Gujarat High Court
Managing Director State Bank Of ... vs Bhavnagar Jilla Mazdoor Sangh ... on 21 April, 2017
Author: Sonia Gokani
Bench: Sonia Gokani
/*C/SCA/15460/2011 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 15460 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS JUSTICE SONIA GOKANI
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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MANAGING DIRECTOR STATE BANK OF SAURASHTRA....Petitioner(s)
Versus
BHAVNAGAR JILLA MAZDOOR SANGH C/O.MANIBHAI GANDHI &
2....Respondent(s)
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Appearance:
MR MIHIR THAKORE, SR. ADV. with MR PRANAV G DESAI, ADVOCATE for
the Petitioner(s) No. 1
MR DG SHUKLA, ADVOCATE for the Respondent(s) No. 1
MR P P MAJMUDAR, ADVOCATE for the Respondent(s) No. 2
MR SP MAJMUDAR, ADVOCATE for the Respondent(s) No. 2
RULE SERVED for the Respondent(s) No. 1 , 3
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CORAM: HONOURABLE MS JUSTICE SONIA GOKANI
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Date : 21/04/2017
ORAL JUDGMENT
1. This challenge is made by the petitioner State Bank of Saurashtra, which is now merged into the State Bank of India, under Article 226 of the Constitution of India, to the award passed by the Industrial Tribunal, Bhavnagar ("the Tribunal" for short) in Reference I.T.C(New) No.5 of 2009, whereby the Tribunal has declared three employees of the State Bank of Saurashtra as the employees of the State Bank of India, Bhavnagar and granted all benefits.
2. The facts in capsulized form are as follows: 2.1 Respondent No.2 is running consumer store in the name and style of "State Bank of Saurashtra Employees Consumer Cooperative Stores", which is registered under the Gujarat Cooperative Societies Act, 1961 under No.BH/1144 dated On 29.7.1965. The said store is also covered under the provisions of Bombay Shops and Establishment Act in order to provide essential commodities of good quality at reasonable price to all its members. It is the say of the petitioner that the Executive Committee of the Store employs its own workers to run the stores Page 2 of 55 HC-NIC Page 2 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT and fixes the terms of employment applicable to the concerned employees and there is a separate body for maintenance and administration of the said consumer store.
2.2 Three employees of the store, namely, Shri Jitubhai B. Zankhara, Shri Dilipbhai B. Mandaviya and Shri Kishor C. Sheth had been employed respectively as ClassIV and ClassIII employees.
Shri Jitubhai worked as salesman since 1978 and retired on 31.5.2002, whereas Shri Dilipbhai Mandaviya was working as Weighman, ClassIV and the employee from 8.4.1984 and Shri Kishorbhai Sheth was also working as a Weighman, ClassIV workman with effect from 6.3.1990. Both of them had retired till August, 2012. By their letters dated 31.5.1991 and 15.2.1992, they raised a demand before the erstwhile State Bank of Saurashtra to treat them as regular employees of the Bank. As no heed was paid to such request, they had referred the matter to the Assistant Labour Commissioner, Ahmedabad. On account of failure of this conciliation proceedings, the matter was referred to the Tribunal for adjudication by way of Reference I.T.C.(Old) NO.12 of 1994 and now the new number is I.T.C.(New) NO.5 of 2009. The terms of reference mentioned in the Schedule of Page 3 of 55 HC-NIC Page 3 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Reference are as follows: THE SCHEDULE "Whether the three employees of State Bank of Saurashtra Employees Consumer Coop. Store Ltd. are the workmen of State Bank of Saurashtra, Bhavnagar? If so, whether the demand of the Bhavnagar Jilla Mazdoor Sangh for treating them as regular employees of State Bank of Saurashtra is justified? What relief, if any, the workmen are entitled?"
3. The Union has filed the statement of claim. It was contended that the petitionerBank, as per its policy and rules published in the Bank for welfare activity of its employees, started a store exclusively for the benefit of Bank employees. The Managing Director of the Bank is the Chairman of respondent No.2Store and the Manager or the Accountant of the Store is appointed by the petitionerBank. The salary is to be paid to the Manager and Accountant not as the employee of respondent No.2 Stores. The land, building, furniture and fixtures as well as stationary are all provided by the petitionerBank itself. It was conducting audit of the Books of Accounts of the Store employees. It was also further contended that one of the workman, namely, Shri Kishorbhai C. Sheth was absorbed in the Bank in the year 1984. One Smt.Pravinaben widow of Shri Suresh V. Shah, an Page 4 of 55 HC-NIC Page 4 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT employee of the Stores was appointed on compassionate ground by the petitioner Bank along the line of other regular employees. Thus, the petitionerBank and respondent No.2Store are not separate and distinct. It is also further contended that the PetitionerBank had also absorbed the employees of canteen at its Head Office as regular employee of the Bank.
4. Written Statement has been filed by the petitioner Bank on 11.7.1995. The petitionerBank submitted an application on 16.10.1995 before the Tribunal to join respondent No.2Store as a necessary party.
5. The list of documents along with copy of withdrawal form was used by the Bank employees. Both the sides adduced oral evidence as well and after written arguments, the Tribunal allowed the Reference and directed the petitionerBank to treat all these three employees of the Stores as the Bank employee with effect from 1.4.1994 along with some other directions.
6. Aggrieved petitionerBank is before this Court with the following reliefs: "11. The petitioner therefore prays that this Hon'ble Court may be pleased to issue an appropriate writ, order or direction and be Page 5 of 55 HC-NIC Page 5 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT pleased:
A. to call for the record of proceeding of Reference I.T.C(New) No.5/2009 from the Ld. Industrial Tribunal Central, Bhavnagar and after perusing the same, to quash and set aside the award dated 30.06.2010 passed by the Ld.Industrial Tribunal, Central, Bhavnagar in Reference I.T.C(New)No.5/2009. B. to stay, pending the hearing and final disposal of the present Special Civil Application, the operation and implementation of the Award dated 30.06.2010.
C. provide for the costs of this Special Civil Application.
D. pass such other and further orders as this Hon'ble Court deems fit and proper in the facts and circumstances of the case."
7. Affidavitinreply is filed by respondent No.1, raising all contentions and providing chronology of events which had taken place and, which eventually led to preferring the Reference and as to how the sequence of events also led to passing of award in favour of the respondents.
8. Respondent No.2 has also filed its affidavit. It is his say that there is a relationship of master and servant between the respondent and the member of the Union of respondent No.2, who has preferred Reference before the Tribunal. It was not compulsory for the Bank employees to become members of the respondent No.2Store. The employees of the store cannot be said to be employees of the Bank.
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9. In this backdrop of facts, if one looks at some of the orders passed by this Court, initially, this Court, on the ground of delay and latches, had not entertained the petition. Letters Patent Appeal No.2060 of 2011 was preferred, where this Court Coram (V.M.Sahai & A.J.Desai, J.J.) allowed the appeal on the ground that the Coordinate Bench had not considered the grounds of delay and latches put forth by the petitionerBank in right perspective.
The Court had allowed the appeal quashing and setting aside the order of the learned Single Judge and delay of eight months in filing the petition had been condoned. It is remanded back to this Court to decide it afresh on merit at the earliest. Such an order came to be passed on 20.12.2011.
10. Once the matter came back before the learned Single Judge, this Court (Coram:K.S.Jhaveri, J.), vide order dated 29.3.2012 passed in Special Civil Application No. 15460 of 2011, after hearing both the sides, chose not to grant interim relief by holding that this would amount to allowing the appeal at interim stage.
