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Judgment
The Honourable Mr. Justice K. Chandru
W.P.Nos. 45539 of 2006 and 24581 of 2007 :
Both writ petitions were directed against an Award passed by the Central Government Industrial Tribunal-cum-Labour Court (for short CGIT)
in I.D.No. 420 of 2004, dated 04.01.2006. While W.P.No. 45539 of 2006 was filed by the Food Corporation of India (for short FCI)
represented by its Executive Director (South Zone), W.P.No. 24581 of 2007 was filed by the FCI Departmental Canteen Committee represented
by its President. While the first writ petition was admitted on 27.11.2006, the second writ petition was admitted on 20.7.2007. Pending the writ
petition, in the first writ petition, an interim stay was granted on 27.11.2006 with a condition that the petitioner deposit the difference in emoluments
which the worker will get if he is made permanent, to the credit of the industrial dispute. Subsequently, the interim order was made absolute on
5.6.2007 after noting that a sum of Rs. 5,09,421/- was deposited in respect of I.D.No. 420 of 2004. The CGIT was directed to deposit the said a
amount in the State Bank of India in a fixed deposit initially for a period of six months and thereafter to renew the same until further orders.
At the initiative of the workman K.S.Arumugam, the Central Government had referred the following dispute vide order dated 04.10.2004 for
adjudication by the CGIT, which reads as follows :
Whether the action of the management of Food Corporation of India, Zonal Office, Chennai and FCI Departmental Canteen Committee, Zonal
Office, Chennai in nor regularising the services of Sri K.S.Arumugam, Bearer of FCI departmental Canteen, Zonal Office, Chennai is legal and
justified? If not, to what relief the workman is entitled?
The dispute was taken on file as I.D.No. 420 of 2004. On behalf of the workmen, he had examined himself as W.W.1. On his side, one
S.Parvathy, a retired Assistant Manager (Accounts) was examined as W.W.2. On the side of the petitioner management FCI, one T.Krishnaveni,
Assistant Manager (General) was examined as M.W.1. On the side of the workman, 10 documents were filed and marked as Exs.W.1 to W.10.
The Tribunal on an analyse of the evidence placed before it came to the conclusion that the demand of the workman was justified and he was
entitled for regularization of his services with all monetary benefits and continuity of service. It is against this, the two writ petitions came to be filed
as noted already.
W.P.Nos. 45540 of 2006 and 24580 of 2007 :
These two writ petitions were directed against an Award passed by the Central Government Industrial Tribunal-cum-Labour Court (for short
CGIT) in I.D.No. 424 of 2004, dated 04.01.2006.
While W.P.No. 45540 of 2006 was filed by the Food Corporation of India (for short FCI) represented by its Executive Director (South Zone),
W.P.No. 24580 of 2007 was filed by the FCI Departmental Canteen Committee represented by its President. While the first writ petition was
admitted on 27.11.2006, the second writ petition was admitted on 20.7.2007. Pending the writ petition, in the first writ petition, an interim stay
was granted on 27.11.2006 with a condition that the petitioner deposit the difference in emoluments which the worker will get if she is made
permanent, to the credit of the industrial dispute. Subsequently, the interim order was made absolute on 5.6.2007 after noting that a sum of Rs.
5,58,687/- was deposited in respect of I.D.No. 424 of 2004. The CGIT was directed to deposit the said a amount in the State Bank of India in a
fixed deposit initially for a period of six months and thereafter to renew the same until further ordeRs.
At the initiative of the workman Ms.N.Bakkiavathi, the Central Government had referred the following dispute vide order dated 03.11.2004 for
adjudication by the CGIT, which reads as follows :
Whether the action of the management of Food Corporation of India, Zonal Office, Chennai and FCI Departmental Canteen Committee, Zonal
Office, Chennai in nor regularising the services of Smt.N.Bakkiavathi, Sweeper of FCI departmental Canteen, Zonal Office, Chennai is legal and
justified? If not, to what relief the workman is entitled?
The dispute was taken on file as I.D.No. 424 of 2004. On behalf of the workmen, she had examined himself as W.W.1. On her side, one
S.Parvathy, a retired Assistant Manager (Accounts) was examined as W.W.2. On the side of the petitioner management FCI, one T.Krishnaveni,
Assistant Manager (General) was examined as M.W.1. On the side of the workman, 10 documents were filed and marked as Exs.W.1 to W.10.
