Holding

The Board remains the employer of security guards allotted from the pool, retaining the power to recall, re‑allot and terminate their service, and the guard does not become a direct employee of the principal employer.

Summary

The Supreme Court examined whether a security guard allotted by the Maharashtra Private Security Guards Board to a principal employer becomes the employee of that employer, thereby stripping the Board of its power to recall, re‑allot or transfer the guard. The petitioners, trade unions, argued that the guard becomes a direct employee upon allotment, while the respondents contended that the Act and its 1981/2002 Schemes constitute a complete code making the Board the employer with exclusive powers over recruitment, discipline, and transfer. The Court applied the master‑servant test, interpreting "employer" under s.2(3) of the Act as the person who has ultimate control over the establishment where the guard works. It held that the Board, not the principal employer, remains the employer for guards in the "Pool" and retains the inherent power to recall, re‑allot and terminate their service. Consequently, the appeals were dismissed, affirming the High Court's rulings and upholding the statutory scheme.

Issues considered

The definition of "employer" under the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 in relation to security guards allotted by the Board.
Whether the Board loses its power to recall, re‑allot or transfer a guard once the guard is allotted to a principal employer.
The applicability of the master‑servant relationship test to determine employer‑employee status of security guards.
The effect of the 1981 and 2002 Schemes on the employer‑employee relationship and on the rights of guards.

Legislation cited

Subjects

security guardsemployer-employee relationshipstatutory boardallotmentrecalltransferlabour lawmaster-servant testself-contained code

Judgment

[2008] 12 S.C.R. 649

.... ~
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA A
v.
.... BHARAT SANCHAR NIGAM LTD. AND ORS .
(Civil Appeal Nos. 4473-74 of 2002)
AUGUST 25, 2008
B
~
~ [DR. ARIJIT PASAYAT, LOKESHWAR SINGH PANTA
AND P. SATHASIVAM, JJ.]

Maharashtra Private Security Guards (Regulation of
Employment and Welfare) Act, 1981; Ss. 1(4), (2), 19, 20 & 21 c
and Schem(1s 1981 and 2002 made thereunder:
Employer-employee relationship - Security Guards
Board - Power to recruit, select, appoint, allot, promote,
terminate, recall, re-allot or transfer-· Held: Person who has-
ultimate control over the affairs of the factory/establishment D
-..,f,
where security guard deployed is employer/principal employer
- 1981 Act is a complete code - Board has been vested with
)
.all powers to regulate all aspects of employment/service
conditions of private security guards - Only for those service
conditions not regulated by the Act/Scheme, the principal E
employer could be treated as employer of security guards -
In terms of s. 1(4) of the Act, security guards cannot be said to
be in regular/direct employment of the principal employer -
Under 1981 and 2002 Schemes, power to supervise, control,
disciplinary action, termination vested with the Board - Hence, F
~ High Court rightly concluding the Board as the employer for
.. Security Guards.
Words and Phrases:
'employer' - Meaning of in the context of s. 2(3) of the
G
Maharashtra Private Security Guards (Regulation of
-#- Employment and Welfare) Act, 1981.
The question which arose for consideration in these
appeals was as to whether after allotment of guards to a
649 H
650 SUPREME COURT REPORTS [2008] 12 S.C.R.

A principal e~ployer, the Security Guard Board constituted
under the Maharas.htra Private Security Guards
(Regulation of Employment and Welfare) Act,. 1981 loses
the power to recall, re-allot or transfer such guard on the
ground that they become an employee of the principal
B employer.
Appellants-Union contended that under the
Maharashtra Private Security Guards· (Regulation of
Employment and Welfare) Act and the Scheme framed
thereunder the security guards, on allotment by the Board
C to an employer/principal employer, become the
employees of that Principal Employer; that the Board is
nothing but a statutory recruitment/allotment body
invest~d with certain powers to oversee the master-
servant relationship which exists between the guards and
D the principal employers to whom they are allotted; that
the mere fact that such power~ are given to a Board by·
statute does not mean that the ·master servant relationship
does not exist between the guards and the principal
employers.
E Respondents-employer submitted that the
Maharashtra Private Security Guards Act and Scheme
framed thereunder constitute a complete and self-
contained code;. that Security Guards who seek
registration with the statutory. Board and are allotted to
F different principal employers by the Board continue to be
members of the "Pool" as defined in Clauses 4(f) and 4(g)
of the 1981 Scheme which 1sctefined as. the "Board Pool"
.

in Clause 3(c) -of the 2002 Scheme and consequently
continue to be subject to common seniority maintained
G by the Board (Clause 16 of 1981 Scheme) and (Clause 15
of 2002) Scheme; that the power to recruit, select, appoint,
allot, promote, transfer, take disciplinary action, and
terminate employment of the security guard in the "Pool"
or "Board Pool" ·is vested exclusively in the statutory
H Board; that the principal emriloyer has no power
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 651
BHARAT SANCHAR NIGAM LTD. & ORS .
..., ..,.,.
whatsoever except to issue routine directions in the A
course of day to day security work; that if guards were to
become employees of the principal employer upon
allotment, the entire Scheme would cease to apply to them
instantly upon being allotted to a particular employer;
and that in any event, all these arguments have time and B
• ·t again been considered and rejected by the Bombay High
Court, and applying the principle of stare decisis and also
the res judicata, the Judgments of the High Court which
have held the field for the past 25 years ought to be upheld
and affirmed. c
Dismissing the appeals, the Court
HELD: 1.1 Under Clause 3 of Section 2 of the
Maharashtra Private Security Guards (Regulation of

