All
India Railway Institute Employees' Association Vs. Union of India [1990] INSC
62 (27 February 1990)
Sawant,
P.B. Sawant, P.B. Misra Rangnath Ramaswamy, K.
CITATION:
1990 AIR 952 1990 SCR (1) 594 1990 SCC (2) 542 JT 1990 (1) 319 1990 SCALE
(1)295
ACT:
Railway
Institutes and Clubs--Employees--Whether enti- tled to be treated on par with
employees in Statutory Can- teens run by Railway Administration.
HEAD NOTE:
This
petition under Article 32 of the Constitution of India has been filed by an
Association of about 2,000 em- ployees working in 500 Railway Institutes and
Clubs in various parts of the country claiming that they should be treated on
the same par as the employees in the Statutory Canteens run by the Railway
Administration. In support of their claim the petitioners while enumerating the
range of activities handled by them, they have attempted to draw a parallel
with the regular employees contending inter alia that not only they receive
grants-in-aid and a number of facilities from the Govt., the Railway Board has
always treated these institutes and clubs as an integral part of the Railways.
The
Respondents resisted the petition stoutly and con- tended that the Institutes
and Clubs are managed by a Com- mittee representing its membership which engages
such staff as is required and meets the cost of their wages and allow- ances
etc., that the Railways are not the principal employ- ers of their staff, that
they are not paid directly from the Consolidated Fund of India and whatever
facilities are provided to them they are confined to the wholetime staff as a
special case and not on account of any obligation under any law. On
consideration of respective contentions and documents on record while
dismissing the petition, this Court.
HELD:
There is a material difference between the can- teens run in the Railway
establishments and the Institutes and Clubs. The Institutes/ Clubs have to run
on the member- ship 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/Club at the rate of 595 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 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 non-statutory recognised
canteens. [600H] 160 [E-F & G] On the facts, it cannot be held that there
is a rela- tionship of employer-employee between the Railway Adminis- tration
and the employees engaged in the Institutes and Clubs. Neither law nor facts
spell out such relationship. If the present service conditions of these
employees are unsat- isfactory, the remedy lies elsewhere. [603B-C]
CIVIL
ORIGINAL JURISDICTION: Writ Petition No. 1389 of 1987.
(Under
Article 32 of the Constitution of India).
G. Ramaswamy,
Additional Solicitor General, M.K. Rama- murthy, Mrs. Shyamala Pappu, K.K. Venugopal,
Gobind Mukhoty, M.A. Krishnamurthy, Ms. Chandan Ramamurthy, Dalveer Bhand- ari,
C. Ramesh, G.D. Gupta, L.K. Gupta, G. Venkatesh Rao, Ms. A Subhashini, Ms. Susma
Suri, C.V.S. Rao, P. Parmeshwa- ran, Mrs. Urmila Kapoor, Krishna Prasad, Indra Makwana
and S.K. Jain, for the Appearing Parties.
The
Judgment of the Court was delivered by SAWANT, J. This petition is filed as
stated in the petition by an Association of about 2,000 employees working in
500 Railway Institutes and Clubs in various parts of the country. Their grievance,
as in the case of the petitioners in the matters pertaining the Railway
Canteens, is that they are not treated as railway employees. It is their case
that although the Institutes/Clubs in which they work are non- statutory, they
are on par with the employees in the statu- tory canteens run in the Railway
establishments proper.
According
to them, the Railway Institutes and Clubs were set up to provide recreational
facilities to the railway employ- ees. They are managed by Committees
consisting of represen- tatives of all the members of the Institutes/Clubs
elected periodically. The Institutes/Clubs have the following cate- gory of
employees:
(1)
Manager
(2)
Accountant
(3)
Clerk
(4)
Librarian in- 596 charge
(5)
Librarian
(6)
Watchman
(7) Daftry
(8)
Watermen
(9)
Canteen employees
(10)
Billiards Marker etc.