The Tribunal on an analyse of the evidence placed before it came to the conclusion that the demand of the workman was justified and she was
entitled for regularization of her services with all monetary benefits and continuity of service. It is against this, the two writ petitions came to be filed
as noted already.
In view of the interconnectivity between these writ petitions, they were grouped together and a common order is passed.
As the petitioners have not filed all the documents made available before the CGIT, the Registry was directed to summon the original records
from the CGIT. Accordingly, they were summoned and circulated for perusal by this court.
Mr. P.D. Adikesavalu, learned counsel for the FCI supported by Mr.V.Srikanth, learned counsel appearing for the Departmental Canteen
Committee contended that the canteen run by the FCI cannot be treated as a wing of the FCI and the workmen cannot get any relief against the
FCI. The canteen is provided only as a welfare measure and the employees in the canteen are not employees of the FCI. In this context, he
referred to a judgment of the Supreme Court in State of Karnataka and Others Vs. KGSD Canteen Employees Welfare Association and Others,
and in paragraphs 44 and 49, it was observed as follows :
44.The question which now arises for consideration is as to whether the High Court was justified in directing regularisation of the services of the
respondents. It was evidently not. In a large number of decisions, this Court has categorically held that it is not open to a High Court to exercise its
discretion under Article 226 of the Constitution either to frame a scheme by itself or to direct the State to frame a scheme for regularising the
services of ad hoc employees or daily-wage employees who had not been appointed in terms of the extant service rules framed either under a
statute or under the proviso to Article 309 of the Constitution. Such a scheme, even if framed by the State, would not meet the requirements of law
as the executive order made under Article 162 of the Constitution cannot prevail over a statute or statutory rules framed under the proviso to
Article 309 thereof. The State is obligated to make appointments only in fulfilment of its constitutional obligation as laid down in Articles 14, 15 and
16 of the Constitution and not by way of any regularisation scheme. In our constitutional scheme, all eligible persons similarly situated must be given
opportunity to apply for and receive considerations for appointments at the hands of the authorities of the State. Denial of such a claim by some
officers of the State time and again had been deprecated by this Court. In any view, in our democratic polity, an authority howsoever high it may
be cannot act in breach of an existing statute or the rules which hold the field.
49.The High Court was, thus, not correct in holding that the members of the first respondent could be treated on a par with the Hospitality
Organisation of the State of Karnataka. Such equation is impermissible in law. In the Hospitality Organisation of the State, the posts might have
been sanctioned. Only because food is prepared and served, the same would not mean that a canteen run by a Committee can be equated thereto.
Secondly, he contended that since employees are casual employees and were appointed not through any recruitment rules, they are not eligible
for any regularization and that the Tribunal_s order regularizing them was not justified. In this context, he had referred to a judgment of the
Supreme Court in Indian Drugs and Pharmaceuticals Ltd. Vs. Workman, Indian Drugs and Pharmaceuticals Ltd., and in paragraph 47, it was
observed as follows :
47.We are of the opinion that if the court/tribunal directs that a daily-rated or ad hoc or casual employee should be continued in service till the date
of superannuation, it is impliedly regularising such an employee, which cannot be done as held by this Court in Secy., State of Karnataka v.
Umadevi (3)8 and other decisions of this Court.
But, however a perusal of the materials placed before the CGIT showed that the establishment of the canteen in the office of the FCI was
governed by a circular issued by the FCI marked as Ex.W.9 in both the industrial disputes. The said circular contemplated the formation of the
canteen committee nominated by the FCI consisting of employees and officers appointed by the FCI. While the Canteen Managing Committee is
given power of appointment of staff for the canteen, their pay and allowances and the strength of the employees were to be governed by the
departmental Canteen circular issued by the Ministry of Home Affairs and it should not exceed without the approval of the FCI. The canteen can
be wound up only under the orders of the FCI. The capital for running the canteen is given by the FCI. The entire expenditure to an extent of 90%
is met by the FCI and 10% is borne out from the profit made from the canteen.