-
111111 ,.>
'"'
Employment and Welfare) Act, "employer" means the
person who has ultimate control over the affairs of the
factory or establishment where the security guard is
employed. Under the original Act as well as under the
D

-"'
amended Act the person who has ultimate control over the
affairs of the factory or establishment where the security
guard is deployed is his employer. (Para - 7) [656 H, 657 A] E
~
1.2 As per Clause 26(4) of the unamended Scheme
(and Clause 24(4) of the amended scheme), the security
guard must work under the supervision, control and
direction of the person who has ultimate control over the p
--\ affairs of the factory/establishment where he is deployed.
~
Therefore, under the tests laid down by this Court for
establishing the master-servant relationship, the person
who has ultimate control over the affairs of the factory or
establishment where the security· guard is deployed, is
G
the employer of the guard. (Para - 9) [657-E,F,G,H; 658-A]
Dharangadhara Chemical Works Ltd. v. State of
Saurashtra (1957) SCR 152; Mangalore Ganesh Beedi Works
etc. v. Union of India etc. AIR (197 4) SC 1832; Silver Jubilee
Tailoring House and Ors. v. Chief Inspector of Shops and H
.-
652 SUPREME COURT REPORTS [2008] 12 S.C.R.

~ ._,
A Establishments and Anr (1974) 3 SCC 498; Hussainbhai,
Calicut v. The Alath Factory Thezhilali Union, Kozhikode and
Ors. (1978) 4 SCC 257 and Indian Petrochemicals
Corporation Ltd. and Anr v. Shramik Sena and Ors. (1999) 6
sec 439 :.... relied on.
B 1.3 Sections 19, 20 and 21 of the Act, specifically
state that the employer is the person who has control
-1
over the factory or establishment where the security guard
is employed, since admittedly, wages are paid by that )

person though it may be at ~imes through the medium of I-
c the Board for convenience. (Para - 10) [658 A B]
1.4 It is clear that virtually all the .arguments which
are now being advanced were also advanced earlier and
each one was specifically dealt with and rejected by the
High Court. It was held that (a) the Act was a complete
D ~r
and self contained code; (b) the Board had all necessary ~-
!
powers under the Act to regulate all aspects· of r
employment and all service conditions of private Security ~-Ill'!'"
~

Guards; (c) there was no need under the Act and the
Scheme to iQ.entify the employer of Security Guards as all
E conditions of their employment were governed by the
Act; and (d) if at all there was any conditions of service >-
which are not regulated or covered by the Act and the
Scheme then for such conditiohs only the principal
I
employer would be treated as the employer of the Security
F Guard. (Para - 17) [663 E,F,G,H] .,,..__ ~
'\
Security Guards Board v. State of Maharashtra (1987 (3) ;
-~
sec 413) - relied on.
Vizagapatnam Dock Labour Board v. Stevedores Assn.
G Vizagapatnam and Ors. (1970 (2) SCR 303 - distinguished.
~
Krantik9ri Surakspa Rakshak Sangathana v. S. V Naik
(1993 (1) CLR 1003):.. referred to.
2.1 Apart from the fact that in several earlier petitions
H the appellant~ Union had unsuccessfully come up with
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 653
BHARAT SANCHAR NIGAM LTD. & ORS.

very same pl"eas, the orders had attained finality and the A
issue cannot be permitted to be indirectly raised in the
manner done. The Act and the schemes make it clear that
they apply only to security guards who are "Pool Security
Guards". The Act and the Scheme clearly constitute a
I 4 complete and self contained code which covers private B
--t
Security Guards. Section 1(4) of the Act and various
provisions of 1981 and 2002 Schemes make it clear that
the arguments that the guard once allotted with the
principal employer he becomes the direct and regular
employee of the principal employer is without any c
substance. As rightly noted by the High Court the
provisions of the Act and the statute make it clear that the
Board's power of allotment carries with it the implicit and
inherent power to recall, re-allot and transfer a guard from
one principal employer to another. It needs no emphasis
0
that the power to appoint carried -with it the inherent power
to terminate. Therefore, the power to allot necessarily
',,> carries with it th~ inherent power to re-allot or cancel the
allotment.. It is also seen that both under the 1981 and
2002 Schemes certain clauses provide for transfer of
guards. It is also significant that under both the Schemes E
there is provision for continued supervision, control,
disciplinary powers and powers of termination vested in
the Board. (Para - 24) [671 E-H; 672-A-B]
2.2 Sections 19, 20 and 21 of the Act specifically F
provide for application of certain Act to Security Guards.
These specific statutes have application. Other statutes
are dealing with employer and employee relationship and
the rights thereunder which are made applicable to
Security Guards. To put it differently, only the statutes
clearly indicated are applicable to Security Guards. Other G
statutes are clearly excluded. (Para - 25) [672-C-D]
Case Law Reference
(1957) SCR 152 Relied on Para - 9
H
654 SUPREME COURT REPORTS [2008] 12 S.C.R.
.'f° ·~

A AIR (1974) SC 1832 Relied on Para - 9
~
(1974) 3 sec 498 .Relied on Para - 9
(1978) 4 sec 2s1 Relied on Para - 9
I

(1999) s sec 439 Relied on Pata - 9 ~

B . (1970 (2) SCR 303 , distinguished Para - 4 ·
t L
(1987 (3) sec 413) Relied on Para - 22 r

