Date of reserved for judgments: 13.07.2026 Date of pronouncement : 29.07.2026 Date of uploading : 29.07.2026 APHC010347162017 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI WRIT APPEAL Nos: 978 of 2017; 1422 of 2016 & 977 of 2018 Bench Sr.No:- [3584] W.P.No.978 of 2017: M/s. Gurubani Security Pvt. Ltd., Secunderabad and Others ...Appellant(s) Vs. The Oil Natural Gas Corp Ltd, Rajahmundry & Ors. ...Respondent(s) ********** Advocate for Appellants: MR. M A ALEEM MAJID (in WA No.978 of 2017); MR. D.S.SIVADARSHAN (in WA No.1422 of 2016; MR. C.SUMAN (in W.A.No.977 of 2018) Advocate(s) for Respondent(s): MR.V HARI HARAN, MR.T. NIRANJAN, Deputy Solicitor General of India, MRS. M.UMA DEVI, CENTRAL GOVT. COUNSEL; MR. T KOTESWARA RAO; MR. D.S.SIVADARSHAN (IN WA 977 OF 2018) CORAM : THE CHIEF JUSTICE LISA GILL SRI JUSTICE CHALLA GUNARANJAN DATE : 29th July, 2026. 2 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 COMMON JUDGMENT: (per Hon’ble Sri Justice Challa Gunaranjan) All these three writ appeals preferred under Clause 15 of the Letters Patent since assail the order, dated 19.09.2016, in W.P.No.31608 of 2016, the same are heard together and disposed of by this common judgment. 2. W.A.No.1422 of 2016 has been preferred by ONGC Limited (“ONGC”) dissatisfied by the portion of the order to the extent it was directed to pay two times of wages towards compensation for the subject period. W.A.No.977 of 2017 has been preferred by ONGC Krishna Godavari Contract Workers Union (“Union”) to the extent of reducing the compensation from five times of differential wages to two times for the default in payment of wages to its members. W.A.No.978 of 2017 has been preferred by M/s.Gurbani Security Private Limited (“Contractor”), to the extent whereby the payment of compensation of two times of differential wages has been directed to be recovered from it upon discharging the liability by ONGC. 3. Brief facts of the case are as stated below: (a) ONGC by way of service agreement, dated 21.10.2010, entrusted the contract of loss prevention and safety services for its Rajahmundry asset. The duration of contract was from 08.08.2010 3 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 to 07.08.2013. Under the agreement, the Contractor was required to supply trained, experienced and competent personnel for undertaking specified and assigned jobs at various locations. The same also included supply of personnel for the duties of watch and ward, in effect, the Contractor was mandated to supply semi-skilled and skilled personnel for respective positions. The contract also envisaged the commercial terms on account of the wages payable to aforesaid personnel. As per special conditions of contract, the Contractor at its own costs was required to be in compliance with the provisions of the Minimum Wages Act, 1948 (for short, “the M.W. Act”), and the Contract Labour (Regulation and Abolition) Act, 1970, (for short, “the C.L. (R&A) Act”) besides various other Laws relevant on the subject. The contract has also envisaged that in case the Contractor commits any default in timely payment of wages or fails to discharge its obligations emanating from aforesaid enactments, ONGC, as principal employer, would make good the default or breach and shall recover the amounts paid, if any, from the Contractor by deducting in its invoices. (b) A claim petition came to be preferred by about 208 employees working as Security Guards and Security Supervisors through their Union alleging short payment of the minimum wages 4 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 for the period from 01.10.2011 to 31.03.2013, which culminated into enquiry before the Authority under the Minimum Wages Act,1948, Hyderabad (for short, “the Authority”). ONGC, as opposite party No.1, contested the claim on the grounds that the rates of minimum wages prescribed by the State Government would have no application to it as it was governed by the rates those determined by the Central Government, being appropriate Government and further that under the service agreement, any revision of pay over and above agreed under the contract has to be discharged by the Contractor (Opposite Party No.2). The Authority, while negativing the stand pleaded by ONGC, vide order, dated 10.10.2013, directed ONGC to pay the minimum wages as determined therein. (c) Yet again, another complaint came to be made by the remaining Security Guards/Security Supervisors, who were not paid minimum wages for aforesaid period and the same came to be allowed by order, dated 20.01.2014, following the earlier order. ONGC had complied with aforesaid orders. The Union had later come up with another claim for subsequent period i.e., from 01.04.2013 to 07.08.2013. In this application, it has been claimed that as ONGC has paid the revised wages in terms of the earlier orders, it was expected that even for subsequent period, the revised 5 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 wages would be paid, however, there has been deliberate default. That being so, during the pendency of the proceedings, ONGC paid the differential wages. However, the Authority, having found that there was deliberate default in payment of wages, by its order, dated 27.07.2016, awarded compensation of five times of the differential wages and directed ONGC to pay the same. Assailing the same, ONGC preferred W.P.No.31608 of 2016. 