In terms of the classification of the canteen, it is stated that if employees in the FCI offices having the strength of 500 to 699, it will be called as
Canteen _B_ Type and offices having employees of more than 250 to 499, that canteen will be called as _C_ type canteen. The wages to be paid
to maintain the staff were also fixed by the said circular. The workmen were also given identity cards by the FCI. It was admitted by the
respondent that K.S.Arumugam, the workman in I.D.No. 420 of 2004 was employed as a bearer from the year 1992 and the workman
Smt.Bakkiavathy was employed as a Cleaner (Sweeper) from the year 1986 in the canteen without any break. As per the evidence of M.W.1,
Krishnaveni, in the canteen, there were 14 employees, out of which 12 of them were getting time scale of pay. The employees of the canteen are
also eligible to become the members of the FCI Cooperative Credit and Thrift Society. Though the prices of food items are fixed by the
committee, such decision is not binding on the FCI. The Canteen Managing Committee cannot obtain loan for running the canteen. The canteen
committee was nominated by the FCI. The Zonal Manager of the FCI has power to nominate the membeRs. The Canteen Managing Committee
by its proposal dated 20.7.2000 marked as Ex.W.1 had recommended regularization of the two workmen Arumugam and Bakkiavathi. A
reminder was also sent by Ex.W.2. If it is _B_ type canteen, then the total sanctioned post is 15, but actually there are only 12 workers who were
running the canteen. This fact was brought to the notice of the Executive Director (South Zone) by the Deputy Zonal Manager vide letter dated
7.3.2002. That letter was marked as Ex.W.5. The stand taken by the FCI was that since the staff strength of the zonal office came down due to
death and voluntary retirement, the canteen was reclassified as _C_ type canteen. The _C_ type canteen only requires 10 workeRs. This fact was
also brought to the notice by Ex.W.5. But Ex.W.5 was dated 7.3.2002. Even before Ex.W.5 was written, the two workmen were working from
1986 and 1992 as noted already and they put more than 10 years and 6 years of services respectively. Therefore, it cannot be contended that the
workmen cannot be regularized in view of the changed status of the canteen category.
In the light of the above, it has to be seen whether the impugned Award of the Tribunal is legally sustainable? The first question to be answered
is whether the employees of the canteen can be said to be employees of the FCI.
The Supreme Court while confirming the order of the division bench of this court in holding that employees of the canteen run by the Indian
Overseas Bank as employees of the Bank upheld the decision of the Tribunal confirmed by the division bench, vide judgment in Indian Overseas
Bank Vs. I.O.B. Staff Canteen Workers'' Union and Another, It is necessary to refer to the following passages found in paragraphs 8,10 and 21
which is as follows :
8...... In paras 6 to 9 of their judgment, the learned Judges of the Division Bench analysed the factual position recorded by the Tribunal, while
pointing out the infirmities in the approach as well as the impermissibility of the exercise undertaken by the learned Single Judge by observing as
follows:
It is therefore our difficult task to go through facts of the present case and come to a conclusion one way or the other. The first aspect of the
case is that even here, there is no statutory obligation on the part of the Bank to provide canteen facilities to its employees. But the question is
whether there is any legal obligation implicit or explicit, as pointed out in LIC case. Before the Tribunal, the following aspects were emphasised by
the canteen employees:
(i) three promoters were appointed from among the permanent employees of the Bank for a period of one year;
(ii) at the end of one year, another committee was nominated by the Bank. The promoters were looking after the day-to-day supervision of the
canteen apart from doing their regular work as bank employees;
(iii) the management had taken upon itself the responsibility of providing canteen facilities to the employees under a subsidised scheme;
(iv) the Bank provided the basic requirements like building, utensils, crockery, cutlery and furniture etc.;
(v) the Bank was giving subsidy for meeting the salary of the canteen employees and were increasing the same from time to time;
(vi) supply of foodstuffs at concessional rate was also done by the Bank;
(vii) the cost of fuel, electricity and water supply charges apart from providing refrigerators and water coolers were also met by the Bank; and
(viii) in effect, the canteen was run out of the funds of the Bank. As against the above, the Bank contended
(i) that there was no employer-employee relationship;
(ii) it was only at the request of the union that the Bank agreed to provide a canteen;
(iii) the Bank had no say in choosing the members of the Committee; and
(iv) the canteen is not for the exclusive use of the Bank.