"11.0 The Tribunal after considering the evidence on record, has come to the conclusion Page 7 of 55 HC-NIC Page 7 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT that the employees of the consumer shop are the employees of the bank and has given the benefits almost after 17 years. In that view of the matter, granting interim relief will amount to allowing this petition at this stage and at the same time if interim relief is not granted no prejudice is likely to be caused to the petitioner. The respondents who are working in the cooperative society have been deprived of their legitimate rights since long and the competent Court has decided the same after 18 years. Therefore this is not a case where interim relief is required to be granted. Hence the interim relief is refused."
11. Thus, the judgment and award though not stayed, no benefit has accrued in favour of the employees so far.
12. This Court has heard learned Senior Advocate Mr.Mihir Thakore with learned advocate Mr.Desai for the petitioner. He firstly urged that the store not being an industry, the reference itself is bad by relying on the decisions of G.M.ONGC Shilchar vs. ONGC Contractual Workers Unions reported in 2008 (3) LLN 490 and in the case of Indian Overseas Bank vs. Indian Overseas Bank Staff Canteen Workers Union and another reported in 2002(2)LLN 930.
12.1 The legal preposition given by the learned Page 8 of 55 HC-NIC Page 8 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT counsel is to the effect that either it is statute which obliges to provide certain service in which case, in certain provisions of law, it is a service provided by the Bank or if such service provided by the Bank, having become part of all other employees, in that case, that particular Union be treated as employees. He has emphasized that there are certain questions of law, which has been, time and again, decided by the Apex Court. However, factual matrix eventually would govern each case. According to the learned counsel, there are certain tests, which have been given by the Court, which shall need to be employed before arriving at a conclusion. In case of employees, who are claiming to be employees of the Bank, they shall need to clear those tests. It is urged by him further that it is not a statutory obligation of the erstwhile Bank or of the State Bank of India nor is it part of the conditions of service of other employees to run Cooperative Store, which is surely not an obligation, and therefore, when it is run by the employer to give benefit and Page 9 of 55 HC-NIC Page 9 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT comfort to the employees, the canteen is a liability of the employees.
12.2 He has sought to rely on the following authorities.
1) Union of India(UOI) and others vs. Ratan Kansa Banik and others, (1997) 11 SCC 257.
2) Indian Petrochemicals Corpn.Ltd & Anr. vs. Shramik Sena and Ors., (1999) 6 SCC 439.
3) All India Railway Institute Employees' Association vs. Union of India through the Chairman, 1996(2) SCC 258.
4) Union of India (Railway Board) & Ors. vs. J.V.Subhaiah and others etc.etc., JT 1995(9) SC
488.
12.3 Learned counsel also urged this Court that a proper test, which needs to be borne in mind is whether or not hirer had authority to control the manner of execution of the act in question.
13. Ms.Rana, learned advocate appearing for Mr. Page 10 of 55 HC-NIC Page 10 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Majmudar, learned advocate has adopted the submissions of learned counsel. She has urged that there was no obligation to run the store, as it is an independent body, which has its own rules and Code of Conduct. By no stretch of imagination, its employees could be termed as employees of the State Bank of India. It is admitted that widow of one of the employees working with the Cooperative Store had been absorbed in the Bank, but it was extremely grave condition, which had led to such humanitarian act. So far as the case of another employee is concerned, namely, Atulbhai, it is her say that by following regular procedure of recruitment, he had been absorbed.
14. Learned advocate Mr.Shukla appearing for respondent No.1 has emphatically urged that no stay had been granted by this Court against the said award, and therefore, the award needs to be complied with. He urged that against the order of the learned Single Judge, which had chosen not to stay the operation of the award, Special Leave Page 11 of 55 HC-NIC Page 11 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Petition (Civil)No.19040 of 2012 was preferred before the Apex Court, where the Court initially had granted stay and, while disposing of the matter on 17.10.2013, the Court had continued the operation of stay till the disposal of this petition. He has urged that by efflux of time, all the three employees have reached to the age of superannuation. Now, there will not be any question of putting in any service. It will be only a matter of monetary benefit, if the Court upholds the award. It is further argued by the learned counsel that the entire administrative control is by the Bank. No outsider except the members of the Stores are permitted. According to him, when both Atulbhai and widow of Sureshbhai Shah have been treated as permanent employees, there is no reason why in case of the present respondents, the same be not done.
14.1 He has relied the following decisions:
1) Indian Overseas Bank vs. Indian Overseas Bank Staff Canteen Workers's Union and another, 2000(4) SCC 245.
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2) Parimal Chandra Raha and others vs. Life
Insurance Corporation of India and others, 1995 Supp(2) SCC 611.
3) General Manager, Oil and Natural Gas Commission, Silchar vs. Oil And Natural Gas Commission Contractual Workers Union, (2008) 12 SCC 275.
4) Umrala Gram Panchayat vs. Secretary, Municipal Employees Union, 2015(1) GLH 712.
5) State of Punjab and others vs. Jagjit Singh and others, 2017(1) SCC 148.
15. Before adverting to the facts of the instant case, the question of law, which has been raised will need to be addressed by this Court. The legal question that has been raised shall have to be addressed by this Court whether the State Bank of India, who has taken over the State Bank of Saurashtra, is obliged to provide service to the employees of Consumer Cooperative Stores and is it a service provided by the Bank or has such service provided by the Bank, become part of all the employees' service conditions?
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16. In the case of All India Railway Institute Employees' Association(supra), the Association of about 2000 employees working in 500 Railway Institutes in various parts of the country had preferred a petition. Their grievance was that in the matters pertaining to the Railway Canteens, where the petitioners were working, they were not treated as Railway employees. According to them, the Railway Institute and Clubs were set up to provide recreational activities to the employees. The Railway Board, since has treated the Railway Institutes and Clubs as integral part of the Railways and they not only received GrantinAid but also other facilities from the Government, the employees of the Institutes and Clubs since were given free passes and medical facilities, they claimed that they should be treated at par with the employees in statutory Canteen and nonstatutory Canteen. This had been resisted by the Railway authorities and the Apex Court, after considering the respective contentions of the parties and the documents on record, held that there is a material difference between Canteen run in the Railway establishments and the Railway Institutes and Clubs.
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16.1 Relevant paragraphs are reproduced as under: "6. After considering the respective contentions of the parties and the documents on record, we are of the view that there is a material difference between the canteens run in the Railway establishments, and the Railway Institutes and Clubs. In the first instance, the canteens are invariably a part of the establishments concerned. They are run to render services during the hours of work since the services, by their very nature are expected directly to assist the staff in discharging their duties efficiently. The lack of canteenfacilities is ordinarily bound to hamper and interfere with, the normal working of the staff and affect their efficiency. The importance of the services rendered by the canteens to the staff in the daytoday discharge of their work therefore needs no further emphasis. Suffice it to say that the canteen services are today regarded as a part and parcel of every establishment. So much so that they have been made statutorily mandatory under the Factories Act, 1948 in establishments governed by the said Act where more than 250 workers are employed. The canteen services are thus no longer looked upon as a mere welfare activity but as an essential requirement where sizable number of employees work. That is why even the Railway Administration has, by its Establishment Manual made a provision for canteens even where the Factories Act does not apply, and has laid down procedure for their registration and approval and for extending to them almost the same facilities and monetary assistance as in the case of the statutory canteens. However, the same cannot be said of the Institutes and Clubs. Although for them also the Railway Establishment Manual makes provisions in the same Chapter XXVIII dealing with Staff Welfare, the provisions are of a materially different nature and pattern. In the first instance, there is no provision either for subsidy or loan directly from the Page 15 of 55 HC-NIC Page 15 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT funds of the Railway Administration. The Institutes/Clubs have to run on the membership fees and fixed grants received from the Staff Benefit Fund. The Fund consists of receipts from the forfeited provident fund and bonus, and of fines. The grant is made as pointed out by the Respondents, to each Institute/Clubs at the rate of Rs. 14 per capita of the non gazetted staff employed at the relevant establishment. Out of this contribution, only Rs.4 per capita are spent on the activities of the Institutes and Clubs, the rest of the amount being spent on education,relief in case of distress and sickness, sports, scouts activities and for other miscellaneous purposes. There is further no dispute that the wages and allowances of the staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and nonstatutory recognised canteens. 5A. 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 449 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.
