SRINAGAR: The High Court of Jammu Kashmir and Ladakh has held AFCON Infrastructure Limited responsible for the ultimate financial liability arising from revised minimum wages, overtime and related wage dues of security personnel deployed at its Jammu-Udhampur project.
Justice Sanjay Parihar said a contractual arrangement making a security agency responsible for disbursing wages could not, by itself, exclude the statutory obligations of the principal employer under labour welfare laws.
The judgment came while deciding two connected writ petitions concerning wage claims of security guards engaged through M/s Parmar Security and Placement Services and deployed at AFCON’s project site.
In OWP No. 698/2014, the security agency had challenged a March 27, 2014 award under the Minimum Wages Act, 1948, directing it to pay differential wages and compensation amounting to Rs 15,42,532 to 336 workmen, besides Rs 3,19,261 towards wages for weekly rest days and overtime-related dues.
In OWP No. 2126/2017, AFCON had challenged an October 31, 2017 award under which liability for overtime wages and compensation payable to security guards had been fastened jointly on AFCON and the agency.
The court held that the security personnel were legally entitled to the minimum wages notified by the appropriate government and to overtime wages for work performed beyond prescribed working hours.
It said the central issue was not the workers’ entitlement but which of the two entities should ultimately bear the financial burden arising from the statutory wage obligations.
Justice Parihar observed that although the agency was contractually responsible for disbursing wages, the agreements had to be read alongside the Minimum Wages Act, the Payment of Wages Act, 1936, and the Contract Labour (Regulation and Abolition) Act, 1970.
The court particularly referred to Section 21 of the Contract Labour (Regulation and Abolition) Act, under which the contractor has the initial responsibility for wage payment, while the principal employer has a statutory role in the wage-disbursement process and may be required to make payment in cases of failure or short payment by the contractor, with a corresponding right of recovery.
The court found that the security personnel supplied by the agency worked exclusively at AFCON’s project site and that their attendance, deployment, shifts and operational utilisation were substantially controlled by AFCON.
The contractual arrangement also provided for wage disbursement in the presence of AFCON’s representative and submission of wage-cum-muster records to its personnel department for certification, the court noted.
The judgment further pointed to a work order dated September 1, 2011, which stipulated that security personnel were not to work beyond eight hours and prescribed rates for an eight-hour shift.
“Overtime remuneration” formed part of the statutory wage liability, the court held, adding that where additional work was extracted in connection with the principal employer’s project, the latter could not completely disassociate itself from the resulting financial consequences.
The court also took note of AFCON having settled the claims of 91 out of 100 similarly placed workmen in the proceedings that culminated in the October 31, 2017 award.
It held that AFCON could not adopt a different position towards the remaining nine workers merely because they had pursued adjudication rather than settlement, observing that the source and nature of their claims were the same.
Award of 2014 set aside, matter remanded
Regarding OWP No. 698/2014, the court set aside the March 27, 2014 award because AFCON, which the court held to be a necessary party in the claim proceedings, had not been impleaded before the authority.
The matter was remanded to the competent authority with directions to implead AFCON as a party and reconsider the claims afresh in accordance with law.
The court directed that AFCON be given an opportunity to file its pleadings and that the authority pass fresh orders after hearing the parties.
The amount deposited before the High Court Registry was ordered to be remitted to the authority concerned, which would keep it in a fixed deposit earning interest, renewable at regular intervals, pending fresh consideration of the claims.
AFCON directed to satisfy 2017 award
As regards OWP No. 2126/2017, the High Court found no ground to interfere with the October 31, 2017 award insofar as the claims were concerned.
However, it modified the award to the extent that liability had been fastened on the security agency.
The court directed that the October 31, 2017 award be satisfied by AFCON in its entirety.
The 13-page judgment was reserved on August 4 and pronounced on October 5, 2026.