(1993 (1) CLR 1003) Referred to Para - 23
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
c 44 73-44 74 of 2002;
From the final Judgment and Order dated 19.4.2002 of
the High Court ofJudicature at Bombay iri W.P. Nos. 4120 of
1999 and 431 of 2000
D WITH
. C.A. Nos. 4192, .4475, 4476, 4477, 4478, 4692-93, 4698-
r
r
....
4701, 4702-4704, 4695-4697 of 2002, 216 of 2003, 6722 of
2004 ·and 522.7 of 2008. .
E ,. K.K. Singhvi, Colin Gonsalves, L.N. Rao, C.V. Singh, S.
Naphde, R. Sundaravaradan, Rakesh Munjal, S.K. Singhvi; Jane
Cox; Nandini Gore,·.Vikas Padora, Jyoti Mendiratta, Sanjay
Singhvi; Zzen Cox, Aparna Bhat, Sanjay Kapur, Uttara Babbar,
Arti Singh, Sanjay Bhatt, S. Mehendran, Abhishek Kumar, S.
F Mahendran, Ramesh N. Keswani, Ramlal Roy, Ramesh Singh,
Nina Gupta, Akankstia, Swigin, Bina Gupta, R.K. Sanghi, Arlin
Vidyaaarthf, Stiweta Gupta R.P. Singh, P. Narasimha, Anil
Kumar Tandale, Lata Oesai, Vimal Chandra S. Dave, Mukesh
I
K. Giri, Subhash Chandra Birla, Malini Poduval, Kuldip Singh,
G Tar~n Johri, Amit Kumar, Asha G. Nair, Ashok Mathur for the
appearing ·parties.
~
..
The Judgment of the Court was delivered by
Dr. ARIJIT PASAYAT, J. 1. Leave granted in SLP (C)
H No.13553/2007.
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 655
BHARAT SANCHAR NIGAM LTD. & ORS. [DR. ARIJIT PASAYAT, J.]

- ''+ 2. In these appeals challenge is to. t~e judgment of the A
Bombay High Court dismissing a batch of writ petitions filed by
the appellants who are trade unioris in the writ petitions. The
principal contention was that once Security Guard Board
constituted under the Maharashtra Private Security Guards

\ . 1
(Regulation of Employment and Welfare) Act, 1981 (in short the
'Act') allots guards to a principal employer, it looses the power
to recall, re-allot or transfer such guard as the guard so allotted
B

becomes an employee of the principal employer. By the
impugned judgment the High Court held that the main
contentions advanced by the Unions were covered by a series c
of judgments of earlier Division Benches as well as of learned
Single Judges of the High Court which were binding upon it.
Nevertheless, the Division Bench also examined· the
acceptability of contentions advanced and ultimately held that
the contentions were without substance.
D
"( 3. Stand of the appellants in. short is as follows:
Under the Act and the Scheme framed thereunder the
,)
security guards, on allotment by the Board to an employer/
principal employer, become the employees of that Principal
Employer. E

The exploltation of around 70,000 private security guards
employed through agencies in Maharashtra was extreme and
notorious. It has been set out in detail by His Lordship Justice
P.B. Sawant, as His Lordship then was, in the case of Mis. F
__.,, Tradesvel Security Services Pvt. Ltd. Vs. State of Maharashtra
'
(84 BLR 604). It was·to ensure that such exploitation could no .
longer ta.ke place that the Board was set up by. the State
.Government and given certain super-Visory powers. The Board
is thus nothing but a statutory recruitment/allotment body-invested
G
with certain powers to oversee the master-servant relationship
1 which exi_sts between the ,guards and registered_ employers to
whom they are allotted, in the context of the historical gross
exploitation of this section of the workers in the state. The mere
fact that such powers are given to a Board by statute does not
H
656 SUPREME COURT REPORTS [2008] 12 S.C.R.

A mean that the master seNant relationship does not exist between
the guards and registered employers to whom they are allotted.
¥ - ;

It is always open for this relationship to be regulated by statute.
It is an anathema to Indian industrial law that a servant
cannot have a master. Thus, an employer for the registered
B guards has to be identified. The Board cannot be held to be
their employer, and it is not its case that it is the employer. 1' •
4. Strong reliance is placed on a decision of this Court in
Vizagapatnam Dock Labour Board v. Stevedores Assn.
c Vizagapatnam and Ors. (1970 (2) SCR 303). This Court held
that the registered employer to whom the labour force is allotted
by the board is the employer whose work of loading and
unloading of ships is done by the dock workers allotted-to them;

D 5. It is pointed out that this conclusion was arrived'at despite
the circumstances that on recruitment and registration of the y
dock labour force,_ fixation of wages and D.A., payment of
workmen's compensation, taking of disciplinary actio_n, ......
prohibition of employment of workmen who were not registered
E with the board, categorization and fixation including increa.se
or decrease in the number of dock workers and transfer and
,
~

promotion of dock workers were done by the .board. -Reliance
has also been made on several judgments of learned Single
Judge of the Bombay High Court.
F · 6. It is pointed out by the respondents that the entire batch
of writ petitions before the High Court to which these appeals
,._ •
relate are concerned with Security Guards supplied by the
statutory board to principal employers and have nothing to do .
with private security agencies or agency guards. All the ·principal
G .employers involved in these' appeals had at the concerned time
been using Board guards i.e. those recruited and selected by
~ . ,.__
the Board post.1987 to various principal employers.
I -
7. Under Clause 3 of Section 2 of the original Act
"employer" means the person who has ultimate control over the ·
H
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 657
BHARAT SANCHAR NIGAM LTD. & ORS. [DR ARIJIT PASAYAT, J.}
~

