant case have been
    doing their works admittedly since 1982-83. Nothing
    has been proved to show that the Jobs performed by the
    applicants are not perennial in nature, although the
    workmen have been working for more than a couple of
    decades.”

    37. The tribunal finally held:-

    “The represented applicants are held to be the
    workmen of M/S Indian Iron & Steel Co. Ltd., Burnpur
    Works. It is also held that the applicants/workmen
    shall be treated at par with other workmen of the
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    2025:CHC-AS:904
    company for the purpose of wages and other benefits.
    It is also held that they shall be entitled to the benefits
    from the date when this reference has been made
    before the Tribunal.”

    38. It appears from the said findings in the impugned award and other

    materials on record that the workers herein are similarly placed as the

    workers before the Hon’ble Supreme Court in Civil Appeal No. 902-903

    of 2023, order dated February 07, 2023, in Steel Authority of India

    Limited vs Workmen of Steel Authority of India Limited & Anr.

    39. The issues in reference were also similar and the workmen herein are

    also part of the same company.

    40. Para 2 of the said Order/Judgment dated February 07, 2023 being

    relevant is as follows:-

    “2. Respondent No. 1 is a workers’ union of erstwhile
    Indian Iron and Steel Company (IISCO) Steel Plant at
    Burnpur, District Burdwan, West Bengal. There were
    159 workers, who were employed as contract
    labourers. They were employed, initially somewhere
    in the year 1990 or subsequent thereto on different
    dates. The present status is that out of 159 workers,
    32 have unfortunately passed away and except one,
    others have retired on superannuation.”

    41. The workers therein were also initially employed as contract labourers in

    1990. Herein they were similarly employed, even earlier that is some

    time in the year 1983.

    42. The Hon’ble Supreme Court further observed:-

    “10. …………The concept of regular employment is not a

    sine qua non for the purpose of granting the statutory

    benefits admissible to a workman under various social

    welfare legislations and in accordance with the service
    16

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    regulations/terms and conditions of employment which

    are uniformally applied by an employer qua all its

    employees………”

    43. In the present case also the tribunal has examined in depth the issue

    whether the workmen were employed by IISCO or they were contractual

    employees and held that the workmen were actually the employees of

    the petitioner herein.

    44. The Hon’ble Supreme Court has clarified that:-

    “15. ……….the instant appeals have been decided
    keeping in view the peculiar facts and circumstances of
    this case owing to the long pendency of the dispute
    coupled with the fact that out of 159 workmen, 32 have
    already died and only one workman remains in service
    while the others have attained the age of
    superannuation, and it shall not be taken as a
    precedent for other similar matters, if any, pending
    before different forums.”

    Thus the findings and observations of the Hon’ble Court is

    taken as a guidance herein, the issue being similar and also in

    the interest of justice.

    45. Accordingly the impugned award dated 22.12.2008 passed by the

    9th Industrial Tribunal, Durgapur, is modified as follows:-

    a) The order as to regularization of the services of the workmen is set

    aside.

    b) The workmen irrespective of their present status shall be entitled to

    the following service benefits:

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    2025:CHC-AS:904

    (i) Pay-scale at par with the employees who are on the roll of the
    appellant – Authority;

    (ii) The benefit of provident fund;

    (iii) The benefit under the Gratuity Act;

    (iv) The other service benefits including the medical allowance which
    the appellant – Authority has granted to its employees under the
    Service Regulations or through administrative decisions from time to
    time. Such benefits will be admissible from the cut-off date
    determined by the Tribunal.

    46. WPA 6006 of 2009 is accordingly disposed of.

    47. Connected application, if any, stands disposed of.

    48. Interim order, if any, stands vacated.

    49. Urgent Photostat certified copy of this judgment, if applied for, be

    supplied to the parties expeditiously after due compliance.

    (Shampa Dutt (Paul), J.)



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