4. The learned Single Judge allowed the writ petition in-part by reducing the compensation from five times to two times of differential wages and further, petitioner-ONGC was permitted to recover the said amount from the Contractor. Being dissatisfied with the said order, all the three parties preferred present writ appeals, as mentioned supra. 5. Heard Mr.D.S. Sivadarshan, learned counsel for the ONGC and Mr.C.Sumon, learned counsel for the Union. None appeared for the Contractor. 6. Learned counsel for the ONGC raised the following contentions: (i) Since there is no employer and employee relationship between ONGC and the service personnel deployed to work at its 6 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 Rajahmundry asset through the Contractor, it would not qualify to be an employer within the meaning of Section 20 of the M.W. Act, therefore, the impugned order passed by the Authority directing ONGC to pay compensation is without jurisdiction; (ii) ONGC is liable only to the extent of payment of wages, in the event there is breach at the instance of Contractor, in view of Section 21 of the C.L.(R&A) Act, and that the wages as envisaged under the said provision do not encompass within itself any sort of penalty or compensation; (iii) Claim for minimum wages though is a statutory right guaranteed under the statute, awarding of compensation in terms of Section 20 of the M.W. Act is not automatic and since the same being in the nature of penalty, the Authority ought to have given specific reasons while imposing five times of differential wages as compensation; and (iv) To buttress the contention that there is no employer and employee relationship between the ONGC and service personnel, and the test one should apply to discern whether such relationship exists or not, reliance has been placed on the following judgments: 7 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 (i) Balwant Rai Saluja v. Air India Ltd.1; (ii) International Airport Authority of India v. International Air Cargo Workers Union2; (iii) Hindustan Steelworks Construction Ltd. v. Commissioner of Labour3. (v) With regard to liability of principal employer, qua the compensation under Section 20 of the M.W.Act, learned counsel has placed reliance on the judgment of the Orissa High Court in Industrial Security & Allied Services v. Labour Enforcement Officer (C), Bhubaneswar4. 7. Opposing aforesaid submissions, learned counsel for the Union supported the order of learned Single Judge to the extent of fastening the liability of compensation on ONGC, however, he contended that learned Single Judge ought not to have interfered with the well-reasoned order of the Authority, which determined the compensation of five times of differential wages. He further contended that ONGC had committed default not once, but on multiple times, which is very much evident from the orders, dated 10.10.2013, 20.01.2014 and 27.07.2016 passed by the Authority; in that view of the same, the Authority was absolutely justified in 1 (2014) 9 SCC 407 2 (2009) 13 SCC 374 3 (1996) 10 SCC 599 4 2023 (1) CLR 629 = 2022 (174) FLR 138 (Orissa High Court) 8 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 granting compensation. It is further contended that ONGC has taken a clear stand before the Authority that it is the principal employer and that it did not specifically plead that as a principal employer, its liability merely confines to the payment of minimum wages, but not the compensation in terms of Section 20 of the M.W.Act. 8. We have perused the record and considered the respective submissions made by the learned counsels appearing for the parties. 9. The undisputed facts emanating from the record are that, ONGC, as a principal employer, engaged the services of Contractor for hiring skilled and semi-skilled personnel to work at one of its assets at Rajahmundry. Service agreement, dated 21.10.2010, has been executed between the parties for the period from 08.08.2010 to 07.08.2013. The Contractor paid the wages as per the agreement, however, the workmen have claimed for the higher wages on account of revised wages being notified by the State Government from time to time. Eventually, the workers either by themselves or through the Union approached the Authority raising a dispute. In the first round, the claim came to be allowed vide order, dated 10.10.2013. ONGC has specifically pleaded that it was not 9 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 liable to pay the differential wages as it is not bound by the wages as determined by the State Government, rather, the wages fixed by the Central Government were applicable to it, and further that, at any rate, as per contract, the liability, if any, would be only on the Contractor. The same came to be negatived by the Authority and eventually, as per the directions issued, ONGC has paid the differential wages. Same was the case in second round also. Even after two successive enquiries resulting in liability being fastened on ONGC, as the differential wages were not paid for the subsequent periods, during the third round of proceedings, though ONGC has paid the differential wages after initiation of proceedings, the Authority found that the conduct and the manner in which ONGC conducted itself in paying the wages called for awarding compensation. 