In evidence, one other important fact was brought out, viz., that the canteen workers were employed under a Welfare Fund Scheme of the
Bank. They are made eligible for periodical medical check-up by the doctors of the Bank. On the above rival submissions and evidence, the
Tribunal came to the following conclusions:
(i) that the canteen is run in the premises of the Bank;
(ii) the canteen is for the exclusive use of the Bank staff;
(iii) the Bank provided the infrastructural facilities;
(iv) the Managing Committee did not contribute anything towards the capital or the expenses for running the canteen;
(v) the Bank gave subsidies to subsidise the purchase of food articles; and
(vi) the Bank provided cycles and tricycles to the canteen for the supply of foodstuffs.
Consequently, the Tribunal came to the conclusion that the thirty-three employees have to be treated as workmen of the Bank and should be given
the same status and facilities as are available to the Class IV employees of the Bank. The Tribunal also held that the closure of the canteen when
the dispute was pending was illegal.
The question is whether in view of such categorical findings of fact arrived at by the Tribunal, the learned Single Judge exercising jurisdiction
under Article 226 of the Constitution of India could reappreciate the evidence and come to a different conclusion. We have already pointed out
that the learned Single Judge had erred in appreciating certain documents and the evidence in the case. We are clearly of the opinion that the
learned Single Judge had no material to characterise the judgment of the Tribunal as perverse. We will once again refer to certain important matters
which would go a long way to decide the matter. The inference drawn from Ex.M-1 that it was the Union, who wanted the canteen is far from
truth. The subsequent evidence has got to be looked into on this aspect of the case. In Ex.M-4, dated 23-4-1988, the Union has informed the
Bank about the new canteen promoters for the record of the Bank. The inference drawn by the learned Judge from Ex.M-5 that the canteen was
not exclusive for the Bank is based on a misconception. The evidence of MW 1 clearly shows that the canteen is meant only for the Bank. His
evidence is as follows:
... The canteen is meant only for the staff of the Bank and the canteen will remain closed only on bank holidays...
The observation that the Bank was running the canteen to retain good relationship between the union and the management is not appropriate and
on the other hand, it only shows that the Bank was implicitly bound to maintain the canteen. The learned Single Judge has not given due weight to
the two principles enunciated in LIC case and undisturbed by RBI case. We have already quoted those principles.
One other significant fact which has escaped the attention of the learned Single Judge is the letter written by the Central Office of the Bank when
the promoters expressed their inability to run the canteen with effect from 26-4-1990. Says the management as follows:
Member of staff are advised that the canteen will function in our canteen block with effect from 21-10-1992. The contractors will run the canteen
with minimum staff for a week on a trial basis to overcome the difficulties if any. The canteen will run normally after a week or so...._
The Bank further says that the canteen is for the welfare of the staff and directs as follows:
All members are requested to avail this facility and refrain from going out for coffee and tea. Since the canteen has started functioning the
Department Heads should inform all the staff members to restrict their lunch time to half an hour between 12.30 and 3.00 p.m. and the staff may be
permitted to go for lunch in fixed time to avoid heavy rush at the canteen...
The above passage quoted from the letter of the Central Office of the Bank amply establishes that the Bank had an obligation to run the canteen
and in fact, was running the canteen, through contractors, even though the promoters had withdrawn their services. Actually, it appears that the
promoters were desirous of forming a cooperative society and it did not fructify. In this view of the matter, it is clear that as in LIC case, the Bank
had been running the canteen by one or other of the agency.
10.P.B. Sawant, J., who authored the decision in M.M.R. Khan case1 has once again spoken for another Bench of himself and Majmudar, J., in
the decision reported in Parimal Chandra Raha v. LIC of India2 (for short _LIC case_) and after review of the case-law on the subject, culled out
the principles emanating from them as hereunder: (SCC p. 628, para 25)
What emerges from the statute law and the judicial decisions is as follows:
(i) Whereas under the provisions of the Factories Act, it is statutorily obligatory on the employer to provide and maintain canteen for the use of his
employees, the canteen becomes a part of the establishment and, therefore, the workers employed in such canteen are the employees of the
Management.