These
employees are appointed by the Committee and their salaries are paid out of the
contributions received from the members of the respective Institutes/ Clubs and
the grants-in-aid given by the Railway Board to the Institutes/Clubs. The
Committees of management is presided over by a president who is the concerned
Divisional Railway Manager or his nominee.
The
Railway Administration has the right to dissolve or to from an ad-hoc Committee.
2.
According to the petitioners further, the Railway Board has always treated the
Institutes and Clubs as an integral part of the Railways, since they not only
receive grants-in-aid but also other facilities from .the Govern- ment. Section
B of Chapter XXVIII of the Railway Establish- ment Manual makes a special
provision for the Institutes and Clubs. Paragraph 2808 of the Manual states
that a Railway Institute should be looked upon as a club provided by the
Railway, rent free for the benefit of its employees and therefore, the Railway
should provide everything which a landlord ordinarily would, and the Institute
should pay for all that a tenant would usually be liable to pay. Paragraph 2809
states that the Railway Administration will bear (a) the first cost of the
building including the cost of elec- tric installations with necessary
furniture, roads, fences, tennis courts and other play-grounds. Wherever
possible a garden will also be provided; (b) the cost of maintenance and
alterations.
In the
case of tennis courts and play-grounds the Rail- way Administration will bear
only the cost of ordinary engineering repairs. The said paragraph however
requires that the Institute funds should bear
(a) the
cost of roll- ing, watering, grass-cutting and other maintenance charges of
play-grounds, other than engineering repairs;
(b) the
cost of maintenance of its gardens and ornamental grounds;
(c) the
cost of maintenance and renewal, whether partial or complete, of electric
installations (which include electric fans) payable at a flat rate of 5 per
cent per annum on the capital cost of the installations;
(d) the
cost of electric current consumed and hire of meter;
(e)
the occupier's share of municipal taxes for specific direct services rendered
to an Institute by a municipality such as conservancy, water and the like taxes
as distinct from taxes of a general nature;
(f) water
charges calculated at so much per tap, each Railway Administration fixing its
own scale of charges.
In
cases where large quantities of water are supplied by the Railway
Administration, as in the case of swimming baths, the actual cost of water
supplied should be recovered. Para- 597 graph
2810 provide that:
(i) no
rent is recoverable in the case of Railway buildings used as officers' club
provided conditions stipulated para 1942-E are fulfilled;
(ii) no
rent is recoverable in the case officers' clubs if the buildings are specially
constructed against amounts specifi- cally sanctioned by the Railway Board
(iii)
no rent is recoverable in the case of clubs, if additional expenditure is
incurred in converting an existing building into a club or providing anciliaries
to make it suitable as a club. if the expenditure is incurred with the specific
approval of the Railway Board and
(iv) no
rent is recoverable in the case of clubs where the building is erected by the
club at its costs on Railway land. Paragraph 28 11 further provides that: Class
IV staff employed in Railway Institutes may be given residential accommodation
free of rent provided such accommodation is either part and parcel of the
Institute building and its recognised out-houses, or is not required for any
other railway purpose, or cannot be rented to out- siders and would otherwise
lie vacant. According to para- graph 28 13 the membership of the Institute/Club
is option- al. Paragraph 28 17 gives powers to the respective General Managers
to frame rules to suit local requirements of the Railway Administrations and
other circumstances of the place.
The
employees of the Institutes/Clubs are entitled to free passes, and to get
medical facilities provided by the Railway Hospitals. The employees belonging
to Class IV are eligible for absorption in the Railways and for that purpose
they are given relaxation in age.
The
petitioners, therefore, claim that they should be treated on the same par as
the employees in statutory can- teens and non statutory canteens there being no
difference in their status.