7. What is more importance 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 Page 16 of 55 HC-NIC Page 16 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT 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.
8. If as contended by the petitioner Association the workers engaged in these Institutes/Clubs are treated as Railway employees, the danger is that these welfare activities which are otherwise encouraged by the Railway Administration may in course' of time shrink and cease altogether for want of funds. This will not be in the interests of the workers themselves. One cannot lose sight of the fact that today the emoluments of government servants including those of the Railway employees, may they belong to Class IV or to a higher category, are substantial and inhibit fresh recruitment. The services rendered by a government agency, therefore, become costly and uneconomical. Compared to the services which are rendered by the Institutes/Clubs and the benefits which flow from them, an increase in their administrative expenditure which may result from granting the status of the railway employees to their workers. will be disproportionately high and forbidding. This will also have a snowbailing effect on other welfare activities carried on by the Railways and similar activities carried on by all other organisations. We also cannot lose sight .of fact that the workers engaged in the welfare activities today are drawn from the respective localities without restrictions of the qualifications of education, age etc. Page 17 of 55 HC-NIC Page 17 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Whatever little scope for employment is available to the local population at the respective places may 603 also vanish with the cessation of these activities. After all, the number of employees who may benefit by becoming railway employees does not today exceed 887 who are the full time employees scattered all over the country. But, they may deprive many of their bread in the present and in the future. For, as pointed out by the Respondents, if the Railway Service Rules are made applicable, many of the present employees will also have to face immediate unemployment. This is of course yet a larger related socioeconomic consideration."
16.2 The Court in the end held that they are not persuaded to accept that there was no relationship between employer and employee between the Railway administration and the employees engaged in the Railway Institute and Clubs.
17. In the case of Union of India (Railway Board) and others vs. J.V. Subhaiah and others etc. etc., AIR 1996 SC 2890, the employees were seeking declaration that they are not regular Railway employees in the ClassIII post and, therefore, they were entitled to be paid regular salary for continuous service from the date of respective appointment in the Societies and also Page 18 of 55 HC-NIC Page 18 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT school premises including increment and payment of arrears of service. The Central Administrative Tribunal allowed the application and gave the directions for grant of reliefs. The stores were registered under the Andra Pradesh Cooperative Societies Act, 1964 and as a mandate from time to time, they were organized by the Railway administration as social welfare measure to inculcate cooperative spirit in the management of the Societies, distribution of essential commodities and lending of credit facilities etc. to its members. Relevant paragraphs of the said judgment are reproduced as under: "3. The admitted facts are that the respondents were appointed by the respective Railway Co operative Stores registered under the Andhra Pradesh Cooperative Societies Act, 1964 as amended from time to time. The Cooperative Stores were organised by the Railway Administration as social welfare measure to inculcate thrift and cooperative spirit in the management of the socieites, distribution of essential commodities and lending of credit facilities etc. to the members of the societies. Under the byelaws, respective societies consist of serving members of the Railway Administration at the respective places. Normally these socieities are formed at railway junctions. They are organised under the instructions issued by the Railway Administration in the Railway Establishment Manual (nonstatutory orders). Working of the socieities are supervised by the welfare Page 19 of 55 HC-NIC Page 19 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT officers appointed by the Railway Administration. It is in dispute as to whether salaries to welfare officers are paid by the socieites concerned or by the Railway Administration but that is not material for disposal of these appeals. It is also not in dispute that one third of the members of the socieities are nominated by the Railway Administration.
4. Shri Tulsi, learned Additional Solicitor, General contended, on the facts, that Co operative Stores registered under the Co operative Societies Act, a State Act and the articles of association or the byelaws of the socieites are sanctioned by the Registrar of Cooperative Societies (for short, "The Registrar") of the concerned State appointed by the State Government under the respective State Acts. The constitution of the socieities is regulated and registered under the State Act. Appropriate law, rules and byelaws provide that the General Body of the society periodically elects the members of the committee which in turn elects the President or general body itself elects the President, for a specified term. The President and the committee, as the case may be, is empowered to appoint the officers, employees and servants of the Stores according to its byelaws. The Registrar under the respective Acts, has supervision and control over the working of the societies and its employees. In case of dispute between the society and its members or the society and its officers or employees, the same is resolved by an arbitrator under the Act and appeal thereunder is provided to a Tribunal constituted or an appellate forum specified. The jurisdiction of a Civil Court stands excluded in respect of the said disputes. Salaries to the staff are paid by the society. Railway Establishment Manual prescribes procedure for organisation of the welfare activities, one of which is establishment of consumer credit cooperative socieities or house building societies. The share capital, though deducted from the salary of the member Page 20 of 55 HC-NIC Page 20 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT employees, is only by way of an amenity to enable them to organise, as a cooperative movement, for selfhelp and thrift. The Administration has no control over selection, appointment and payment of salaries to the staff of the society. No qualifications are prescribed in that behalf. It is due to administrative exigencies of the concerned Stores or the Societies that appointment or dismissal can be made by the President/committee as per the procedure prescribed under the respective Acts or the Rules or byelaws made thereunder. Thereby the Railway Administration has no managerial or administrative control over the staff of the Stores/Societies. The conditions of service of the officers of the Railway Administration are not applicable to them. If the Society is liquidated by the Registrar for its mismanagement the employees of the Societies seek the remedy only against the Societies. The societies have not been impleaded as respondents. The ratio is M.M. Khan v. Union of India, 1990 Supp SCC 191 : (AIR 1990 SC 937) cannot be applied to the employees of the Societies/Stores. The rentfree accommodation and provision of electricity to the Stores and medical facilities to the employees are extended as a part of the welfare measure without creating an obligation on the part of the Railway Administration to threat them as Railway employees. In M. M. Khan's case recognised cooperative canteens were organised as a part of the statutory duty under Section 46 of the Factories Act where employees are 100 or above in number but below 250. The ratio laid down therein is inapplicable to the facts of these appeals. Shri K. Madhava Reddy, learned senior counsel and Mrs. Chandan Ramamurthy, learned counsel for the respondent contended that the ratio of M.M. Khan's case applies on all fours to the facts of these appeals. Cooperative Stores/Societies have been organised at the instance of the Railway Administration. Their work is controlled and supervised by the Welfare Officer appointed by Page 21 of 55 HC-NIC Page 21 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT the Railway Administration and subsidy is being paid by the Railway Administration. The society is merely an intervening agency or veil between the Railway Administration and the employees of the Cooperative Stores/Societies. The Railway Administration admittedly gives facilities like railway passes, quarters on nominal rent, free medical aid and other amenities given to the regular officers and servants of the Railway Administration from time to time. The Railway Board issues circulars from time to time to control, organise and supervise the working of the Stores. The Railway Establishment Manual itself is a complete code in that behalf. Merely because the Railway Administration kept its arms as an intervening agency between the Stores and the employees, it cannot disown its liability to treat the employees appointed by the Stores/Societies (like canteen cases) as its employees. The decision of the Madras Bench of the CAT since upheld by this Court in an appeal and review petition also having been dismissed, the employees appointed by the respective Stores in Southern Railway and South Central Railway form a class discharging the same duties. Therefore, the respondents cannot be denied their Constitutional right to have equal treatment as had by the regular Railway employees Smt. Chandan Ramamurthy strong reliance on yet another decision of a two Judge Bench of this Court in Parimal Chandra Raha v. Life Insurance Corporation of India, 1995 (Supp) 2 SCC 611 : (1995 AIR SCW 2609).