(ii) Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer to provide a canteen, the
canteen becomes a part of the establishment and the workers working in the canteen, the employees of the Management. The obligation to provide
a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not
become a part of the establishment.
(iii) The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicitly accepted by or cast upon the employer
either by an agreement or an award, etc., it may be inferred from the circumstances, and the provision of the canteen may be held to have become
a part of the service conditions of the employees. Whether the provision for canteen services has become a part of the service conditions or not, is
a question of fact to be determined on the facts and circumstances in each case.
Where to provide canteen services has become a part of the service conditions of the employees, the canteen becomes a part of the establishment
and the workers in such canteen become the employees of the Management.
(iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among
others, on the nature of the service/facility, the contribution the service in question makes to the efficiency of the employees and the establishment,
whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the number of employees
employed in the establishment and the number of employees who avail of the service, the length of time for which the service has been continuously
available, the hours during which it is available, the nature and character of Management, the interest taken by the employer in providing,
maintaining, supervising and controlling the service, the contribution made by the Management in the form of infrastructure and funds for making the
service available etc._
21.The learned Single Judge seems to have not only overlooked certain relevant material but by adopting a negative approach had belittled the
relevance and importance of several vital and important factual aspects brought on record. If on the facts proved, the findings recorded by the
Tribunal are justified and could not be considered to be based upon _no evidence_, there is no justification for the High Court in exercising writ
jurisdiction to interfere with the same. The promoters of the canteen being permanent employees in the service of the Bank, were permitted to run
the canteen, by merely being in control of the day-to-day affairs of the canteen, the Bank cannot be absolved of its liabilities when it was really
using the canteen management as its instrumentality and agent. The cloak apart, the _voice definitely is that of Jacobs_. Consequently, we could
neither find any error of law or other vitiating circumstances in the judgment of the Division Bench nor any infirmities in the process of reasoning or
gross unreasonableness and absurdities in the conclusions arrived at to restore the award, so as to justify and warrant our interference in the
matter.
16.A similar view was taken by the Supreme Court that the employees of the canteen run by the University as it is fully funded by the University
and is functioning under the control of the university are also employees of the university vide judgment in G.B. Pant University of Agriculture and
Technology, Pantnagar, Nainital Vs. State of Uttar Pradesh and Others, and in paragraphs 3,4,5,9 and 10, it was observed as follows :
3.There cannot possibly be any doubt that the socialistic concept of society as laid down in Parts III and IV of the Constitution ought to be
implemented in the true spirit of the Constitution. Decisions are there of this Court galore wherein this Court on more occasion than one stated that
democratic socialism aims to end poverty, ignorance, disease and inequality of opportunity. In D.S. Nakara case2 as also lately in Secy., HSEB v.
Suresh3 the same has been well pronounced and we need not dilate on that score any further.
Mr Trivedi, the learned Additional Solicitor General appearing in support of the appeals rather strongly contended that the High Court has
totally misconstrued the Regulations framed under the statute pertaining to hostel and cafeteria (Hostel and Cafeteria Regulations under the U.P.
Agricultural University Act, 1958) and rather after a longish narration of the Regulations contended that it is not the University which has any
control over the employees of the cafeteria but the Food Committee which has specific role in the matter of management and control of the
cafeteria and since there exists no evidence whatsoever on record that the employees working in the cafeteria were appointed by the University in
accordance with the provisions contained in the Act or the statute framed thereunder, question of there being any master-servant relationship
would not arise. It is in this context also it has been contended by Mr Additional Solicitor that there is no budgetary allocation provided in the
University budget to meet the expenses on account of the salaries of the cafeteria employees and as such, question of the cafeteria employees
being termed to be the employees of the University would not arise. Strong reliance was placed on the decision of this Court in All India Rly.