-1
4 affairs of the factory or establishment where the security guard A
is employed.
Under the said Act, as amended, with effect .from 29th
April, 1996:-
(i) Clause 3 of section 2 provides that employer in B
relation to security guards in the direct employment
•1 of an agency or agent and deployed in a factory or
establishment through such agency or agent means
such agency or agent.
ii) Clause 8 of section 2 states that 'Principal employer' c
in relation to any security guard deployed in a factory
or establishment by an agency or agent or board
means the person who has ultimate control over the
affairs of the factory or establishment.
D
8. Thus, under the original Act as well as under the
i amended Act the person who has ultimate control over the
-
affairs of the factory or establishment where the security guard
) is deployed is his employer.
9. As per Clause 26(4) of the unamended Scheme (and E
Clause 24(4) of the amended scheme), the security guard must
work under the supervision, control and direction of the person
who has ultimate control over the affairs of the factory/
establishment where he is deployed. Therefore, under the tests
laid down by this Court for establishing the master-servant F
_..._ relationship as in the case of Dharangadhara Chemical Works
Ltd. v. State of Saurashtra (1957 SCR 152), Mangalore Ganesh
Beedi Works etc. v. Union of India etc. (Al R 1974 SC 1832),
Silver Jubilee Tailoring House and Ors. v. Chief Inspector of
Shops and Establishments and Anr. (1974 (3) SCC 498),
G
Hussainbhai, Calicut v. The Alath Factory Thez~ilali Union,
-1 Kozhikode and Ors. (1978 (4) SCC 257) and Indian
Petrochemicals Corporation Ltd. and Anr. v. Shramik Sena
and Ors. (1999 (6) SCC 439) the person who has ultimate
control over the affairs of the facto;y or establishment where the
H
658 SUPREME COURT REPORTS [2008] 12 S.C.R.

A security guard is deployed, is the employer of the guard.
, -»

10. Sections 19, 20 and 21 of the Act, specifically state
that for the purpose of the Act mentioned therein the employer
is the person who has control over.the factory or establishment
where the security guard is employed, since admittedly, wages
B are paid by that person though it may be at times through the
medium of the Board for convenience.
11. With reference to Section 1(4) of the Act it is pointed
out by the respondent that it applies to persons who worked as
c security guards in any factory or establishment but who are not
direct and regular employees of the factory or establishment as
the case may be. Reference is also made to Section 2 (1)
stating that in this Act unless the context otherwise requires
'agency' or 'agent' in relation to a Security Guard, means an
individual or_ body of individuals or a body Corporate, who
0
undertakes to execute any security work or watch and ward
work for any factory or establishment by engaging such Security
GJard on hire or otherwise, or who supplies such Security
Guards either in groups or as an individual, and includes a sub-_ ....
agehcy or a sub-agent of the Board.
E
12. Section 2(10) defines a 'Security Guard'. It is pointed
out that though there is no dispute that the respondent in each
case is the principle employer but the prayer made in the writ
petitions cannot be accepted in view of what is stated in Section
F 1(4): Section 2(3) defines the 'employer'. It is also submitted
that earlier also similar. petition had been. filed and
notwithstanding adverse adjudication, the Unions ·are still
persisting in pursuing the claims which had already been
reject~d.

· G .- 13. Learned counsel for respondents in Civil Appeal
No.4477 of 2002 has submitted as follows:
· (a} the Maharashtra Private Security Guards Act and
Scheme framed thereunder· constitute a comp1ete
, and self-contained code; .
H
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 659
BHARAT SANCHAR NIGAM LTD. &ORS. [DR ARIJIT PASAYAT, J.]
"' ~1 Security Guards· who seek registration with the A
(b)
statutory Board and are allotted to different principal
employers by the Board continue to be members of
the "Pool" as defined in Clauses 4(f) and 4(g) of the
1981 Scheme which is defined as the "Board Pool"
in Clause 3(c) of the 2002 Scheme and consequently B
continue to be subject to common seniority
t
maintained by the Board (Clause 16 of 1981
Scheme) and Clause 15 of 2002. Scheme transfers
by the Board, disciplinary action including termination
by the Board (Clause 31 of .1981 Scheme) and c
Clause 32 of 2002 Scheme.
(c) The power to recruit, select, appoint, allot, promote;
transfer, take disciplinary action, and terminate
employment of a registered security guard in the
"Pool" or "Board Pool" is vested exclusively in the D
"( statutory Board.
(d) The principal employer has no power whatsoever
)
except to issue routine directions in the course of
day to day security work. Even Security Supervisors
and Security Officers are supplied/allotted by the E
Board, and these Supervisors and Officers function
under the control of statutory Inspectors appointed
by the Board;
(e) The Appellant's argument that a security guard F
allotted to a principal employer becomes the
employee of that principal employer, arid equally the
argument that the Board's power to allot is a one-
time power which gets exhausted once allotment is
made, is completely misconceived and. ignores
G
virtually all the provisions of the Act and Scheme;
' (f) Among other things~ ttiis argument ig-nores Section
·1(4) of the Act, which specifies thatthe Act applies
only to those security guards "who are not direct and
regular employees of the factory or establishment, H
660 SUPREME COURT REPORTS [2008] ·12 S.C.R.