xxx xxx xxx xxx xxx xxx
17. It is seen that service conditions of the employees, officers and servants of the Stores/Societies are not regulated by the Railway Administration. They are governed by the byelaws of the Societies subject to control and sanction by the Registrar under the State Act or the relevant provisions. There is no obligation on the part of the Railway Page 22 of 55 HC-NIC Page 22 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Administration to provide security for those employees. The disciplinary control by the Society concerned is subject to other laws and is exclusively domestic in character. The Railway Establishment Code is not applicable to them. Their appointment is subject to bond prescribed by the Registrar. The arrears of funds or misappropriated amounts etc. are recoverable under the provisions of the State Act and the Rules made thereunder. The services of the staff are liable to termination in terms of the State Act, Rules and byelaws.
18. In other words, there is a dual control over the staff by the Society and the Registrar. In that behalf, the Railway Administration has no role to play. If the subsidy is considered to be a controlling factor and the Societies/Stores as an intervening agency or viel between the Railway Administration and the employees, the same principle would equally be extendible to the staff, teachers, professors appointed in private educational institutions receiving aid from the appropriate State/Central Government to claim the status of Government employees. Equally, other employees appointed in other Co operative Stores/Societies organised by appropriate Government would also be entitled to the same status as Government servants. Appointment to a post or an office under the State is regulated under the statutory rules either by direct recruitment or appointment by promotion from lower ladder to higher service or appointment by transfer in accordance with the procedure prescribed and the qualifications speciafied. Any appointment otherwise would be vertical transplantation into services de hours the rules. Appointment through those institutions becomes gate way for back door entry into Government service and would be contrary to the prescribed qualifications and other conditions and recruitment by Public Service Commission or appropriate agencies. As contended, if the employees of the societies like cooperative canteens and declared to be railway servants, there would arise dual Page 23 of 55 HC-NIC Page 23 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT control over them by the Registrar and Railway Administration but the same was not brought to the attention of the Court when M.M. Khan's case (AIR 1990 SC 937) was decided.
19. It is true that the order of the twoJudge Bench of this Court had upheld the order of the Act, Madras Bench which had become final. With due and great respect to our learned brethren constituting the Bench, these features noted by us do not appear to have been put up for their consideration and so they did not have occasion to consider the impact as envisaged hereinbefore. The Bench merely stated thus :
"...The Tribunal has examined in detail Chapter XXIX of the Indian Railway Establishment Manual and has preferred to paras 2901 to 2909. Based on the provisions of the Railway Manual and taking into consideration the actual working of the Stores, the Tribunal has come to the conslusion that the employees working in the Cooperative Stores are in fact and in law, the employees of the Railway Establishment. We have been taken through the judgment of the Tribunal and other relevant material on record. We see no ground to interfere with the reasoning and the conclusion reached by the Tribunal...".
20. In view of the above discussion and in view of the legal setting referred to hereinbefore, we are of the considered view that the Bench had not laid down any law except approving the reasoning and conclusion reached by the Madras Bench of the CAT. The Madras Bench had merely referred to the provisions in the Manual and proceeded on the premise that they gave rise to a legal base to treat the employees of the Stores as the Railway employees. The reasoning is wholly illegal and unsustainable for the reasons stated above.
21. The principle of equality enshrined under Article 14 of the Constitution, as contended for the respondents, does not apply since we have already held that the order of the CAT, Madras Bench is clearly unsustainable in law and illegal which can never form basis to hold that the other employees are invidiously Page 24 of 55 HC-NIC Page 24 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT discriminated offending Article 14. The employees covered by the order of the Madras Bench may be dealt with by the Railway Administration appropriately but that could not form foundation to plead discrimination violating Article 14 of the Constitution."
18. In case of Ratan Kansa Banik and others(supra), the employees working in the Railway Employees Consumer Cooperative Society whether are to be treated as Railway employees or not was the question considered by the Apex Court to hold that the issue is covered by the judgment of the Apex Court in the case of Union of India vs. Southern Railway employees Cooperative Society vs. Workers, (1996) 2 SCC 269 and also the judgment rendered in the case of Union of India vs. Railway Board vs. J.V.Subhaiah, reported in JT 1995(9) SC 488. The Court held that the said decisions have held the issue against the employees.
19. In the case of Shramik Sena and others (supra), the workman filed the writ petition before the High Court of Bombay for declaration Page 25 of 55 HC-NIC Page 25 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT that they were regular workmen of the management and were entitled to have the same payscale in service conditions, as are applicable to regular workmen. According to Indian Petrochemical Corporation, they were working in the canteen in its factory at District: Raigadh in the State of Maharashtra. The Court noted the fact that the employer under section 46 of the Factories Act is required to provide maintenance facilities to its workers and, hence, the canteen run in the establishment of the management can be said to be a statutory canteen and workmen in this canteen become employees of the management, but only for the purpose of Factories Act. The Court was considering whether such status of workman under the Factories Act confines the relationship of employer and employee to the requirement of the Factories Act alone or it extends for other purposes which include continuity of service, absorption, seniority,pension and other benefits, which a regular employee enjoys. Relevant paragraphs of the said decision are reproduced as under: Page 26 of 55 HC-NIC Page 26 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT "17. ....The Factories Act does not govern the rights of employees with reference to recruitment, seniority, promotion retirement benefits etc. These are governed by other statutes, rules, contracts or policies. Therefore, the workmen's contention that employees of a statutory canteen ipso facto become the employees of the establishment for all purposes cannot be accepted.
18. The above argument of Mr. Singhvi is obviously based on the conclusion No. (i) noted in Raha's case (1995 AIR SCW 2609 : AIR 1995 SC 1666 : 1995 Lab IC 2064) (supra) wherein at para 25 (of Supp SCC) : (para 9 of AIR SCW) of the judgment this Court recorded thus:
"(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."
(Emphasis supplied).
19. Based on the above Shri Singhvi contends that once an employee is found by this Court to be an employee of the management because of the Factories Act, he becomes the employee of the management for all purposes. Per contra on behalf of the management, it is contended that a reading of the judgment in Raha's case in its totality shows that what this Court intended to lay down as law was that the employees working in a statutory canteen would become employees of the management not for all purposes but for the limited purpose of the Factories Act. It is to be noted that in Raha's case this Court did not specifically hold that the deemed employment of the workers is for all purposes nor did it specifically hold that it is only for the purpose of the Factories Act. However, a reading of the judgment in its entirety makes it clear that the deemed employment is only for the purpose of the Factories Act. This Court in Raha's Page 27 of 55 HC-NIC Page 27 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT case relied upon an earlier judgment of this Court in M. M. R. Khan v. Union of India, 1990 Suppl SCC 191 : (AIR 1990 SC 937). A three Judge Bench of this Court considering the provisions of the Factories Act held that by virtue of Section 46 of the said Act the factories covered by the said Act are obligated to provide canteen services and termed such canteens as statutory canteens. In para 6 (of Supp SCC) (Para 5 of AIR) of the said judgment while referring to in earlier judgment of this Court in C.A. No. 368/78, this Court held thus : "The Act referred to in the aforesaid order obviously means the Factories Act. Therefore, what was confirmed by this Court was thee declaration given by the Calcutta High Court that the employees of the statutory canteens were railway employees for the purposes of the Factories Act (Emphasis supplied).