Institute Employees'' Assn. v. Union of India4 wherein this Court observed: (SCC p. 549, paras 12-13)
By their very nature further the services of the institutes/clubs are availed of beyond working hours only. It is common knowledge that not all
members of the railway staff avail of them. One has to be a member to do so by paying fees. The membership is also optional. That is why most of
the staff employed in the institutes/clubs is part-time. As has been stated by the respondents, out of about 1741 employees engaged in 499
institutes and 332 clubs nearly half are part-time employees. The services rendered by the employees are not of a uniform nature. They are
engaged for different services with different service conditions according to the requirement. The institutes/clubs further do not engage in uniform
activities, the activities conducted by them varying depending upon the infrastructure and the facilities available at the respective places.
What is more important as far as the issue involved in this petition is concerned, is that the provision of the institutes/clubs is not mandatory.
They are established as a part of the welfare measure for the railway staff and the kind of activities they conduct depend, among other things, on
the funds available to them. The activities have to be tailored to the budgets since by their very nature the funds are not only limited but keep on
fluctuating. If the costs of the activities go beyond the means, they have to be curtailed. So also, while starting a new activity, it is necessary to take
into account its financial implications and the capacity of the institute/club to raise the necessary funds. The only varying component of the funds is
the membership fee which is uncertain.
The facts of the matter under consideration are rather a pointer to the material difference between the canteens run in the railways establishment
and that of the railway institute and clubs. This Court on a very poignant note observed that canteen services are no longer looked upon as a mere
welfare activity but as an essential requirement where sizeable number of employees work. This Court went on to record that the same however,
cannot be said to be of institutes and clubs.
9.The detailed analysis as above has been introduced in this judgment so as to exhibit the control of the University in the matter of running of the
cafeteria. As noticed above, a residential university having a canteen facility and the inmates of the hostel not being permitted to have food from
outside cannot possibly be said to be a mere welfare service to the students. It is a requirement of the Regulations framed under the Act and thus
having statutory sanction and force _ the issue thus comes up for consideration as to whether it is a mere ancillary benefit conferred on to the
inmates of the hostel or an essential requirement. The Regulations pertaining to the hostel accommodation and the supplies of food do not warrant
any other conclusion than to treat it as an essential requirement so far as the inmates of the hostel are concerned. The involvement of the Vice-
Chancellor, the Warden and the Food Managers who admittedly all belong to the University as employees thereof cannot negate the cry of the
labour force asking for a parity in their scale of pay. Regularisation will undoubtedly bring forth a parity with the other employees of the University.
The requirement of the number of employees also cannot be brushed aside. More than 175 employees are required for the purpose of providing
food to the inmates of the hostels _ there are altogether 14 hostels and the inmates have to depend on the cafeteria for their food service since
nobody else can, as a matter of fact, avoid (sic provide) the needs of the cafeteria _ it is a requirement of the Regulation.
10.Admittedly, cafeteria employees need succour for livelihood _ would they continue to remain half-fed and half-clad as long as they live _ is this
the society that we feel proud of? Is this the guarantee provided by the founding fathers of our Constitution or is this the concept of socialism which
they conceived? None of the answers can possibly be in the affirmative. The situation is rather awesome and deplorable _ the University by
compulsion directs students to be residents of the hostel with a definite ban on having food from outside agencies excepting under special
circumstances and the provider of food, namely the staff of the cafeteria ought not to be treated as an employee of the University _ whose
employees are they if we may ask and we think it would not be impertinent on our part to ask the same _ is it the consumer of food? Since when
the consumer of food becomes the employer? These are the questions which remain unanswered. The society shall have to thrive. The society shall
have to prosper and this prosperity can only come in the event of there being a wider vision for total social good and benefit. It is not bestowing
any favour on anybody but it is a mandatory obligation to see that the society thrives. The deprivation of the weaker section we had for long but
time has now come to cry a halt and it is for the law courts to rise up to the occasion and grant relief to a seeker of a just cause and just grievance.
Economic justice is not mere legal jargon but in the new millennium, it is the obligation for all to confer this economic justice on a seeker. Society is
to remain, social justice is the order and economic justice is the rule of the day. A narrow pedantic approach to statutory documents no longer
survives. The principle of corporate jurisprudence is now being imbibed on to industrial jurisprudence and there is a long catena of cases in regard
thereto _ the law thus is not in a state of fluidity since the situation is more or less settled. As regards interpretation, widest possible amplitude shall
have to be offered in the matter of interpretation of statutory documents under industrial jurisprudence. The draconian concept is no longer
available. Justice _ social and economic, as noticed above ought to be made available with utmost expedition so that the socialistic pattern of the
society as dreamt of by the founding fathers can thrive and have its foundation so that the future generations do not live in the dark and cry for
social and economic justice.