...-
~"·
.
A as the case may be". If the Appellant's argument is
accepted, the guards upon allotment ·will become
di"rect and regular· employees of the. principal'
employer, and thereby will go out of the purview· of
the Act and Scheme, thus losing the entire protection
B of the statutory provisions. It also ignores the
provisions of the Scheriie, which apply only to guards
who are in the "Pool" or are "P9ol Security Guards" -t
(under the 1981 Scheme) and are in the "Board Pool"
(under the 2002 Sch~me). If guards were to become
c employees of the principal employer upon allotment,
the entire Scheme would cease to apply to them
instantly upon being allotted to a particular employer;
(g) If the Appellant's arguments are accepted, it would
mean that the entire Scheme would become nugatory
[j and redundant. It is important to note that the 1981 .
Scheme applied only to guards recruited, appointed y
and allotted by the Board (the 2002 Scheme also
applies in addition to guards employed by private . J

security agencies, with which these appeals are not
E concerned. Insofar as the Board's guards are
concerned, the entire provisions of the Scheme are
dependent upon their continuing to be controlled by
the Board after allotment. The Appellants' argument
would completely defeat these provisions and ren_der
F the entire Scheme into a dead letter..
)-
(h) In any event, all these arguments have time and again
been considered and rejected by the Bombay High
Court, and applying _the· principle of stare decisis,
the Judgments of the High Court which have held the
G field for the past 25 years ought to be upheld and
affirmed.
-t-
(i) Without prejudice to the. above, in
any case the
present appellants are· barred by' res judicata, or
principles analogo·us thereto, from raising such
H
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 661
BHARAT SANCHAR NIGAM LTD. & ORS. [DR. ARIJIT PASAYAT, J.]
' lj arguments, as the very same submissions have time A
and again been rejected by the Bombay High Court
in proceedings filed by the appellant Union, and the
said Judgments having gone unchallenged by the
present appellant, they have become final and binding
against the Krantikari Suraksha Rakshak Sanghathan. B
-
f
14. It is pointed out that only four grounds were urged by
the High Court and each one of them has been dealt with. It is
also pointed out that Sections 19, 20 and 21 specifically provide
for application of certain Act to the Security Guards. These are
Workmen's Compensation Act, Payment of Wages Act and c
Maternity Benefits Act which shows what for these specific
statutes are. No further Statute dealing with employer and
employee relationship and their rights thereunder is made
applicable or available to the Security Guards. In other words,
the provisions of the Act make it clear that it is only these statutes D
"( which have be~n specifically made applicable to the Security
Guard and accordingly, other statutes are clearly excluded .
.,}
15. Reference is also made to Schemes of 1981and2002.
16. On consideration of rival submissions one thing is E
crystal clear that the appellants based their case on the decision
in Vizagapatnam Dock Labour's case (supra). The respondents
on the other hand relied on several earlier judgments of the
Bombay High Court, a few of which were deciding petitions
filed by some of the appellant's Union, and in Writ Petition F
-\ No.2671 of 1992 the claim of direct employment with the·
principal employer by allotment by the Boardwas agitated and
was rejected by a Division Ben.ch consisting of Hon'ble Mrs.
Justice Sujata Manohar and Hon'ble Mr. Justice S.H. Kapadia.
The Bench inter-alia observed as follows:
G
"7. The petitioners had relied upon a decision of the
Supreme Court in the case of Dock Labour Board v.
Stevactoras Assoco reported in Al R 1970 SC page 1826
at page 1632. Tbe Supreme Court while considering the
Scheme framed under the Dock Workers (Regulation of H
662 SUPREME COURT REPORTS [2008] 12 S.C.R.

A Employment) Act; 1948 had discussed the position of the ¥ -
Dock Labour Board under the Scheme. The Supreme
Court observed tn this connection that the purport of the
Scheme was that the entire body of workers should be
under the control and the entire body of workers should be
B under the control and supervision of the Board. But the
,Board cannot be consid~red to be the employer of the ...._-v
. (
Dock Labour Workmen. After discussing the various
provisions of that Scheme, the Supreme Court said that
the registered employer to whom the labour force is allotted ·
c by the board is the employer whose work of loading or
unloading of ships is done by the workers allotted to them.
The Supreme Court was not concerned in that case with
the question whether the Board had the power to allot
labourers to another registered employer or not. The mere
fact, therefore, that the certain purposes the_employees is
D
considered as an employees of the registered employer
'r
under the Dock Labour Scheme is not of any assistant to
the petitioners in the present petition. In fact, it was pointed
~.
out by.Mr. Devitre, Ld. Counsel for the 151 respondents
that under sections 19, 20 and 21 of the Maharashtra
E Private Sequrity Guards (Regulation· of Employment and
Welfare) Act, 1951 .• the Board shall be deemed to be the
employer of registered sec_urity guards for certain purposes
as set out in these sections. Therefore, the above decision
of the Supreme Court does not assist the petitioners in
F the present· case. _)-
8. The Secretary of the 2nd respondent's Board has set
out in his affidavit that the security guards who were working
with the 1st .respondents at Sewri and Wadala Units had
beqome, by reason of their length of posting familiar with
G
the employees and outside parties like suppliers and
.transporters. It was, therefore, felt necessary for betteF
security, that the security guards should be rotated by the
Board sending a fresh allotment. The 2nd respondent Board ··
therefore agreed to rotate the security guards batchwise.
H
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 663
BHARAT SANCHAR NIGAM LTD. & ORS. [DR ARIJIT PASAYAT, J.]
/
lf
It accordingly transferred five security guards working in A
the Wadala Unit to other establishments in the year 1992.
No dispute was raised at that stage. The petitioners have
filed this petition now on an apprehension that they may all
be allotted to other employers. No orders, however, of a
fresh allotment have been issued as far as the petitioners B1
y are concerned, except for the five employees who were
sent to other establishments in 1992.
9. It is also necessary to note that the service conditions
of the petitioners are not going to be adversely affected
even if they are allotted to other registered employers. c
The 2nd respondent has stated that if the petitioners or any
of them are withdrawn from the 1st respondent such a
withdrawal will be concomitant with their allotment to
another registered employer. In these circumstances we
also do not see any prejudice to the petitioners who also D
'f
do not see any prejudice to the 4th petitioner who are fully
protected under the said Scheme."
,)
17. It is clear that virtually all the arguments which are now
being advanced were also advanced earlier and each one was
specifically dealt with and rejected. It was held that E
Vizagapatnam Dock Labour's case (supra) was clearly
distinguished and had no application. Earlier to that Justice
P.B. Sawant (as he then was) by judgment dated 2.11.1982
dealt with the matter at great length. By the said judgm~nt, the
Hon'ble Judge .upheld the constitutional validity of the Act and F
the Scheme and it was held that (a) the Act was a complete and
self contained code; (b) the Board had all necessary powers
under the Act to regulate all aspects of employment and all
'.
service conditions of private Security Guards; (c) there was no
need under the Act and the Scheme to identify the employer of G
Security Guards as all conditions of their employment were
governed by the Act; and (d) if at all there was any conditions
of service which are not regulated or covered by the Act and the
Scheme then for such conditions only the principal employer
would be treated as the employer of the Security Guard. H
664 SUPREME COURT REPORTS {2008] 12 S.C.R.