20. Thereafter, in the said judgment (Khan' case) (AIR 1990 SC 937) this Court at para 20 proceeded to consider the question as to whether staff employed in the statutory canteen in the railway establishment, industrial or nonindustrial, are railway employees or not.
21. And concluded thus at para 28 (of Supp SCC) : (Para 21 of AIR) : "Thus the relationship of employer and employee stands created between the railway administration and the canteen employees from the very inception. Hence, it cannot be gainsaid that for the purposes of the Factories Act the employees in the statutory canteens are the employees of the railways. The decisions of the Calcutta and Madras High Courts (supra) on the point, therefore, are both proper and valid." (Emphasis supplied).
22. Thereafter, of course, in the said case, this Court on facts came to the conclusion, the employees concerned therein were in fact employees of the establishment.
23. If the argument of the workmen in regard to the interpretation of Raha's case (1995 AIR SCW 2609 : AIR 1995 SC 1666 : 1995 Lab IC Page 28 of 55 HC-NIC Page 28 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT 2064) is to be accepted then the same would run counter to the law laid down by a larger Bench of this Court in Khan's case (AIR 1990 SC 937) (supra). On this point similar is the view of another threeJudge Bench of this Court in the case of Employers in relation to the Management of Reserve Bank of India v. Workmen (1996) 3 SCC 267 : (1996 AIR SCW 1298 : AIR 1996 SC 1241 : 1996 Lab IC 1048). Therefore, following the judgment of this Court in the cases of Khan and R.B.I. (supra), we hold that the workmen of a statutory canteen would be the workmen of the establishment for the purpose of the Factories Act only and not for all other purposes.
24. Having held that the workmen in these appeals are the respondent's workmen for the purposes of the Factories Act, we will now deal with the next question arising in this appeal as to whether from the material on record it could be held that the workmen are in fact, the employees of the management for all purposes.
25. Before answering this question, we would like to observe that, normally, this being a question of fact, this Court would have been reluctant to examine this question which in the ordinary course should be first decided by a factfinding tribunal. However, as stated (sic) case parties have filed detailed affidavits and the contents of which, in our opinion, are sufficient for as to decide this question without the need for any oral evidence.
26. Though the canteen in the appellant's establishment is being managed by engaging a contractor, it is also an admitted fact that the canteen has been in existence from inception of the establishment. It is also an admitted fact that all the employees who were initially employed and those inducted from time to time in the canteen have continued to work in the said canteen uninterruptedly. The employer contends that this continuity of employment of the employees, in spite of there being change of contractors, was due to an Page 29 of 55 HC-NIC Page 29 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT order made by the Industrial Court. Thane, on 10th of November, 1994 wherein the Industrial Court held that these workmen are entitled to continuity of service in the same canteen irrespective of the change in the contractor. Consequently, a direction was issued to the management herein to incorporate appropriate clauses in the contract that may be entered into with any outside contractor to ensure the continuity of employment of these workmen. The management, therefore, contends that the continuous employment of these workmen is not voluntary. A perusal of the said order of the Industrial Court shows that these workmen had contended before the said Court that the management was indulging in an unfair labour practice and in fact they were employed by the Company. They specifically contended therein that they are entitled to continue in the employment of the Company irrespective of the change in the contractor. The Industrial Court accepted their contention as against the plea put forth by the management herein. The employer did not think it appropriate to challenge this decision of the Industrial Court which has become final. This clearly suggests that the management accepted as a matter of fact the respondentworkmen are permanent employees of the management's canteen. This is a very significant fact to show the true nature of respondents' employment. That apart, a perusal of the affidavits filed in this Court and the contract entered into between the management and the contractor clearly establishes :
a) The canteen has been there since the inception of the appellant's factory.
b) The workmen have been employed of long years and despite change of contractors the workers have continued to be employed in the canteen.
c) The premises, furniture, fixture, fuel, electricity, utensils etc. have been provided for by the appellant.
d) The wages of the canteen workers have to be reimbursed by the appellant.
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e) The supervision and control on the canteen is exercised by the appellant through its authorised officer, as can be seen from the various clauses of the contract between the appellant and the contractor.
f) The contractor is nothing but an agent or a manager of the appellant, who works completely under the supervision, control and directions of the appellant.
g) The workmen have the protection of continuous employment in the establishment.
27. Considering these factors cumulatively, in addition to the fact that the canteen in the establishment of the management is a statutory canteen, we are of the opinion that in the instant case, the respondentworkmen are in fact the workmen of the appellantmanagement.
28. At this stage, it is necessary to note another argument of Mr. Andhyarujina that in view of the fact that there is no abolition of contract labour in the canteen of the appellant's establishment, it is open to the management to manage its canteen through a contractor. Hence, he contends that by virtue of the contract entered into by the management with the contractor, the respondentworkmen cannot be treated as the employees of the management. This argument would have had some substance if in reality the management had engaged a contractor who was wholly independent of the management, but we have come to the conclusion on facts that the contractor in the present case is engaged only for the purpose of record and for all purposes the workmen in this case are in fact the workmen of the management. In the background of this finding, the last argument of Mr. Andhyarujina should also fail.
29. For the reasons stated above, this appeal of the management fails and is hereby dismissed with costs.
C.A. No. 1855/1998 :
30. In this appeal, the workmen have questioned the conditions that have been imposed by the High Court while directing regularisation of the workmen. They contend Page 31 of 55 HC-NIC Page 31 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT that once the Court comes to the conclusion that the workmen are in fact the employees of the management, there is no occasion to impose these conditions. We are unable to agree with this argument. It should be borne in mind that the initial appointments of these workmen are not in accordance with the rules governing the appointments or the established policy of recruitment of the management. The said recruitments could also be in contravention of the various statutory orders including the reservation policy. Further the respondent is an instrumentality of the State and has an obligation to conform to the requirements of Articles 14 and 16 of the Constitution. In spite of the same the services of the workmen are being regularised by the Court not as a matter of right of the workmen arising under any statute but with a view to eradicate unfair labour practices and in equity to undo social injustice and as a measure of labour welfare. Therefore, it is necessary that in this process suitable guidelines or conditions be laid down at the time of Courts issuing directions to regularise the services of the workmen so concerned depending upon the facts of each case. This Court has consistently followed this practice in the earlier cases of regularisation and we do not find any reason to differ from the same. For the aforesaid reasons, this appeal also fails and the same is dismissed but with costs."
