Andhra HC (Pre-Telangana)
Karri Pothu Raju And Ors. vs National Thermal Power Corpn. Ltd. And ... on 27 November, 1996
Equivalent citations: 1997(1)ALT97, (1998)IIILLJ896AP
Author: V. Rajagopala Reddy
Bench: V. Rajagopala Reddy
JUDGMENT P.S. Mishra, C.J.
1. This appeal under Clause 15 of the Letters Patent of the Court has arisen from a petition under Article 226 of the Constitution of India by the 54 appellants before us, who, it is not in dispute, are employed in the canteen of the factory of the first respondent herein, having a total number of 2300 workers. The first respondent is a public sector undertaking and, it is not in dispute, is a factory governed by the Factories Act. It started a canteen in the year 1983, but is alleged, handed it over to a contractor and contractors changed from time to time until the third respondent, i.e; Indian Coffee Workers Co-operative Society Ltd., represented by its Secretary, has taken over the canteen.as the contractor. It is conceded, however that the third respondent Society is not a Co-operative Society of the factory of the first respondent undertaking. Appellants have moved this Court seeking regularisation of their services with all attendant benefits of service with effect from the date of their appointment in the canteen as employees of first respondent. First respondent has, however, stated that the establishment of the canteen was a Welfare measure to make it easy for the employees to purchase food stuffs and to have snacks and tea during tea breaks at subsidised rates. The running of the canteen or catering establishment is a special skill and the first respondent, which is established for generation of power, does not have such skill to run the canteen for the benefit of the employees. Thus from time to time, if (first respondent) was giving the canteen to a contractor by following the procedure of calling for limited tenders and granting contract to successful bidder until finally it has found the third respondent, which has specialised skill in catering and running the canteen. Learned single Judge has, has however, held against the appellants and dismissed the writ petition. Learned Counsel for the petitioner-appellants has brought to the notice of the Court the judgments of the Supreme Court in M.M.R. Khan v. Union of India. (1995-III-LLJ(Suppl.)-166) Dena Nath v. National Fertilizers Ltd. (1992-I-LLJ-289) and Parimal Chandra Raha v. Life Insurance Corporation of India, (1995-1I-LLJ-339) and the learned single Judge has adverted to all the above but has held on facts as follows :
"In the light of the above, we have to examine on the facts of this case whether there are any circumstances warranting the extension of the principles laid own by the above decisions to the petitioners. On the facts disclosed above, there are no statutory instructions issued by the first respondent treating the employees employed by the contractor in the canteens as employees of the first respondent was not taking any interest in running the canteen except entrusting the work to a contractor. The contractors also are being changed from time to time. There are no statutory regulations regulating the service conditions of the employees. For reasons of security perhaps the first respondent was taking any interest in recruiting the employees of the canteen and issuing passes which cannot be construed as conferring the status of master and servant relationship between the first respondent and the petitioners. Under those circumstances, there is no comparison between the petitioners and the employees of the canteens run by Life Insurance Corporation and the Railway Board.
If the two judgments referred to above are not applicable, the petitioners cannot claim the relief namely that they should be treated as the employees of the first respondent organisation.
Coming to the argument of the learned Counsel for the respondents that granting relief to the petitioners would amount to abolition of the contract labour which is the realm of the Government and Courts have no power to grant such a relief, it is enough if the judgment of the Gujarat Electricity Board, (1989-II-LLJ-470) is referred to. It was held that after coming into operation of the Act, the authority to abolish the contract labour is vested exclusively in the appropriate Government which has to take its decision in the matter in accordance with the provisions of Section 10 of the Act. In B.H.E.L. Workers' Association, (1985-I- LLJ-428) Justice O. Chinnappa Reddy and Justice V. Khalid considered a similar question. It is necessary to refer in brief the facts of that case. The argument that was advanced before the Court was that the employment of contract labour has been frowned upon by various committees appointed by the Government and Parliament itself thought that the employment of contract labour was undesirable and therefore enacted the Contract Labour (Regulations and; Abolition) Act, 1970. It was submitted that in order to give effect to the intention of Parliament as well as the Directive principles of State policy, the Court should declare illegal the employment of contract labour by the State or by any public sector undertaking which for the purpose of Article 12 of the Constitution is the State. In other words, the argument was that the Supreme Court by itself should abolish the contract labour by the State and by all public sector undertakings. It was held by the Supreme Court as follows :
"We are afraid that would be nothing but the exercise of legislative activity with which function the Court is not entrusted by the Constitution.