10. As could be seen from the records, we also noticed that ONGC has pleaded before the Authority that it is the principal employer and if in case the Contractor does not pay the wages, it would discharge the liability. That apart, it is also to be noted that ONGC has never raised plea that it merely is liable for payment of wages in terms of Section 21(4) of the C.L. (R&A) Act, but not for 10 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 the compensation to be determined under Section 20 of the M.W. Act. 11. Nonetheless, we will proceed to examine whether at all ONGC is liable for compensation in terms of Section 20 of the M.W. Act. 12. The relevant provisions of M.W. Act, and as well as the C.L. (R&A) Act, germane for the present purpose, are extracted hereunder: “(a) M.W. Act: “Section 2(e): Interpretation. In this Act, unless there is anything repugnant in the subject or context,- (e) "employer" means any person who employs, whether directly or through another person, or whether on behalf of himself or any other person, one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, and includes, except in sub-section (3) of section 26,- (i) … (ii) …. (iii) (iv) …” Section 2(h) "wages" means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes house rent allowance but does not include: 11 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 (i) the value of - (a) any house- accommodation, supply of light, water, medical attendance, or (b) any other amenity or any service excluded by general or special order of the appropriate Government; (ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance; (iii) any travelling allowance or the value of any travelling concession; (iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (v) any gratuity payable on discharge; *** Section 20: Claims. (1) ….. (1) ….. (2) Where an employee has any claim of the nature referred to in sub-section (1) the employee himself, or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector, or any person acting with the permission of the Authority appointed under subsection (1), may apply to such Authority for a direction under sub-section (3): …. (3) When any application under sub-section (2) is entertained, the Authority shall hear the applicant and the employer, or give them an opportunity of being heard, and after such further inquiry, if any, as it may consider necessary, may, without prejudice to any other penalty to which the employer may be liable under this Act, direct- (i) in the case of a claim arising out of payment of less than the minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess; (ii) … (4) … 12 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 (5) …. (6) ….” *** (b) C.L. (R&A) Act: Sec.2. Definitions.-(1) In this Act, unless the context otherwise requires,- “2(h) "wages" shall have the meaning assigned to it in clause (vi) of Section 2 of the Payment of Wages Act, 1936 (4 of 1936); 21. Responsibility for payment of wages.- (1) … (2) … (3) … (4) In case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor any contract as a debt payable by the contractor.” 13. Learned counsel appearing for the ONGC mainly contended that it would not fall within the ambit of definition of “employer” in terms of Section 2(e) of the M.W. Act, inasmuch as, the tests, as propounded by the Hon’ble Apex Court in International Airport Authority of India case2, are not met. He tries to emphasise the expression “who employs” in the definition of “employer”, to contend that such employment should be in any of the following forms i.e., 13 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 directly, through another person on behalf of himself, on behalf of any other person, and in present case, none of the scenarios mentioned are attracted. Therefore, the Authority has misconstrued ONGC to be “employer” and thereby fastened liability of compensation, rather, it is the Contractor, who otherwise would be liable for the same. To buttress the aforesaid submissions, heavy reliance has been placed on the judgments of the Hon’ble Apex Court in Balwant Rai Saluja case1 and International Airport Authority of India case2. 14. We would first like to deal with the judgments sought to be relied on by the learned counsel for the ONGC. In Balwant Rai Saluja case1, the Hon’ble Apex Court was dealing with the issue as to whether workers engaged on casual or temporary basis by a contractor to operate and run a statutory canteen, under the provisions of 1948 Act, on the premises of a factory of Air India, can be said to be the workmen of the said factory or corporation. The Hon’ble Apex Court was, therefore, essentially dealing with the scheme of the Industrial Disputes Act, 1948 and the definition of “workmen”. In that context, it has been viewed that workers engaged by a contractor to work in the statutory canteen of a factory would be the workers of the said factory, but, however, only for the 14 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 purpose of the 1948 Act, and not for other purposes, and for other purposes, they need to satisfy the test of employer-employee relationship and it must be shown that the employer exercises absolute and effective control over the said workers. 15. 