The judgment in G.B.Pant University_s case (cited supra) came to be referred to in a subsequent judgment in National Thermal Power
Corporation Ltd. Vs. Karri Pothuraju and Others, and that view was upheld and in paragraphs 6 and 7, it was held as follows :
6.We have carefully considered the submissions of the learned counsel appearing on either side. In Saraspur Mills5 this Court held that where
there is a statutory liability on the company concerned to run a canteen in the factory, then even though the canteen was run by a cooperative
society, the employees working in the canteen would be covered by the definition of the word _employed_ envisaged in Section 3(13) of the
Bombay Industrial Relations Act. In VST Industries4 dealing with the claim of workers of a canteen run through a private contractor in pursuance
of the obligation of the industrial establishment u/s 46 of the Factories Act, 1948, this Court upheld the claim of workers for being treated as the
workers of the company itself. In Steel Authority3 a Constitution Bench of this Court considered the claims of contract labourers engaged by a
contractor for absorption in the establishment of the principal employer on issuance of the abolition notification under the provisions of the Contract
Labour (Regulation and Abolition) Act, 1970 and the rules made thereunder. This Court, while adverting to the position of law in force, has
observed as follows: (SCC pp. 55-56, paras 106-07)
We have gone through the decisions of this Court in VST Industries case4, G.B. Pant University case7 and M. Aslam case8. All of them
relate to statutory liability to maintain the canteen by the principal employer in the factory/establishment. That is why in those cases, as in Saraspur
Mills case5 the contract labour working in the canteen were treated as workers of the principal employer. These cases stand on a different footing
and it is not possible to deduce from them the broad principle of law that on the contract labour system being abolished under sub-section (1) of
Section 10 of the CLRA Act the contract labour working in the establishment of the principal employer have to be absorbed as regular employees
of the establishment.
An analysis of the cases, discussed above, shows that they fall in three classes: (i) where contract labour is engaged in or in connection with
the work of an establishment and employment of contract labour is prohibited either because the industrial adjudicator/court ordered abolition of
contract labour or because the appropriate Government issued notification u/s 10(1) of the CLRA Act, no automatic absorption of the contract
labour working in the establishment was ordered; (ii) where the contract was found to be a sham and nominal, rather a camouflage, in which case
the contract labour working in the establishment of the principal employer were held, in fact and in reality, the employees of the principal employer
himself. Indeed, such cases do not relate to abolition of contract labour but present instances wherein the Court pierced the veil and declared the
correct position as a fact at the stage after employment of contract labour stood prohibited; (iii) where in discharge of a statutory obligation of
maintaining a canteen in an establishment the principal employer availed the services of a contractor the courts have held that the contract labour
would indeed be the employees of the principal employer.
7.Consequently, we consider it to be too late in the day for the appellant, which had an obligation under the Factories Act, 1948 to run the canteen
to contend to the contrary. So far as the case on hand is concerned, the Division Bench has chosen to leave liberty to the appellant to consider the
claims of the workers as to whether they satisfy the requirements and whether they are otherwise unfit for confirmation. In the light of all these, we
are unable to countenance the challenge to the decision of the High Court, as either legitimate or valid one. The appeal, therefore, fails and shall
stand dismissed. No costs.
Even though in the present case, the canteen is not a statutory canteen as per Section 46 of the Factories Act, yet the evidence showed that
under a settlement reached between the management and the workmen of the FCI, the management had agreed to provide canteen facilities at
their offices. Therefore, it can be taken as a welfare measure. If the canteen is run by the contractor based upon a contract, then the question may
be different. But when the canteen is not run by a contractor, but directly run by the FCI through a mechanism created, i.e., the Canteen Managing
Committee, then it cannot be said that they are not employees of the FCI. The Canteen Managing Committee is the creature of the FCI and has
got no independent existence. The management cannot create a clear device to defeat the claim of the employees by contending that the
management committee is an independent entity. In fact, it is not even a registered body and not covered by any provisions of law and has no right
to exist as an entity by itself. The other overwhelming evidence including the admission made by the M.W.1 clearly shows that the FCI managing
committee has no legs to stand on its own. In fact the writ petitions filed by the managing committee after one year after the management has filed
the writ petition itself will show that they had no intention of challenging it earlier. At the instance of the FCI, they have come forward to challenge
the same long after the award was passed. Thus, the two writ petitions filed by the departmental canteen committee in W.P.Nos. 24580 and
24581 of 2007 themselves are not maintainable as the canteen managing committee has no legs to stand on its own and it is not an entity by itself.