In Catering Cleaners of Southern Railway, a similar view was expressed by O. Chinnappa Reddy and V. Khalid, JJ. "In view of the above, the petitioners are not entitled to any relief. However, the State Governmert has already issued G.O. Ms. No. 11 dated February 12, 1990 Women and Child Welfare and Labour (Lab-II) Department which is the subject matter ofthe writ petitions pending in this Court."
Learned single Judge has found in the judgment of Bharat Heavy Electricals Ltd., Workers' Association v. Union of India, (1985-I-LLJ-428) a principle which could, according to her, meet all that is observed by the Supreme Court in the cases of M.M.R. Khan, (supra), Dena Nath, (supra) and Parimal Chandra Raha, (supra) which essentially has proceeded on the footing that all such establishments of a factory in which contract labour are engaged, unless contract labour is abolished, such employees cannot claim any parity with the regular employees of the factory. We do not propose to say much on the subject of the contract labour, but propose to deal with the nature of the canteen to find out whether there is any justification in the plea of the first respondent that it has acted in the interest of the workers in providing a canteen and has committed nothing wrong in handing over the Management of the canteen to a contractor, who in turn has engaged employees to work in the canteen. Section 46 of the Factories Act provides as follows :
"Canteens :
(1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for -
(a) the date by which such canteen shall be provided;
(b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen;
(c) the foodstuffs to be served therein and the charges which may be made therefor;
(d) the constitution of a managing committee for the canteen and rep-
resentation of the workers in the man agement of the canteen;
(dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuffs and which shall be borne by the employer;
(e) the delegation to the Chief Inspector subject to such conditions as may be prescribed, of the power to make rules under Clause (c)".
It thus depends upon the rules framed by the State Government requiring that in any specified factory, wherein more than 250 workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for 1 the use of the workers. The Government of the State has made rules and it is not in dispute, the rules are applicable to the first respondent, called 'A.P. Factories Rules, 1950'. Sub-rule (2) of Rule 65 states : ' "The occupier of every factory notified by the State Government, and wherein more than two hundred and fifty workers are ordinarily employed shal 1 provide i n or near the factory an adequate canteen according to the standards prescribed in these rules".
Rule 65 and other sub-rules therein spell out how the occupier shall submit to the approval of the Chief Inspector, plans and site plan of the building to be constructed or adopted for use as a canteen, how the canteen building shall be maintained, how records will be maintained and all the facilities to be provided in the canteen. Rule 68 prescribes, inter alia, that food, drinks and other items served in the canteen shall be served on a non-profit basis and the prices charged shall be subject to the approval of the Canteen managing Committee, provided where the canteen is managed by Co-operative Society in accordance with the provisions of Sub-rule (6) of Rule 70, such society may be allowed to include in the working charges to be incurred for the food, the food stuff served, a profit upto five percent on its working capital employed in running the canteen. Rule 70 provides for the appointment of the. Managing Committee and states that the Manager shall appoint a Canteen Managing Comittee which shall be consulted, from time to time, as to the quality and quantity of food stuffs to be served in the canteen etc. Rule 71 -A, however, gives power to the Chief Inspector to relax the provisions of Rules 65 to 70 subject to the condition as he may deem fit in the case of factories belonging to the same business group as amalgamation where centralised cooking in an approved industrial canteen is arranged for. In Parimal Chandra Raha, case (supra) the Supreme Court has stated :
"(i) Where, as under the provisions of the Factories Act, it is statutorily obligatory in 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 has 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.".
In Employers in relation to the Management of Reserve Bank of India v. Their Workmen, (1996-II-LLJ-42), the Supreme Court has mentioned particularly the view in M.M.R. Khan v. Union of India (supra) and taken notice of the division of the canteens into three categories stating as follows :
(i) Statutory Canteens which are required to be provided compulsorily in view of Section 46 of the Factories Act, 1948;
(2) Non-statutory Recognised Canteens - such canteens are established with the prior approval and recognition of the Railway Board as per the procedure detailed in the Railway Establishment Manual; and (3) Non-statutory Non-recognised Canteens -these are canteens established without the prior approval or recognition of the Railway Board".