3. The
petition is resisted on behalf of the respondent Union of India. According to
the respondents, the Institutes and Clubs have their origin in the rules
regarding Staff Benefit Fund which is provided for in Chapter VIII of Rail- way
Establishment Code Vol. 1 (1985 edition). According to the rules contained in
this Chapter as clarified/ modified by the administrative instructions from
time to time. the main objectives of the Fund are to provide additional ameni-
ties to the railway servants and their families in the sphere of education,
recreation, relief to the distressed, financial assistance during sickness and
development of sports and scouting activities. The Fund consists of contri- bution
from Railway revenues at the rate of Rs. 14 per capita of the sanctioned
strength of non-gazetted employees as on 3last March of each year. The contribution
of Rs. 14 is broadly apportioned amongst 598 various spheres of activities as
under:
(i) (a)
Education 2.50 (b) Recreation other than sports 2.00 (c) Relief of distress,
sickness etc. 3.50 (d) Miscellaneous items 0.50
(ii)
Sports activities 2.50
(iii)
Scouts activities 1.00
(iv)
Recreational facilities to officers 2.00 and supervisory staff According to the
respondents further, as per the provi- sions of the Railway Establishment Code
and the Establish- ment Manual, the Institutes and Clubs are managed by a
committee representing its membership. It is the Managing Committee which
engages such staff as is required and meets the cost of their wages and
allowances. The conditions of service including the scales of pay of the staff
are decided upon by the respective Managing Committees and hence they vary from
Institute to Institute and Club to Club. The cost of the staff running the
institute including the pay bill of the staff is met by the Managing Committee
from membership fees and from grants received from the Staff Benefit Fund.
As
will be evident from the apportionment of the per capita grant among the
various activities, only a sum of Rs.4 per capita comes to the share of the
recreational facilities.
The
funds available for recreational facilities are further limited because the
membership of the Institutes/Clubs is optional. These facilities further, in
the nature of things, are availed of by the members for a few hours beyond
working hours. The Managing Committees therefore, engage only part- time staff.
They engage full-time staff only when it is considered absolutely necessary.
There are about 449 Insti- tutes and 332 Clubs and they have engaged about 1741
employ- ees of whom about 887 are on full time basis, the rest being engaged on
part time basis. The whole-time employees are allowed passes and Privilege
Ticket Orders on a restricted scale in terms of para 1526 of the Railway
Establishment Manual.
It is,
therefore, contended on behalf of the respond- ents, that the Railways are not
the principal employers of the staff engaged in the Institutes/Clubs and they
have no control whatsoever on it. The staff is not paid directly from the
Consolidated Fund of India. Whatever facilities are provided to the whole-time staff
are provided only as a 599 special case, and not on account of any obligation
under any law. It is also contended that in fact it is the Managing Committees
who have engaged the staff and they ought to have been joined as parties to the
petition. The respondent Union of India having no relationship with the
employees, the petition is liable to be dismissed on account of non-join- der/mis-joinder
of parties. The respondent have also ques- tioned the locus standi of the
present Association to file the petition since according to them no such
Association exists.
4. The
respondent further point out that the Managing Committees of the
Institutes/Clubs do not receive any subsi- dy or loan from the Railways for
meeting specifically the wage bill of the employees as do the Managing Committees
of the statutory/non-statutory recognised canteens and, there- fore, the
present employees stand on a different footing than that of the employees in
the statutory/non-statutory recognised canteens. In reply to the contention of
the petitioners that the rules framed for the constitution of Managing
Committees of the Institutes/Clubs give power to the Railway Administration to
dissolve the Managing Commit- tees or to appoint ad hoc Committees, it is
pointed out that these rules are framed locally by General Managers of Zonal
Railways, Production Units etc. in terms of the provisions contained in para
2817 of the Establishment Manual. They are not uniform and not all rules so
framed provide for either the dissolution of the Managing Committee or appointment
of ad hoc Committee by the Railway Administration. The respond- ents also deny
that the Railway Board has treated Insti- tutes/Clubs as an integral part of
the Railways. It is also pointed out that the Railway free-passes and privilege
ticket orders are given only to the full time employees as a special case. But
even they are given on a restricted scale.