...
I-

¥
A 18. The judgment in Vizagapatnam Dock Labour's case
(supra) was d(stinguished and it was held that the Dock Labour
· Act and the scheme thereunder were different from the Act and
Scheme. It appears that the appellant- Krantikari $uraksha
Rakshak Sanghatana made another attempt to raise the same
B issues. They were negatived by Justice B.N. Srikrishna as he
then was. The learned Judge expressly followed the judgment 1
of Justice P.B. Sawant holding that there was no need to identify
the employer as it was complete and self-contained code. It
was however held that if there were any aspects not covered by
c the Act, such as 'unfair labour practice"- which was nqt involved
the principal empioyer would be treated for the limited purpose
be identified as the employer. It was inter alia observed as
follows:
22. "Mr. Singhvi submitted that he was really not interested
D in urging that the Security Guards Board was the employer
'r
of the Security Guards under the Security Guards Act and
the Security Guards Scheme. He was at pains to contend
that under the terms of the Security Guards Scheme, a ---.
registered ·employer would become the employer of the .,.
E Security Guard from the moment the Security Guard was
allotted to the registered employer. Before dealing with
this contention, I might dispose of the subsidiary contention
of Mr. Singhvi which appears to be no longer tenable. Mr.
Singhvi contended that though Clause 16 of the Security
F Guards Scheme bears the heading "Promotion and -~
transfer of Security Guards", there is no provision
whatsoever contained in the entire Clause 16 with regard
to transfer of Security Guards. Hence, the Security Guards
Board has no power to transfer a Secu.rity Guard from one
establishment to another, in the submission of Mr. Singhvi.
G
He contends that the power of allotment of Security Guards
to the industrial establishment of the registered employer
possessed by the Security Guards Board is exhausted
upon one time exercise thereof. Once the Security Guard
is ailotted to a registered employer, the power is.exhausted
H

'
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 665
BHARAT SANCHAR NIGAM LTD. & ORS. [DR. ARIJIT PASAYAT, J.]

and there is no further power _in the Board directly or by A
implication.; under the Security Guards Scheme, to
withdraw the Security Guard and to re-allot him to another
registered establishment. Though prima facie attractive -
this contention is not sound in my view, apart from being
r:fo longer res integra. B
,\. ..
, 23. The Division Bench
~ . of this
.. Court in Suraksha
. Rakshak
. and General Kamgar Union v. M.S.S.l.D.C. and Ors. (Writ
Petition No.2671 of 1992 dated 23rd March, 1993 per
Smt. Sujarat Manohar and S.H. Kapadia, JJ) has
.~ considered and rejected this contention. The Division C
- Bench pointed out that direct employment and coverage
un,~er the Act are anathema to each other. In view. of the
specific provisions in the Security Guards Act under
Section 1(4), the Act would apply to persons who work as
· · Security Guards engaged in any factory or establishment, D
·but are not direct and regular employees of the industrial

...
..,.
.
·establishment. Secondly upon examination of the
provisions of the Scheme the Division -Bench took the
view that the Security Guards Board has the additional
p6wer to allot registered Security Guards to any registered E
employer and also terminate the employment and these
powers would include the power to withdraw allotment to
· ·a given registered employer and re-allot the guard to
another registered employer. The requirement of a
registered employer may vary from time to time and F
commensurately the Board is entitled to adjust the allotment
from time to time. The Division Bench also pointed out
· that both the power of allotment as well as the power of
termination are with the Board and a proper
implementation of the scheme requires that the Board to G
possess. the power to allot Security Guards to such
registered employer a~ it think~ fit and there is nothing in
the scheme to indicate that the allotment once made is
irrevocable or cannot be changed. The fact that when a
Security Guard is on leave the Board has the power to
H
j
,

666 SUPRl;ME COURT REPORiS [2008] 12 S.C.R.

A allot another Security Guard, also indicates that the
+>
·~

allotment of Security Guards is entirely under the control
of the Board and .the Security Guard cannot claim a right
of permanent allotment to any particular registered
employer. In my view looking to the observations and the
B findings made by the :rnvision Bench (supra) the contention
of Mr. Singhvi cannot .be accepted. Under Claus~ 26(8) of '-f
,
the Security Guards Scheme where an employer makes
persistent default of payments of wages and allowances
and levy to the Soard, the Board has the right to suspend
c supply of the Security Guards~ The existence of such a
power of suspension of supply of registered S.ecurity
Guards is a registered employer spells out the existence
of the power of withdrawal of the Security Guards.
' '