2. Speaking on Parimal Chandra Raha's case (supra) and after extracting the above passage, the Supreme Court has commented upon the contentions of the learned Counsel for the parties which were confined only to propositions Nos. 3 and 4 in these words :
"Counsel forthe appellant Mr. Salve submitted that propositions Nos. 3 and 4 contained in paragraph 27 of the judgment are very wide and require reconsideration and appropriate modification, whereas Mr. Tarkunde, Counsel for respondents submitted that propositions Nos. 3 and 4 lay down the law correctly. It is unnecessary, on the facts of this case, to consider to what extent propositions Nos. 3 and 4 require to be clarified or modified, since in this case the Tribunal has proceeded only on the basis that the instant case clearly falls within the ratio laid down by this Court in M.M.R. Khan's case (supra), which we have held is a totally wrong perspective".
3. It is clear thus from the above that the two propositions emerging in Parimal Chandra Raha's case (supra) i.e., (1) Where, as 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 and (2) where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on 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, has found approval and has been consistently held to be the correct proposition and view of law. A Bench of this Court in Writ Appeal No. 445 of 1996 dated June 20, 1996, has observed as follows :
"The argument, however, that the works of canteen was entrusted to a contractor, it appears, is developed without taking notice of Section 46 of the Factories Act and Rules 65 to 71 of the Andhra Pradesh Factories Rules, 1950, which enjoin the occupier of every factory notified by the State Government and wherein more than 250 workers are ordinarily employed to provide in or near the factory an adequate canteen according to the standards prescribed in the rules and provide food to the workmen at subsidised rate".
4. From the facts of the instant case, it can reasonably be inferred that the case of the petitioner- appellants falls in Category-I Canteen as pointed out in Parimal Chandra Raha's case (supra) and the rules aforementioned make it obligatory upon the management to provide canteen forthe workers and to manage it with the help of a Managing Committee, if so advised, and not through a contractor at all. Introduction of a contractor in such a situation only to place the canteen management and the employees in the canteen under the control of the contractor is violative of the rules aforementioned and is against the spirit behind Section 46 of the Factories Act. It appears, the Bombay Court in Writ Petition No.909 of 1989 judgment dated January 22, 1996 has taken the view as this Court has taken in Writ Appeal No. 445 of 1996 and the Supreme Court has affirmed the same by stating in its order in Special Leave to Appeal (Civil) No. 10125 of 1996 as follows :
"In view of the law laid down by this Court in Parimal Chandra Rah a and Ors. v. Life Insurance Corporation of India and Ors. (supra), there is no scope to interfere with the impugned judgment of the High Court".
5. Learned Counsel for the first respondent has, however, urged before us that while affirming the judgment of the Bombay High Court as above, the 1 Supreme Court has given some directions and in the instant case for the obvious reasons of the existence of the canteen in the hands of the contractors ever since the establishment of the canteen, the Court should issue similar directions as issued by the Supreme Court in the said case. While we do not have much information as to the type of the employees the canteen is having and whether there are any employees in the canteen who did not qualify within the minimum and the maximum age limits prescribed under the policy of the first respondent or that they do not fit in the minimum medical standards of minimum service period, it is not possible, therefore, to specify, in the same terms as the Supreme Court has done, in the instant case, but to observe generally that a person who has crossed the age limit or a person who is below the age of employment can obviously be not regularised or treated as employee of first respondent. Similarly, a person who is not medically fit cannot claim employment and if has so worked alright, but cannot by virtue of such employment claim the benefits of the employees of the first respondent. It would be advisable in such circumstances that the first respondent corrects its mistakes and allows the cases of all the employees and treats all those who are not unfit to continue in the employment of first respondent as its employees.
6. For the reasons aforementioned, the appeal is allowed. The impugned judgment is set aside. The writ petition is allowed to the extent indicated above.
7. After conclusion of the hearing, learned Counsel for the first respondent has informed that the workers of the first respondent-factory have constituted a co-operative society to run the canteen. We do not make any observation on this. It will have to be seen whether handing over the management to the Workers Co-operative Society shall make any change in the conditions of employment in the canteen or not.