On this ground, those writ petitions can even be dismissed as not maintainable.
Since the issues will have to be considered in the writ petitions filed by the FCI, this court has considered the issue at length. The decisions
relied on by the counsel for the petitioner in KGSD Canteen Employees'' Welfare Association''s case (cited supra) does not apply to the case on
hand. Because in that case, the Supreme Court dealt with the case of the workmen approaching the High Court directly under Article 226 and the
High Court had directed the State Government to regularise the service of employees of canteen and did not arise out of any Award passed by the
industrial tribunal. The only question whether persons who were recruited outside recruitment rules can claim for regularization was the issue that
was considered in that case. But, in the present case, the fact that the canteen was run by the FCI through the medium called departmental canteen
committee will not alter the status of the employees. The CGIT as a matter of fact found that they were employees of the FCI and not that of the
canteen committee which has no independent existence. On the other hand, the decisions cited above starting from Indian Overseas Bank and
G.B.Pant University''s case will completely clinch the issue in favour of the workmen. Hence the first objection stands overruled.
The second objection that temporary employees cannot be regularized also does not stand to reason. Because in the present case, out of 14
employees working in the canteen, 12 workers have been brought under time scale of pay by the management. These two employees were left out
only on the ground that there was altered sanctioned strength in view of the reduced status of the canteen category from that of _B_ to _C_. For
reducing the status, the workmen cannot be blamed. The sudden fall in the staff strength was due to exodus by voluntary retirement scheme. But
these two workmen were employed when the canteen was enjoying the status of ''B'' category and the sanctioned strength was 15. The canteen
was functioning only with 12 employees as seen from Ex.W.1. In fact workman Arumugam is working for 10 years at the time of pendency of the
dispute. The other workmen Bakkiavathi, sweeper was working for 16 yeaRs. Therefore, it is too late to contend that they were not recruited
properly.
In the present case, the circular issued by the FCI marked as Ex.W.9 will clearly show that the power of appointment of staff of the canteen
vest with the canteen committee comprising of FCI officials. At the time of recruitment, they were within the staff strength available for ''B''
category canteen. Therefore, it cannot be said that their recruitment was not legal and proper.
The workmen also relied upon the statutory enactment, i.e., Tamil Nadu Industrial Establishments (Conferment of Permanent Status to
Workmen) Act, 1981 so as to contend that u/s 3, if an employee working in an establishment completes 480 days in a period of 24 calender
months, he is entitled to be made permanent. The labour court considering the fact that the workmen have been employed for over a decade and
their case has been recommended by the committee, held that it is not open to the FCI to take an erroneous view in refusing to confirm the
services of two workmen. Under these circumstances, the decision relied on by the counsel for the petitioners in Indian Drugs & Pharmaceuticals
Ltd.''s case (cited supra) has also no relevance to the case on hand. The CGIT has got power to direct regularization in a given case if on
appreciation of facts, the CGIT found that the workmen were really employed by the FCI and they put in long number of years of service and their
entry was not through any back door and such direction can also be granted by the CGIT. In the light of the above, there is no case made out to
entertain four writ petitions. All four writ petitions will stand dismissed. No costs. In view of the dismissal of writ petitions, the FCI is directed to
implement the impugned Awards in I.D.Nos. 420 and 424 of 2004 within a period of eight weeks from the date of receipt of copy of this order. It
is also made clear that the contesting respondents are entitled to withdraw the amount lying in deposit with the CGIT and claim the balance from
the FCI, the writ petitioners in W.P.Nos. 45539 and 45540 of 2006. Consequently connected miscellaneous petitions stand closed.