24. Mr. Singhvi :then.· contended that the historical
D background of the legislation shows that the Se.curity
y
Guards Act .was ·intended to abolish the agents or
middlemen; to abolish the practice of hire and fire and to ,,....
.....,___
provide better and more secure employment to Security
Guards. According to him, this can only be ensured if the
E principal employer is held to be the employer of the Security
Guards. It is diffiqult to accept the contention as urged by ·
the learned counsel. It may be possible upon analysis of
the detailed provisions of the Security Guards Scheme, to
. postulate that t6rcertain purposes the registered employer
may be held to be the employer of the registered Security
F
Guards, but it is not possible to accept the contention that
. upon allotment of a Security Guard to a registered
,;.._.:
I

,..
emplC?yer, the registered employer should be held to be
the employer of the Security Guard for all purposes.
G In para 55 it was inter..:afia observed as follows:
~
"(a) Writ Petition No.45 of 1991
The findings of the Third Labour Court, Thane, dated 13th
July, 1990 and of the lndustriai Court in its order dated 4th
H December, 1990 taking the view that a complaint under
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v. 667
BHARAT SANCHAR NIGAM LTD. & ORS. [DR. ARIJIT PASAYAT, J.]
1-1-
the Maharashtra Recognition of trade unions and A
Prevention of Unfair Labour Practices Act, 1971 against
the registered employer under the provisions of the Security
Guards Act, 1981 and the Security Guards Scheme, 1981
is not maintainable is hereby quashed and set aside. It is
held that such a complaint on behalf of the Security Guards B
'
~
would be maintainable against the registered employer
)
under the Security Guards Scheme, 1981.
On the merits of the complaint, however, it appears that
the only grievance made was that the Board had no power
to redeploy a Security Guard from the establishment of c
the Second respondent Employer's establishment to any
establishment. The act of the Board in withdrawing the
Security Guards from the establishment of the Second
Respondent Employer and posting them elsewhere was
alleged to be an unfair labour practice and relief was D
"'( claimed there against. On merits, I do not see how any
relief could have been granted. Following the Division
Bench judgment of our High Court, I am of the view that the
Board has full power to withdraw a Security Guard from
the establishment and post him to any establishment of E
another registered employer. Since there was no other
relief prayed for in the complaint the finding of the Courts
below that the complaint was liable to be dismissed even
on merits is correct and liable to be upheld. Hence, there
is no need to remand the complaint for retrial. In the result, F
-
-~---' Writ Petition No.45 of 1991 is hereby dismissed. Rule
discharged with no order as to costs.
(b) Writ Petition No.1409 of 1993.
The order of the Industrial Court dated 15th December,
G
1992 in Complaint (OLP) No.342 of ~1.992 holding that the
complaint was not maintainable and that it had no
jurisdiction to entertain the complaint, is hereby quashed
and set aside. It is held that the complaint is maintainable
and that the Industrial Court has jurisdiction to try the
H
668 .SUPREME COURT REPORTS [2008] 12 S.C.R.

"A complaint. On merits, the learned Judge of the Industrial
Court has held that no unfair labour practice under Item
No.1 (a) of Schedule II of item Nos. 5, 6 and 9 of Schedule
IV of the ULP Act had been proved and dismissed the
complaint. Even the findings appear to be correct. The
petitioner Union had taken the stand that it did not desire
B
to lead any evidence in the complaint, though the
allegations had been denied by the employers.
Consequently, even though I have held that the complaint
is maintainable there being no evidence of unfair labour -
practice, the complaint must fail on merits. Though Mr.
c Singhvi vehemently argued that I may consider remanding
the complaint for re-trial after giving opportunity to the
petition,er Union to lead evide·nce on merits, I decline to
. do so. In the circumstances, it is not possible to accede
to the request of the learned Advocate. This petition also
D fails on merits. Hence, this writ petition is dismissed and
the rule is discharged with no order as to costs.
(C) Writ Petition No.3862 of 1993-
ln this case also the Security Guards were withdrawn from
E one establishment of the second respondent Employer
and re-allotted to another establishment. This act of the
Board was alleged to be an unfair labour practice on the
part of the registered employer and the ~oard. It was also
contended in the complaint that tile Board had no power
whatsoever to withdraw the Security Guards once allotted.
F Following the view of the Division Bench of our High Court,
I am of the view that the Board has such power. The
complaint in this writ petition must therefore fail on merits
and remand would serve no purpose. Consequently, this
petition is also dismissed and the rule is discharged with
G no order as to costs."
19. In this case also Vizagapatnam Dock Labour's case +--
" (supra) was relied upon by the Union. But the High Court held
that it was rendered in respect cif a clifferent Act and Scheme.
This judgment was also not challenged by the appellant-Union.
H

A'I
· KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v 669
BHARAT SANCHAR NIGAM LTD. & ORS. [DR. ARIJIT PASAYAT, J.]

• '--+·
~··
20. It is interesting to note that another· Writ Petition
No.3887/1988 was filed before the Division Bench which was
A

decided on 6.5.1997 and the judgment in W. P. 2671 of 1992
was followed and it was held that the power of allotment included
within it the power to recall, re-allot and transfer and that under
..._,
the entire Act and Scheme would be defeated if the argument B
of direct employment was to be accepted. The conclusions
}
arrived at are as follows:
"16. The second argument that the Board has no power of
withdrawing a Security Guard once allotted is also devoid
of any merit. If the power to withdraw and re-allot is not c
with the Board then formation of pool for the Security
Guards would be rendered meaningless. Taking into
consideration the provisions of the Act and the entire
Scheme as framed under the Act, it indicates .that if the
Board has power to allot a Security Guard available in a D
'( pool, it will have to be held that the Board has a power to
withdraw a Security Guard from one establishment and
~ > allot him to another establishment. We are of the opinion
that considering the Act and the Scheme and to proper
and smooth functioning of the said scheme, it will have to E
be held that the Board has power to wifhdraw a Security
Guard from one establishment and to re-allot him to another
establishment and we must mention at this stage that Shri
Mahanty who was withdrawn on 4th of July 1988 was
immediately re-allotted on 5th of July, 1988. Thus we F
-A conclude that the power of allotment as available with the
Board, carries with it the necessary incidence of power of
withdrawal and re-allotment from the pool.
17. In fact, the same issue was agitated before the Division
Bench of this Gourt in Suraksha Rakshak and General G
Kamgar Union (supra) and the Division Bench while
-J dealing with the argument that under the Scheme once
the Security Guard is allotted by the Board to a registered
employer, the Security Guard becomes permanent allottee
and the Board has no power to withdraw an allotment or H
670 SUPREME COURT REPORTS [2008] 12 S.C.R.