15. In International Airport Authority case2, the Hon’ble Apex Court was examining the issues emanating from the provisions of C.L (R&A) Act, in particular, whether agreement between the contractor Society and International Airport Authority of India in regard to cargo handling work was sham and nominal and consequently, the workers engaged as contract labour in regard to cargo handling work, were the direct employees of IAAI. In that context, the propounded test of discerning whether there exists employer and employee relationship has been explained more elucidately. In the aforesaid context, while testing scenario of contract for supply of labour, it has been observed that the principal employer only controls and directs the work to be done by contract labour, when such labour is assigned or allotted. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise, therefore, the worker being the employee of contractor, the ultimate subversion and control lies with the Contractor, as he decides where 15 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns the worker to work under the principal employer, the worker works under the supervision and control of principal employer, which is secondary control, but primary control remains with the contractor. 16. These two judgments, which dealt with the provisions of the I.D. Act, 1948 and the C.L.(R&A) Act, in our considered view, would have no bearing on the issues falling for consideration in the present appeals. 17. We have come across the judgment of the Hon’ble Apex Court in Hindustan Sanitaryware and Industries Ltd. v. State of Haryana5, in which the Hon’ble Apex Court had an occasion to consider the definition of the word “employee” in Section 2(i) of the M.W. Act, and in the said context, explained the meaning surrounding the expression “person employed”. In the said case, the notification issued by Government of Haryana revising minimum rates of wages for different scheduled employees came to be challenged. In the said context, dealing with an argument that concept of principal employer and contractor is foreign to M.W. Act and occupier/ principal employer cannot be made responsible for 5 (2019) 15 SCC 774 16 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 payment of minimum rate of wages to a contract labour, negativing the said contention, it has been held as follows: “15. The word “employee” as defined in the Act means any person who is employed for hire or reward in a scheduled employment. There is no distinction made between a person employed by the principal employer and a person employed through a contractor. Any person who employs, whether directly or through any other person, one or more employees in a scheduled employment falls within the definition of an “employer”. [ Section 2(e), Minimum Wages Act, 1948.] A close scrutiny of the definitions of the employer and the employee would bring the workmen employed through the contractors within the purview of the Act. We reject the submission made on behalf of the appellants that the contract workmen are not covered under the Act.” 18. Even in the present case, ONGC precisely has raised the very same contention that the provisions of the M.W. Act do not envisage the concept of principal employer, rather, such concept is discernible only under the provisions of the C.L. (R&A) Act. When once the Hon’ble Apex Court had emphatically laid down that there is no distinction made between a person employed by a principal employer and a person employed through a contractor, the principal employer, as a corollary, would not only be liable for the payment of the wages, but also the compensation as may be determined under Section 20 of the M.W. Act. It is axiomatic that if one accepts the 17 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 liability of wages under the provisions of M.W. Act, equally will be liable for compensation too. It is somewhat odd for one to say the expression employer, meaning any person who employs, partakes within it the principal employer for the purpose of wages and not compensation. 19. In the judgment of the Hon’ble Apex Court in Hindustan Steelworkers Construction Ltd. case3, relied on by the learned counsel for the ONGC, it was dealing with an issue as to whether principal employer is liable to pay to the contract workers any amount which constitutes the difference between the wages payable to the contract labourer by the contractor and wages paid by the principal employer to its own employees doing similar work. Interpreting Section 21(4) of the C.L. (R&A) Act r/w. definition of wages in Section 2(vi) of the Payment of Wages Act, it has been held that, the liability of principal employer can be confined only to the extent of default committed by the contractor in regard to payment of contractual wages and that any other amounts, which otherwise do not qualify to fall within the definition of wages, cannot be imposed on the principal employer. Since ONGC itself has accepted that it is liable for payment of differential wages being principal employer, this judgment would not help it in any way. 18 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 20. In Industrial Security and Allied Services case4, the Orissa High Court dealt with the liability of payment of differential minimum wages qua the principal employer. The said judgment did not consider the issue regarding the liability of compensation