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Indian Case Summary

Steel Authority Of India Ltd. & … vs National Union Water Front … on 30 August, 2001 – Case Summary

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In the case of Steel Authority Of India Ltd. & Ors. Etc. Etc. vs National Union Water Front Workers & Ors., the Supreme Court of India delivered a judgment on 30th August 2001. The bench consisted of B.N. Kirpal, Syed Shah Quadri, M.B. Shah, Ruma Pal, and K. G. Balakrishnan. The case was an appeal (civil) 6009-6010 of 2001, arising out of S.L.P. (C) NOS.12657-58/98.

Facts of the Case

The appellants, a Central Government Company and its branch manager, were engaged in the manufacture and sale of various types of iron and steel materials in its plants located in various States of India. The work of handling the goods in the stockyards of the appellants was being entrusted to contractors after calling for tenders. The Government of West Bengal issued a notification prohibiting the employment of contract labour in four specified stockyards of the appellants at Calcutta. The first respondent-Union representing the cause of 353 contract labourers filed a Writ Petition in the Calcutta High Court seeking a direction to the appellants to absorb the contract labour in their regular establishment in view of the prohibition notification of the State Government.


Three points were raised for determination in these appeals:

  1. The true and correct import of the expression “appropriate government” as defined in clause (a) of sub-section (1) of Section 2 of the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA Act).
  2. The validity of the notification dated December 9, 1976 issued by the Central Government under Section 10(1) of the CLRA Act and its applicability to all Central Government companies.
  3. Whether automatic absorption of contract labour, working in the establishment of the principal employer as regular employees, follows on issuance of a valid notification under Section 10(1) of the CLRA Act, prohibiting the contract labour in the concerned establishment.

Court’s Observations

The court observed that the CLRA Act was enacted to deal with the abuses of contract labour system. The 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. The court also noted that the State is under an obligation to improve the lot of the work force. The Directive Principle of State Policy incorporated in Article 38 mandates the State to secure a social order for promotion of welfare of the people and to establish an egalitarian society.

The court also discussed the definition of “appropriate government” in the context of the CLRA Act and the Industrial Disputes Act, 1947. The court noted that the phrase “any industry carried on by or under the authority of the Central Government” is a common factor in both the unamended as well as the amended definition.

The judgment in this case is extensive and covers a wide range of legal and factual issues. The above is a summary of the key points, but the full judgment contains much more detail and legal analysis.