A give a fresh allotment with any other registered employer, -\-' /

•
~
and after considering the Act and the Scheme, has held ;

that the Board has power to withdraw an allotment of a
Security Guard given to a registered employer and re-
allot the Guard to another registered employer. The
B requirements of a registered employer may vary from time ,,,,.
to time and the Board is entitled to adjust the allotment
from time to time. The Division Benc_h in paragraph 6 of 'f
· its judgment has also observed as follows:
1-
"The Scheme, therefore, must be looked at as a whole '
c and proper implementation of the Scheme requires
that the Board has the power to allot security guards
to such registered employer as it thinks suitable.
There is ,nothing in the Scheme to indicate that the
allotment ·once made is irrevocable or cannot be
D changed".
'y
Thus, in our opinion, the issue has been conclusively
answered by the Division Bench in the case of Suraksha
{t
Rakshak and General Kamgar Union (supra) and needs
no further elaboration." f-
E ~
21. Here again, reference was made to Vizagapatnam
Dock Labour's case (supra) and held that there was conceptual
difference between the Act and the Scheme involved in that
case and the case at hand.
F 22. As noted above, four Writ Petitions had been filed
primarily on four grounds. The High Court by the judgment after ~
referring to the earlier judgments held that the power of allotment
,•
clearly included within Jts power to recall, re-a!lot and transfer of .
f
. Security Guards. In.this context, reference was made to Section
G 1(4) of the Act to which earlier also reference had been made
by the Division Bench in noting that its application wa,:, excluded ~
in respect of direct employees and therefore the argument of
direct employment if accepted would depri\1e t;1e Security
Guards of the protection under the Act. Second ground related
H to the stand that on allotment Security Guard becomes a direct
KRANTIKARI SURAKSHA RAKSHAK SANGHATANA v 671
BHARAT SANCHAR NIGAM LTD. & ORS. [DR. ARIJIT PASAYAT, J.]
- ·~

• employee of the principal employer. Here again, after referring
to the judgment of Justice P.B. Sawant and a decision of this
A
•
Court in Security Guards Board v. State of Maharashtra (1987
(3) sec 413) it was held that the provisions for seniority,
promotion and transfer in Clause 16of1981 Scheme would be
rendered ineffective and would cause great harm to guards if 8
~

r they vyere denied the benefits of common pool seniority and
promotion merely because of a fortuitous allotment in the
particular principal employer. The other two grounds related to
Contract Labour (Regulation and Abolition) Act, 1970 (in short
'Contract Labour Act') and the rules framed thereunder. c
23. The High Court referred to an earlier petition filed by
the same appellant namely, Krantikari Suraksha Rakshak
Sangathana v. S. V Naik (1993 (1) CLR 1003) and held that
the Act was a self contained and complete code and unreported
judgment of Justice P.B. Sawant as he then was and Justice D
"(
M.P. Kania dated 15.1.1988 in Writ Petition No.1172 of 1987

..
"
held that the Act is a special statute which not only prevails over
the Contract Labour Act but further that the Act also prevails
because of Article 254 (2) ~of the Constitution.
24. Apart from the fact that in several earlier petitions the E
appellant- Union had unsuccessfully come up with very same
pleas and the orders had attained finality. Issue cannot be
permitted to be indirectly raised in the manner done. The Act
and the schemes make it clear that they apply only to security
-A guards who are "Pool Security Guards". As stated earlier the F
Act and the Scheme clearly constitute a complete and self
contained code which covers private Security Guards. Section
1(4) of the Act and various provisions of 1981 and 2002
Schemes make it clear that the arguments that the guard once
allotted with the principal employer he becomes the direct and G
-1 regular employee of the principal employer is without any
substance. As rightly noted by the High Court the provisions of
the Act and the statute make it clear that the Board's power of
allotment carries with it the implicit and inherent power to recall,
re-allot and transfer a guard from one principal employer to H
672 SUPREME COURT HEPORTS [2008] 12 S.C.R.

A another. It needs no emphasis that the power to appoint carried
with it the inherent power to terminate. Therefore, the power to
allot necessarily carrieswith it the inherent power to re-allot or
cancel the allotmenC It is also seen that both under the 1981
and 2002 Schemes certain clauses provide for transfer of
B guards. It is also significant that under both the Schemes there
is provision for continued supervision, control, disciplinary
powers and powers of termination vested in the Board.
25. As has been rightly contended by learned counsel for
the respondents, Sections 19, 20 and 21 of the Act specifically
· C provide for application of certain Act to Security Guards. In
other words, these specific statutes have application. Other
statutes are dealing with employer and employee· relationship
and the rights thereunder w~ich are made applicable to Security
Guards. To put it differently, only the statutes clearly indicated_
D are applicable to Security Guards. Other statutes are clearly
excluded.
26. Looked at from any angle, the appeals are without
merit, deserve dismissal which we direct. No costs.
E S.K.S. Appeals dismissed.

·~