The Supreme Court refused to entertain an appeal filed by a company seeking restriction on wages of its workmen saying that it is a case of wrongful denial of employment for no fault of workmen.

The company Mahandi Coalfields Ltd., a subsidiary of Coal India Ltd. had preferred an appeal against the Brajrajnagar Coal Mines Workers’ Union.

The two-Judge Bench comprising Justice P.S. Narasimha and Justice Sandeep Mehta observed, “This is a case of wrongful denial of employment and regularization, for no fault of the workmen and therefore, there will be no order restricting their wages. … With respect to payment of backwages, we are of the opinion that the workmen will be entitled to backwages as observed by the Industrial Tribunal.”

Senior Advocate Aman Lekhi appeared for the appellant/company while Senior Advocate Ashok Kumar Panda appeared for the respondent/union.

Factual Background -

The appellant-company floated a tender for the transportation of crushed coal and selected a successful contractor for performance of the agreement for the period 1984 to 1994. The contractor employed workmen for execution of this contract and he respondent-union espoused the cause of the workmen who were engaged by the contractor and sought permanent status for them. It relied on clauses 11.5.1 and 11.5.2 of the National Coal Wage Agreement-IV and under these clauses, it was agreed that the employer shall not engage contract labour with respect to jobs which are permanent and perennial in nature. They also provided that such jobs shall be executed through regular employees. Following the representation of the respondent-union, the Assistant Labour Commissioner sent a notice to the company for conciliation. The conciliation process eventually culminated in a settlement under Rule 58 of the Industrial Disputes (Central) Rules, 1957.

In view of the fact that the settlement is confined to only 19 workmen, the Central Government referred the entire dispute to the Industrial Tribunal under Section 10 (2A)(1)(d) of the Industrial Disputes Act, 1947 before the Industrial Tribunal, Rourkela, Odisha. Before the Tribunal, the workmen examined 3 witnesses in support of their case and the management examined 4 witnesses. The Tribunal allowed the industrial dispute and directed the regularization of the remaining 13 workmen. Questioning the legality and validity of the Tribunal’s judgment, the company filed a writ petition before the Orissa High Court. The Division Bench of the High Court heard the matter, and by its judgment, dismissed the writ petition. Hence, the company approached the Apex Court.

The Supreme Court in view of the above facts said, “The appellant has failed to establish any distinction between the two sets of workers. The Tribunal was, therefore, justified in answering the reference and returning the finding that they hold the same status as the regularized employees. … We are also not impressed with the artificial distinction which the appellant sought to bring about between the 19 workers who were regularized and the 13 workers who were left out. The evidence on record discloses that, of the total 32 workmen, 19 workers worked in the bunker, 6 worked in the Coal Handling Plant, and 7 worked on the railway siding. However, of the 19 workers who were regularized, 16 worked in the bunker, and 3 worked in the Coal Handling Plant. However, 3 workers from the same bunker, 3 workers from the same Coal Handling Plant and again 7 workers from the same railway siding were not regularized.”

The Court taking into account, the long-drawn litigation affecting the workmen as well as the appellant in equal measure and taking into account the public interest, directed that the backwages be calculated from the decision of the Tribunal in 2002.

Accordingly, the Apex Court dismissed the petition and directed that the concerned workmen shall be entitled to backwages.

Cause Title- Mahandi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union (Neutral Citation: 2024 INSC 199)


Appellant: Senior Advocate Aman Lekhi, Advocates Siddharth Jain, Soumyajit Pani, and Aishwary Bajpai.

Respondent: Senior Advocate Ashok Kumar Panda, Advocates Tejaswi Kumar Pradhan, Mohan Prasad Gupta, Manoranjan Paikaray, and Shashwat Panda.

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