20. In the case of State Bank of India and others vs. State Bank of India Canteen Employees' Union (Bengal Circle) and others, 2000ILLJ 1441, the question was whether the employees of the canteen of some of the branches of State Bank of India can claim to be absorbed as the employees of the State Bank of India. The Page 32 of 55 HC-NIC Page 32 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Apex Court held that the hand book which is prepared on the basis of the agreement between the Bank and the representative of the staff federation clearly indicates that there was no obligation on the part of the Bank to provide maintenance facilities to its staff. Otherwise, the staff Federation would not have settled the appeal against Justice Moidu Award which was pending before the Court, on the basis of the settlement. Moreover, it cannot be said that an outsider, who is not employed by the Bank, but who is working in the canteen run by the LIC, can claim that he is discriminated. Discrimination between equals may arise where the employees are appointed by the Bank. The Court, therefore, held that the canteens run by the LIC in branch having strength of less than 100 employees are non recognized canteens as there are neither provision nor any obligation arising out of award or contract between employer and employees of the bank in running such canteens. The Court, therefore, agreed with the decision rendered in the case of Reserve Bank of India vs. Workmen, Page 33 of 55 HC-NIC Page 33 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT JT 1996 (3) SC 226, where the employees of LIC running the canteen were not found entitled to recruitment, as there was no relationship of employer and employee between the Bank and the concerned workman. The Court held that the facts were similar to the facts of LIC's case and even presuming the privilege of providing canteen facilities to the employee, it would be difficult to hold that the Bank should provide the said facilities by running the canteen by itself. To promote canteen facilities by providing subsidy or other facilities is altogether different from running the canteen by the Bank itself. Running of a canteen in a small branch having staff strength less than a particular limited may not be economical, but may be a waste. It, therefore, held that employees of the canteens which are run at various branches by the Local Implementation Committees as per the welfare scheme framed by the SBI would not become employees of the Bank as the Bank is not having any statutory or contractual obligation or obligation arising under the award to run such canteens.
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21. So far as the case of Indian Overseas Bank (supra) is concerned, it was a grievance of 33 canteen employees of the Bank staff. The vexed question fought between worker and management was of status and relationship of workers in such canteen visavis the main industry or establishment. The canteen facilities provided by the Oversees Bank at Madras to the staff employees and the department of Central office was run initially through a contractor engaged by the management of the Bank. But, subsequently on the representation of All India Oversees Bank Employees Union, the Central Office of IOB agreed for the floating of society in the name and style of "Indian Oversees Bank Staff Cooperative Canteen". To facilitate the running of the said canteen, the central office agreed to provide for facilities like premises, furniture, utensils, electricity, (other than fuel), cost of fuel minimum of Rs.600/ per month and increase that by Rs.6000/ per month and water supply. It also provided facilities like oven, burners, wash Page 35 of 55 HC-NIC Page 35 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT basin, gas and cylinders at subsidised rate to the members of the staff. All promoters were actually serving members of the staff of the Bank. A separate account was opened in the name of the Canteen, where the funds were credited.
The staff required were employed by the promoters.
22. With the conciliation proceedings failed and the industrial dispute arising, the Reference was made and the Tribunal on the basis of the pleadings and the material, treated all 33 employees of the canteen as the workmen of respondent Bank. Aggrieved by the common award, the management challenged the same by way of writ petitions where the learned Single Judge of Madras High Court quashed the award holding that there was no employer and employee relationship between the Bank management and the canteen and this was challenged in revision and the Tribunal was of the view that not only the Bank in question had an obligation to run the canteen, but, in fact, employees were only running the Page 36 of 55 HC-NIC Page 36 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT canteen.
23. In such background, when the question arose before the Apex Court with regard to the relationship of these persons with the management, the Court held and observed thus: "20. The standards and nature of tests to be applied for finding out the existence of Master and Servant relationship cannot be confined to or concretised into fixed formula(s) for universal application invariably in all class or category of cases. Though some common standards can be devised, the mere availability of anyone or more or their absence in a given case cannot by itself be held to be decisive of the whole issue, since it may depend upon each case and the peculiar device adopted by the employer to get his neeeds fulfilled without rendering him liable. That being the position, in order to safeguard the welfare of the workmen, the veil may have to be pierced to get at the realities. Therefore, it would be not only impossible but also not desirable to lay down abstract principles or rules to serve as a ready reckoner for all situations and thereby attempt to compartmentalise and peg them into any pigeonhole formulas, to be insisted upon as proof of such relationship. This would only help to perpetuate practising unfair labour practices than rendering subtantial justice to the class of persons who are invariably exploited on account of their inability to dictate terms relating to conditions of their service. Neither all the tests nor guidelines indicated as having been followed in the decisions noticed above should be invariably insisted upon in every case, nor the mere absence of any one of such of such criteria could be held to be decisive of the matter. A Page 37 of 55 HC-NIC Page 37 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT cumulative consideration of a few or more of them, by themselves or in combination with any other relevant aspects, may also serve to be the safe and effective method to ultimately decide this often agitated question. Expecting similarity or identity of facts in all such variety or class of cases involving different type of establishments and in dealing with different employers would mean seeking for things, which are only impossible to find.
21. The decision in Indian Petrochmecial's case (1999 AIR SCW 2740 : AIR 1999 SC 2577 :
1999 Lab IC 3078) (supra) does not, in our view, lay down any different criteria than those declared in the other decisions for adjudging the issue, except that it had also considered specifically the further question as to the effect of a declaration, that the workers of a particular canteen, statutorily obligated to be run render no more than to deem them to be workers for the limited purpose of the Factories Act and not for all purposes. In the case before us, the claim is not that there was any such statutory obligation and the entire consideration proceeded only on the footing that it is a nonstatutory recognised canteen falling within the second of the three categories envisaged in the earlier decisions and the Tribunal as well as the Division Bench of the High Court endeavoured to find out whether the obligation to run was explicit or implicit on the facts proved in this case.
22. The factual findings recorded by the Tribunal and the Division Bench as also the materials relied upon therefor, have been already set out in detail, supra and it is unnecessary to refer to them in greater detail once over again. The canteen in question was being run from 1173 and even before that,indisputably, the Bank itself had arranged for running of the same through a contractor and similar arrangement to run through a contractor was once again made by Page 38 of 55 HC-NIC Page 38 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT the Bank on its closure on 26490, though after a period of some break from 211092. Besides this, the nature and extent of assistance, financial and otherwise in kind, provided which have been enumerated in detail, would go to establish inevitably that the Bank has unmistakably and for reasons obvious always undertaken the obligaiton to provide the canteen services, though there may not be any statutory obligation and it will be too late to contend that the provision of canteen had not become a part of the service conditions of the employees. The materials placed on record also highlight the position that the Bank was always conscious of the fact that the provision and availing of canteen services by the staff are not only essential but would help to contribute for the efficiency of service by the employees of the Bank. That it was restricted to the employees only, that the subsidy rate per employee was being also provided, and the working hours and days of the canteen located in the very Bank buildings were strictly those of the Bank and the further fact that no part of the capital required to run the same was contributed by anybody else, either the Promoters or the staff using the canteen are factors which strengthen the claim of the workers. It was also on evidence that the canteen workers were enlisted under a welfare fund scheme of the Bank besides making them eligible for periodical medical check up by the doctors of the Bank and admitting them to the benefits of the Provident Fund Scheme. The cumulative effect of all such and other facts noticed and considered in detail provided sufficient basis for recording its findings by the Tribunal as well as the Division Bench of the High Court ultimately to sustain the claim of the workers, in this case."