qua the principal employer under the provisions of the M. W. Act. In the facts and circumstances of that particular case, based on the tender call notice conditions, it was held that the liability to pay differential minimum wages was on the service providing contractor, but not the principal employer. Inasmuch as in the present case, ONGC itself has taken upon itself the liability to pay the differential minimum wages and since the same is not subject matter of challenge in the present proceedings, the said judgment also does not in any way come up to the aid of ONGC. 21. ONGC at one breath has conceded that it is liable to pay the differential wages and at another breath, disputed the liability towards compensation. The said stand is sought to be justified with reference to Section 21(4) of the C.L. (R&A) Act. Both these legislations i.e., M.W. Act and C.L. (R&A) Act, being beneficial legislations aiming to protect the interests of workmen, and that the definition of “wages” under both these enactments being one and the same, there is no reason for us to accede to the contention of 19 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 the ONGC that being a principal employer, it is merely responsible or liable for the minimum wages and not for any other consequences, in particular, the compensation component. We, therefore, are of the view that ONGC as a principal employer is not only liable for payment of wages, but also the compensation as well. 22. Now coming to the aspect of determining the compensation, learned counsel for ONGC contended that there are no reasons assigned by the Authority for justifying determination of compensation of five times of differential wages and the learned Single Judge being oblivious to the same, merely reduced the compensation to two times of differential wages, rather than setting aside in entirety. 23. On the other hand, learned counsel for the Union contended that the Authority had rightly determined the compensation of five times, but, learned Single Judge reduced the same to two times, for no reason, therefore, urged to restore the order of the Authority. 24. On the aforesaid aspect, learned Single Judge, after referring to the judgment of the Hon’ble Apex Court in Prerna Sahygo v. Authority under Minimum Wages6, and further considering the facts and circumstances of the case, in particular, that ONGC earlier 6 (2001) 9 SCC 247 20 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 also defaulted in making the payment of wages for the period from 01.10.2011 to 31.03.2013, on two occasions and further defaulted again for the period from 01.04.2013 to 07.08.2013, decided to reduce the compensation and ordered to pay the same by two times of the differential wages. In fact, the order also goes to show that ONGC had pleaded that one-time compensation to be ordered considering the judgment of the Hon’ble Apex Court in Prerna Sahygo case6. 25. For the purpose of determining the compensation, the authority is required to satisfy itself that the employer was indulging in malicious and vexatious acts. If the employer’s acts are distressing, the authority will be well justified in imposing compensation. In the present case, as can be seen from the order, dated 10.10.2013, though ONGC had initially tried to contest the liability of payment of differential wages, the same came to be rejected, and eventually, it had paid the amounts as directed. In the said order, it is also recorded that ONGC had submitted that fair wage policy is going to be implemented soon inasmuch as the same has already been implemented in the western section of ONGC after a Memorandum of Settlement under Section 12(2) of the I.D. Act, and the same too is being contemplated even at the 21 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 Rajahmundry asset. In those circumstances, the Authority decided not to impose any compensation for delayed payment of minimum wages. Despite the same, there was another default which culminated into second round of proceedings followed by order, dated 20.01.2014, and a further proceeding culminating into order, dated 27.07.2016. ONGC had been consistently in default of payment of differential wages. Therefore, the authority did arrive the satisfaction for the purpose of imposing compensation. 26. Learned Single Judge, while reducing the compensation, directed ONGC to pay the same, in turn, permitted it to recover the same from the Contractor. As could be seen from the terms of the service agreement, it is agreed between the parties therein that any liability per se over and above what has been agreed under the contract shall have to be borne by the Contractor alone. Therefore, learned Single Judge rightly has permitted the ONGC to recover the same from the Contractor. The learned Single Judge, after considering all the aforesaid aspects, has rightly determined the compensation of two times of differential wages, which is absolutely justified and does not call for any interference. 22 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 27. For the foregoing reasons, we do not find any merit in these appeals, and accordingly, the same stand dismissed. No order as to costs. As a sequel, miscellaneous petitions pending consideration, if any, in these appeals shall stand closed. LISA GILL, CJ CHALLA GUNARANJAN, J. cs