As
regards the medical facilities, again, it is pointed out that it is given to
the employees and not to their family members or dependent relatives. As
regards the facilities of absorption in the Railways by relaxing the age limit,
the respondent points out that it is not only this staff but also the staff of
cooperative societies, canteen commission bearers, vendors of departmental
canteen who are eliteble for such relaxation in age limit to the extent of the serv-
ice rendered in such organisation whichever is less, for appointment in Group D
categories. But they have to appear before Railway Service Commissions/Railway
Recruitment Board alongwith casual labourors and substitutes, and they are
considered only after the eligible casual labourers and substitutes are
considered. It is lastly submitted on behalf of the respondents that although
there is no obligation on the Railways, the Railways have issued administrative
in- structions to the Zonal Railways etc. that whenever it is found 600
absolutely necessary by the Managing Committees of the Institutes/ Clubs to
employ staff on full time basis they should be paid remuneration keeping in
view the local market conditions.
5. It
is also the contention of the respondents that the Railways are providing
financial assistance/grants-in-aid for various non-welfare activities and to
non-railway agen- cies such as private schools run in the railway colonies, cooperative
societies/banks etc. Since the employees engaged in these
activities/non-railway organisations do not ipso facto become railway servants,
the employees of these Insti- tutes/Clubs can also not become the railway
employees for the same reason. The service in the railway Institutes/Clubs is
purely in the nature of private employment. On the other hand, the railway
employees are recruited according to the rules of recruitment. They are
subjected to rigorous stand- ards with regard to age limit, educational
qualifications, medical fitness, interviews, character verification etc. as
well as to stiff competition. To treat the employees in Railway
Institutes/Clubs as railway-employees would amount to a back-door entry of
these employees to Government serv- ice without following the regular
procedure. It is also contended by them that the letters of appointment offered
to these employees by the respective Managing Committees make it clear that
they are not to be treated as railway serv- ants. For all these reasons, these
employees form a separate class and they are not comparable with any other
category of staff of the Railways. It is also submitted on behalf of the
respondents that the analogy of the employees in railway canteens is not
applicable to these employees because the status of the canteen employees is
itself being contested by the respondents. It is lastly contended that if this
Court deems it proper to treat the full time employees of the Institutes/Clubs
as railway servants it will have to be left open to the Respondents to frame
such rules as it considered necessary for the efficient running of the
Institutes/Clubs and for engaging such staff as are considered necessary. If
the employees concerned are then directed to be absorbed only subject to the
requisite standards of age, educational qualifications etc. and only such of
them as are found suitable, many of the present employees may be faced with
unemployment which will not be in the interests of the employees themselves.
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 601 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 canteen-facilities 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 day-to-day discharge
of their work therefore needs no further emphasis.
Suffice
it to say that the canteen services are today re- garded 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 in- stance, there is no provision either for
subsidy or loan directly from the 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 rele- vant 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.
5-A.
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/ 602 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 activi-
ties, 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 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 neces- sary
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 activi- ties which are otherwise encouraged by the Railway Adminis- tration
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 re- cruitment. 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 adminis- trative 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 snow-bailing
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. 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 presenti 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 unemploy- ment. This is of
course yet a larger related socio-economic consideration.
9. On
the facts placed before us which we have discussed above, we are also not
persuaded to hold that there is a relationship o[ employer-employee between the
Railway Admin- istration and the employees engaged in the Institutes and Clubs.
Neither law nor facts spell out such relationship. If the present service
conditions of these employees are unsat- isfactory, the remedy lies elsewhere.
lO.
Since we are disposing of the petition on merits, it is not necessary to deal
with the legal contentions raised on behalf of the Respondents that the
petitioner Association has no locus standi and that the petition is not
maintain- able for non~joinder and/or misjoinder of the parties.
11. In
the result, we dismiss the Writ Petition and discharge the rule with no order
as to costs.
R.
N.J. Petition dismissed.
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