24. In the case of Employers in relation to the Page 39 of 55 HC-NIC Page 39 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Management of Reserve Bank of India v. Their Workmen , AIR 1996 SC 1241, the RBI had been providing canteen facilities to its classIII and ClassIV employees, which were run by Implementation Committee or Cooperative Societies or Contractor, in fact, it was making grants by way of subsidy at 95% of the cost incurred by the canteen for payment of salary, PF contribution etc. by providing fuel, water, furniture and fixtures. The Court held thus:
"19. We shall now take up the case of canteens run by the Cooperative Societies. Apart from subsidy, and other matters provided free of charge like water, electricity, premises, furniture etc., the Tribunal has adverted to the fact that the licence renewal charges paid by the committee are reimbursed by the Bank. Neither the strength of the workmen employed, nor the wages can be revised without the prior sanction of the Bank and so these canteens, are nonstatutory recognised canteens, and there is direct control exercised by the Bank in the form of nominating the representative of the Bank. Here again non of the peculiar aspects adverted to by this Court in M. M. R. Khan's case (AIR 1990 SC 937) (supra) regarding the nonstatutory recognised canteens are present. The mere fact the Bank nominates its representative to the Committee or reimburses the licence renewal charges will not in any way provide any direct control.
20. We will now take up the matter regarding the nonstatutory nonrecognised canteens. In dealing with this matter, the Tribunal has referred to the various aspects stressed in paragraph 38 (of Supp SCC) : (Para 30 of AIR) Page 40 of 55 HC-NIC Page 40 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT of the judgment in M. M. R. Khan's case (1990 Supp SCC 191) : (AIR 1990 SC 937) (supra) that the workmen therein are not railway servants. The Tribunal had adverted to the agreement executed between the Bank and the contractor which, according to it, will show that the distinguishing features mentioned in M. M. R. Khan's case (supra) are not present in this case. It may be so. That leads us to no positive conclusion regarding the matter at issue. As per the agreement the Bank has detailed the subsidy and other facilities afforded by it to run the canteen and has also stipulated certain conditions necessary for conducting the canteen in a good, hygenic and efficient manner like insistence of the quality of food, supply of food, engagement of experienced persons etc. Such conduct cannot in any manner point out any obligation in the Bank to provide "canteen" as wrongly assumed by the Tribunal. Since the distinguishing feature mentioned in M. M. R. Khan's case (supra) are not present in this case, the Tribunal by a negative process was inclined to hold that though the canteens may be non statutory and nonstatutory recognised ones and so they will be entitled to get all the benefits like the recognised canteens. This is a wrong approach to the issue. We have already held that nonstatutory recognised canteens in the instant case are not similar to the non statutory recognised canteens considered in M. M. R. Khan's case (supra). If the workers in the nonstatutory recognised canteens themselves cannot be considered to be workmen under the Bank, by the same token, the workers employed by the contractors, even if they are considered to be nonstatutory recognised canteens as held by the Tribunal, will not be entitled to get any benefit. It is only holding that the canteens run by contractors are similar to nonstatutory recognised canteens, the Tribunal has given the same benefit as was given to the workmen in the recognised canteens. It should also be noticed that the various factors noticed in paragraph Page 41 of 55 HC-NIC Page 41 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT 38 (of Supp SCC) : (Para 30 of AIR) of the judgment in M. M. R. Khan's case (1990 Supp SCC 191 : AIR 1990 SC 937) (supra) were adverted to by this Court to deny the plea that the canteen workers "are not railway servants" in the context of the various provisions contained in the Railway Establishment Manual and other documents. The said decision rested on its own facts.
21. We, therefore, hold that the assumption made by the Tribunal that the instant case clearly falls within the ratio laid down by this Court in M. M. R. Khan's case (AIR 1990 SC 937) (supra), is totally unjustified and incorrect. On the facts of this case, in the absence of any statutory or other legal obligation and in the absence of any right in the Bank to supervise and control the work or the details thereof in any manner regarding the canteen workers employed in the three types of canteens, it cannot be said that the relationship of master and servant existed between the Bank and the various persons employed in three types of canteens, 166 persons mentioned in the list attached to the reference are not workmen of the Reserve Bank of India and that they are not comparable employees employed in the officers lounge. Therefore, the demand for regularisation is unsustainable and they are not entitled to any relief. We hold that the award passed by the Tribunal is factually and legally unsustainable.
22. Before concluding the case, we should advert to the decision of this Court reported in Parimal Chandra Raha v. Life Insurance Corporation of India, (1995 (3) JT (SC) 288 :
1995 AIR SCW 2609) (supra) brought to our notice. Both sides extensively referred to this judgment to reinforce their plea. After adverting to the earlier decisions, this Court has summarised the law in paragraph 27 (of JT) : (Para 9 of AIR) of the judgment thus : "What emerges from the statute law and the judicial decisions is as follows :
(i) Where, as under the provisions of Page 42 of 55 HC-NIC Page 42 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT theFactories 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 Page 43 of 55 HC-NIC Page 43 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT 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. Counsel for the appellant Mrs. 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 (AIR 1990 SC 937) (supra), which we have held is a totally wrong perspective. In these circumstances, we are not called upon to consider the rival pleas regarding the scope and ambit of propositions Nos. 3 and 4 contained in para 27 (of JT) : (Para 9 of AIR) of the judgment in Parimal Chandra Raha's case (1995 (3) JT (SC) 288 : 1995 AIR SCW 2609) (supra)."
25. In the case of Balwant Rai Saluja and Anr.
v. Air India Ltd. and Ors., AIR 2015 SC 375, the Supreme Court has applied test of NALCO by holding that the proper test is whether or not the hirer had authority to control the manner of Page 44 of 55 HC-NIC Page 44 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT execution of the act in question.
26. Some tests are laid down for testing as to whether the management controls execution of the act in question. The following tests are applied.
Relevant paragraphs are reproduced hereunder: "59. The NALCO case (supra) further made reference to the case of Workmen of Nilgiri Co op. Mkt. Society Ltd. v. State of T.N. (2004) 3 SCC 514 : (AIR 2004 SC 1639 : 2004 AIR SCW
973), wherein this Court had observed as follows:
"37. The control test and the organization test, therefore, are not the only factors which can be said to be decisive. With a view to elicit the answer, the Court is required to consider several factors which would have a bearing on the result: (a) who is the appointing authority; (b) who is the paymaster;
(c) who can dismiss; (d) how long alternative service lasts; (e) the extent of control and supervision; (f) the nature of the job e.g. whether it is professional or skilled work; (g) nature of establishment; (h) the right to reject.
38. With a view to find out reasonable solution in a problematic case of this nature, what is needed is an integrated approach meaning thereby integration of the relevant tests wherefor it may be necessary to examine as to whether the workman concerned was fully integrated into the employer's concern meaning thereby independent of the concern although attached therewith to some extent."
60. It was concluded by this Court in the NALCO case (2014 AIR SCW 3448) (supra) that there may have been some element of control with NALCO because its officials were nominated to the Managing Committee of the said schools. However, it was observed that the abovesaid Page 45 of 55 HC-NIC Page 45 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT fact was only to ensure that the schools run smoothly and properly. In this regard, the Court observed as follows:
"30. ... However, this kind of "remote control"
would not make NALCO the employer of these workers. This only shows that since NALCO is shouldering and meeting financial deficits, it wants to ensure that the money is spent for the rightful purposes."
