CASE NO.: Appeal (civil) 4263 of 2006

 PETITIONER: Steel Authority of India Ltd

RESPONDENT: Union of India & Ors.

 DATE OF JUDGMENT: 26/09/2006


BENCH: S.B. Sinha & Dalveer Bhandari


J U D G M E N T [Arising out of SLP (Civil) No. 12621-13236 of 2004]

S.B. SINHA, J : Leave granted.

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(B) Evidence Act (1 of 1872). S.115 – Estoppel, acquiescence, waiver – Principles of, are applicable in an industrial adjudication – Definite stand was taken by employee that they had been working under contractors – They cannot take a contradictory and inconsistent plea that they were also workmen of principal employer – To raise such a mutually destructive plea is impermissible in law.

(C) Evidence Act (1 of 1872) S.58 – Civil P.C. (5 of 1908), O.6 Rule-7 – Admissions in pleadings – By taking recourse to an amendment madein the pleading, the party cannot be permitted to go beyond his admission – Principle applies also to industrial adjudication – Principle applies also to industrial adjudication qua reference under I.D. Act, 1947 (para 34)


Appellant is a Government company. In carrying out its activities of manufacture of steel and other products it appointed several contractors. Respondent Nos. 4 to 618 herein are said to have been employees of the contractors. They raised a dispute before the State Government demanding their absorption as permanent employees. By a notification dated 19.11.1985, the State Government referred the following industrial dispute for adjudication by the Presiding Officer, Labour Court, in exercise of its power under Section 10(1)(c) of the Industrial Disputes Act, 1947 (for short, 'the 1947' Act') : "Are the contract workers employed in the nature of contract work listed as per Annexure working in the premises of Visveswaraya Iron and Steel Ltd., Bhadravathi, justified in demanding absorption as regular permanent employees of Visveswaraya Iron & Steel Ltd. Bhadravathi? In the said proceedings, the workmen in their statements of claim filed on 26.02.1986 prayed for their absorption as permanent employees in the employment of Appellant. Inter alia, a jurisdictional question was raised by Appellant herein on the premise that the matter relating to the regulation and abolition of contract labour being governed by the Contract Labour (Regulation and Abolition) Act, 1970 (for short, 'the 1970 Act'), the reference made by the State Government was impermissible in law. It was contended that the State Government having not issued any notification prohibiting employment of contract labour in terms of Section 10 of the 1970 Act, the workmen did not have any legal right to claim absorption. Indisputably, during the pendency of the said dispute before the Labour Court, Appellant herein filed a writ petition, questioning the legality and/or validity of the said reference, which was marked as Writ Petition No.26874 of 1995. One of the questions which was raised therein was that the State Government had no jurisdiction to make a reference in relation thereto.

The writ petition was disposed of by the High Court observing that Appellant may raise a preliminary issue in that behalf. The workmen, however, on 21.11.1997 filed an additional claim statement alleging that the contracts entered into by and between Appellant and the contractors being sham and bogus, they were direct employees of the management. By reason of an award dated 13.07.1999, the said reference was held to be not maintainable. A writ petition came to be filed by some trade unions alleging that the workmen were direct employees of Appellant and were, thus, entitled to be absorbed as permanent workmen. A learned Single Judge of the High Court, by an order dated 05.12.2001, while holding the said writ petition to be not maintainable, directed : "For the reasons stated supra, these writ petitions are allowed with a direction to the Union of India  the 2nd respondent to accept the petition presented before this Court as the petition submitted by the petitioner Union raising an industrial dispute in terms of Section 2(k) read with Section 12(1) of the I.D. Act and also under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970. Further, keeping in view the law laid down by the Supreme Court in the Steel Authority of India Ltd. case and notwithstanding the fact that the conciliation proceedings are conducted, the second respondent shall in exercise of its power, make reference to the appropriate Central Industrial Tribunal or the Labour Court for adjudication of the existing industrial dispute between the workmen of the petitioner/Union and the respondent No.1 Management within eight weeks from the date of receipt of a copy of this order. The respondents 2 and 3 while exercising their power under Section 10(1)(d) of the I.D. Act shall not consider the pendency of these petitions before this Court from the year 1999 keeping in view the law laid down by the Apex Court in the Steel Authority's case referred to and pass appropriate order making reference either to Central Industrial Tribunal or Labour Court for adjudication of the existing Industrial dispute between the workmen and first respondent."

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29. It is interesting to note that in Modi Spinning & Weaving Mills Company Ltd. & Another v. Ladha Ram & Co. [(1976) 4 SCC 320], this Court opined that when an admission has been made in the pleadings, even an amendment thereof would not be permitted.

30. We are not oblivious of the decision of this Court in Panchdeo Narain Srivastava v. Km. Jyoti Sahay and Another [AIR 1983 SC 462 = (1984) Supp. SCC 594], wherein it has been held that an admission made by a party can be withdrawn and/or explained away; but we may notice that subsequently a Division Bench of this Court distinguished the said decision in Heeralal v. Kalyan Mal and Others [(1998) 1 SCC 278].

31. The effect of an admission in the context of Section 58 of the Indian Evidence Act has been considered by this Court in Sangramsinh P. Gaekwad and Others v. Shantadevi P. Gaekwad (Dead) through Lrs. and Others [(2005) 11 SCC 314], wherein it was categorically held that judicial admissions by themselves can be made the foundations of the rights of the parties and admissions in the pleadings are admissible proprio vigore against the maker thereof. [See also Union of India v. Pramod Gupta (Dead) by Lrs. and Others [(2005) 12 SCC 1]

32   Recently this Court in Baldev Singh and Others etc. v. Manohar Singh & Another etc. [2006 (7) SCALE 517], held : "Let us now take up the last ground on which the application for amendment of the written statement was rejected by the High Court as well as the Trial Court. The rejection was made on the ground that inconsistent plea cannot be allowed to be taken. We are unable to appreciate the ground of rejection made by the High Court as well as the Trial Court. After going through the pleadings and also the statements made in the application for amendment of the written statement, we fail to understand how inconsistent plea could be said to have been taken by the appellants in their application for amendment of the written statement, excepting the plea taken by the appellants in the application for amendment of written statement regarding the joint ownership of the suit property. Accordingly, on facts, we are not satisfied that the application for amendment of the written statement could be rejected also on this ground. That apart, it is now well settled that an amendment of a plaint and amendment of a written statement are not necessarily governed by exactly the same principle.

33. It is true that some general principles are certainly common to both, but the rules that the plaintiff cannot be allowed to amend his pleadings so as to alter materially or substitute his cause of action or the nature of his claim has necessarily no counterpart in the law relating to amendment of the written statement. Adding a new ground of defence or substituting or altering a defence does not raise the same problem as adding, altering or substituting a new cause of action. Accordingly, in the case of amendment of written statement, the courts are inclined to be more liberal in allowing amendment of the written statement than of plaint and question of prejudice is less likely to operate with same rigour in the former than in the latter case." While laying down the principle, this Court followed Modi Spinning & Weaving Mills Co. (supra) and distinguished Hira Lal (supra).

34. It is, thus, evident that by taking recourse to an amendment made in the pleading, the party cannot be permitted to go beyond his admission. The principle would be applied in an industrial adjudication having regard to the nature of the reference made by the Appropriate Government as also in view of the fact that an industrial adjudicator derives his jurisdiction from the reference only.


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