61. Thus, it can be concluded that the relevant factors to be taken into consideration to establish an employeremployee relationship would include, inter alia, (i) who appoints the workers; (ii) who pays the salary/remuneration;
(iii) who has the authority to dismiss; (iv) who can take disciplinary action; (v) whether there is continuity of service; and (vi) extent of control and supervision, i.e. whether there exists complete control and supervision. As regards, extent of control and supervision, we have already taken note of the observations in Bengal Nagpur Cotton Mills case (2010 AIR SCW 7312) (supra), the International Airport Authority of India case (AIR 2009 SC 3063 :
2009 AIR SCW 4926)(supra) and the NALCO case (supra)."
27. The law, thus, on the subject is very clear as discussed above. The proper test for determining the vexed issues, which have come before this Court requires an integrated approach where some of the basic questions to be addressed are of the status and relationship of workers and of the management in such organisation and the extent of control and supervision of management, nature of establishment and nature of work etc. Page 46 of 55 HC-NIC Page 46 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT
28. This Court notices that respondent No.2 runs the consumer store in the name and style of "Saurashtra Cooperative Societies", which is a registered society registered under the Gujarat Cooperative Societies Act. It provides essential commodities at reasonable prices to all its members and the members are the employees of the erstwhile State Bank of Saurashtra and now the State Bank of India. It is also not in dispute that all employees, who are respondents herein, had been taken up as classIV and ClassIII employees, two of them as weighman and one as a salesman. The year of joining the said canteen is also 1978, 1984 and 1990 respectively of each of the respondents. The bank runs welfare activities for its employees and the said store has been started for welfare and benefits of the bank employees.
29. The Managing Director of the Bank is Chairman of respondent No.2Consumer Store and the Manager or the Accountant of the store are Page 47 of 55 HC-NIC Page 47 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT appointed by the petitionerBank. The land, building, fixtures and furniture as well as stationary are provided by the Bank. All these employees of the store have been appointed on compassionate basis.
30. The question that would arise in the instant case is whether there exist relationship of master and servant between the respondent and Bank and whether it was compulsory for the Bank employees to become members of the consumer store and whether there was any statutory obligation on the part of the Bank to run the cooperative society, which is a consumer store for providing essential commodities at a reasonable rate.
31. If one applies the tests laid down by the judgment of National Aluminium Co.Ltd. vs. Ananta Kishore Rout, (2014) 6 SCC 756 and also the judgment rendered in the case of Balwant Rai Saluja and another vs. Air India Limited and others, (2014) 9 SCC 407, in absence of any statutory obligation of the Bank to run Page 48 of 55 HC-NIC Page 48 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT cooperative societies, it can be unhesitatingly held that none of the tests laid down in the judgment of National Aluminium Co.Ltd. (supra) and Balwant Rai Saluja(supra) gets satisfied in case of any of these respondents.
32. The first and foremost is the issue of appointment. The respondents when were taken up, their appointments were made by the Executive Committee of Store. Even if the Store Manager is one of the members and a regular employee of the bank that ipso facto would not make him authorised to employ anyone as an employee of Bank. By very constitution of the said society/store member could be only the employee of the Bank. No procedure is followed of public employment, those respondents were taken up on random basis. Neither wireman nor salesmen needed to clear any test. Undisputedly, their appointment had been made under the signature of the President of Consumer Cooperative Societies and, on monthly basis, their salary had been given by the Cooperative Society which is a separate entity in the eyes of law for having Page 49 of 55 HC-NIC Page 49 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT been registered under the Gujarat Cooperative Societies Act, 1961.
33. The Cooperative store was registered on 29.7.1965 under the Gujarat Cooperative Societies Act. A separate body maintains and also administers the said store. Even if bank employees form part of such a body, that does not become synonym of the authorised panel as body of Bank for recruitment of employees, nor would be membership of employees of the Bank in the store bring the same under the canteen of Bank directly. Again, the profits of the society as per the details are to be distributed to the share holders in accordance with the byelaws. A Managing Committee to be constituted with not less than six and not more than nine share holders and the said Managing Committee has absolute rights to manage the society as per the byelaws. Any person serving the branch of Bank and who purchases minimum one share and abide by byelaws, becomes the member of the Society.
34. Thus, the staff of the petitioner Bank has Page 50 of 55 HC-NIC Page 50 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT established the said cooperative store and appointment made of the respondents by the Managing Committee would be governed by the bye laws of the said Cooperative Society.
35. This Society being a separate entity as per the law, the Tribunal erred seriously in disregarding well laid down plethora of decisions while holding respondents as workmen of petitioner Bank. Absorption of two employees of the store in the Bank also cannot be held as a precedent as the reasons for the same have been well explained by the petitioner.
36. Providing facilities by the petitionerBank for running the canteen in terms of availing land, building fixtures and furnitures as well as stationary etc. would not mean that the tests provided in the case of National Aluminium Co.Ltd. (supra) and Balwant Rai Saluja(supra) would get satisfied nor would the ratio laid down in the decision rendered in the case of State Bank of India and others vs. State Bank of India Canteen Employees' Union (Bengal Circle) and Page 51 of 55 HC-NIC Page 51 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT others(supra)would apply to the facts of instant case. The case of the petitionerBank is squarely covered by the decisions rendered in the case of Union of India vs. Southern Railway Employees' Coop. Stores Workers' Union (supra) and the decision rendered in J.V.Subhaiah (supra) so also of Ratan Kansa Banik's case (supra). The mere fact that to encourage the store of the employees to run smoothly if certain support is lent which facilitates smooth functioning, that in no manner would lead to conclusion that the Bank had either legal or statutory obligation to run the cooperative store nor would that establish any control of Bank on such store.
37. At this stage, reference needs to be made of the fact that the judgment and order passed by the Industrial Tribunal is essentially based on the decision rendered in the case of Indian Overseas Bank (supra). In the opinion of this Court, the Tribunal has allowed the reference in favour of the respondent employee disregarding the strong factual matrix existing in this matter. As is quite apparent from the decision Page 52 of 55 HC-NIC Page 52 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT of the Indian Oversees Bank(supra), the promoters were appointed from the permanent employees for a period of one year. Another committee was nominated at the end of one year by the Bank and promoters were looking after the day to day supervision of the canteen. The management had taken upon itself the entire responsibility of providing canteen facilities. It was also provided with basic facilities like building, utensils, furniture etc. supply of food stuff at subsidised rates. The Bank also provided subsidy for meeting the salary of canteen facilities and were incurring the cost of electricity, water supply etc. which had been given in the canteen.
In essence, it was run by the funds of the Bank.
The canteen was exclusively used by the Bank staff and the management committee did not contribute anything for running the canteen. The recruitment of the staff also was by the staff of the Bank. The railway establishment manual and other material had allowed the Court to conclude that not only there was a complete supervision and control of the Bank on the working of the Page 53 of 55 HC-NIC Page 53 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT canteen, there was a statutory and legal obligation to run the same.
38. This Court is conscious that ordinarily no interference is desirable in the decision of Tribunal except for correcting errors of jurisdiction committed by Tribunals or the orders are without jurisdiction or in excess of it or acts illegally as held by the Constitution Bench in case of Syed Yakoob vs. K.S. Radhakrishnan and others, AIR 1964 SC 477. Considering the material on record and in wake of the well established ratio on the subject, unhesitatingly, it can be held that the Tribunal failed materially in applying the law on the subject to the facts on hands. This serious evasion would warrant interference at the hands of this Court and issuance of writ of certiorari would be necessary in these set of circumstances.
39. In absence of any of these elements existing in the present case, in the opinion of this Court, the Tribunal erred in granting the status of workman of Bank to the staff of the Employees Page 54 of 55 HC-NIC Page 54 of 55 Created On Wed Aug 16 04:32:07 IST 2017 /*C/SCA/15460/2011 JUDGMENT Consumer Cooperative Stores Ltd. The award dated 30.6.2010 passed in Reference I.T.C(New) NO.5 of 2009 by the Tribunal is quashed and set aside.
Petition is allowed in above terms. Rule is made absolute accordingly. No order as to costs.
(MS SONIA GOKANI, J.) SUDHIR Page 55 of 55 HC-NIC Page 55 of 55 Created On Wed Aug 16 04:32:07 IST 2017