VST
Industries Ltd. Vs. VST Industries Workers Union
& ANR [2000] INSC 629 (7 December 2000)
S R Babu,
S N Variava
L.I.T.J
RAJENDRA BABU, J. :
Civil
Appeal No. 670 OF 1997 The appellant is a company incorporated under the
Companies Act, 1956 with the object of manufacture and sale of cigarettes.
Members of general public are the shareholders and the shares of the company
are traded in through various stock exchanges in the country. A petition was
filed under Article 226 of the Constitution by respondent No.1 seeking for a
writ of mandamus to treat the members of the respondent- union who are
employees working in the canteen of the appellants factory as employees of the
appellant and for grant of monetary and other consequential benefits. The
canteen is provided in the factory premises of the appellant pursuant to
Section 46 of the Factories Act, 1948 [hereinafter referred to as the Act],
which obliges a factory employing more than 250 workmen to provide such a
canteen. On behalf of the respondents, it is contended that the appellant had
been managing the canteen up to the year 1982 and thereafter introduced the
contract system for maintaining the canteen so established; that though the
management of the canteen had been entrusted to the contractors from time to
time, the personnel employed in the canteen were retained by all the
contractors and they have been paid salaries through contractors; that the
workmen employed in the canteen have been provided with ESI benefits under the
Code No. VST, the appellant, and benefits arising under the Employees Provident
Funds Act are also provided similarly; that the appellant has also provided a
building along with furniture, utensils, cutlery, gas, electricity, water supply
and other facilities; that the contractor is engaged only to prepare the food
and serve it to the employees and that the quality of the food and the rates
are controlled by the management of the appellant.
On
behalf of the appellant, contention was raised that no writ would lie against
the appellant inasmuch as the appellant is a company, which is not an authority
or a person against whom a writ would lie. It was submitted that they do not
discharge any public duty and hence the writ cannot be issued. On the merits of
the matter, the appellant disputed various questions of fact and urged that the
decision of this Court in Parimal Chandra Raha vs. Life Insurance Corporation
of India, 1995 Supp. (2) SCC 611, would not
be applicable to the appellant in the facts and circumstances of the case. The
learned Single Judge, who decided the matter in the first instance, held that a
writ would lie against a company under a private management following the
decision in T. Gattaiah vs. Commissioner of Labour, 1981 [II ] LLJ 54, in which
it was held that establishment of a canteen and its maintenance is a statutory
requirement; under Section 46 of the Act a public duty is imposed on the
company to establish and maintain the canteen; inasmuch as members of the
respondent-union are working in the canteen they are entitled to seek a
mandamus.
He,
therefore, held that when a public duty is called upon to be discharged by a
private management, a writ of mandamus would lie and could be issued under
Article 226 of the Constitution. He thus rejected the contention.
On the
merits of the matter, the learned Single Judge followed the decision in Parimal
Chandra Rahas case holding that when the duty had been enjoined on the
appellant to provide and maintain a canteen facility under the Factories Act it
becomes the obligation of the appellant to establish a canteen and that is what
the appellant had done.
Therefore,
when that work is got done through somebody else by providing the necessary
infrastructure and other facilities, when the personnel did not change though
the contractors changed from time to time, he held that they become employees
of the appellant. On that basis the learned Single Judge granted reliefs sought
for by the respondents, however, imposing certain restrictions with regard to
the age, being medically fit, on the date of the writ petition, had put in a
minimum of three years of continuous service and such service prior to the
attainment of the minimum qualifying age under the company should be ignored.
On
appeal, the Division Bench of the High Court affirmed the view taken by the
learned Single Judge. The Division Bench referred to their decision in Rakesh
Gupta vs. Hyderabad Stock Exchange Ltd. Hyderabad & Ors., AIR 1996 AP 430,
that a writ in the nature of mandamus, certiorari and prohibition are recognised
as public law remedies and are not available to enforce private law rights.
However, noticing that the expression any person or authority used in Article
226 of the Constitution should not be confined only to statutory authorities
and instrumentalities of State but would cover any other person or body
performing public duty. The form of the body concerned is not very much
relevant. What is relevant is the nature of the duty imposed on that body. The
duty must be judged in the light of positive obligation owed by the person or
authority to the affected party, no matter by what means the duty is imposed.
On that basis, the Division Bench of the High Court dismissed the writ appeal. Hence
this appeal.
On
behalf of the appellant contention put forth at the forefront is that a writ
would not lie against the appellant inasmuch as the appellant is engaged in the
manufacture and sale of cigarettes and as an incident thereto has provided a
canteen to its workmen pursuant to an obligation under Section 46 of the Act. Shri
S. Ganesh, learned counsel for the appellant, pressed into service the decision
of this Court in Anadi Mukta Sadguru Shree Muktajee Vandas Swami Survarna Jayanti
Mahotsav Smarak Trust & Ors. vs.
V.R.Rudani
& Ors., 1989 (2) SCC 691, to contend that mere running of a factory to
manufacture and sell of cigarettes can never be considered to be a public duty
much less an incident thereto such as providing a canteen to its workmen.
On
behalf of the respondent, heavy reliance was placed on this decision and also
the decision of the High Court in T.
Gattaiahs
case, to contend that in running a canteen under Section 46 of the Act, the
appellant was discharging a public duty and, therefore, a writ of mandamus
would lie against it.
In Anadi
Muktas case, the contention, similar to the present case, had been raised. Writ
petitioners were seeking for a writ of mandamus to put them back in the college
and they were claiming only a terminal benefit or arrears of salary payable to
them. In that background, it was observed that if the rights are purely of a
private character no mandamus could be issued and also, if the management of
the college were purely a private body with no public duty mandamus would not
lie. In that case, the respondent was managing the affiliated college to which
public money is paid as Government aid which played a major role in the
control, maintenance and working of educational institutions. The aided
institutions, it was noticed, like Government institutions discharge public
function by way of imparting education to students. They were subject to the
rules and regulations of the affiliating University and their activities were
closely supervised by the University authorities. Employment in such institutions,
therefore, is not devoid of any public character inasmuch as the service
conditions of the academic staff were controlled by the University particularly
in regard to their pay scales and the protection by University decisions
creating a legal right or duty relationship between the staff and the
management. When there is existence of such relationship mandamus could not be
refused to such an aggrieved party.
It was
further explained in that decision that the term authority used in Article 226
of the Constitution should receive a liberal meaning unlike the term in Article
12, which is only for the purpose of enforcement of fundamental rights under
Article 32. The words any person or authority used in Article 226 are,
therefore, not be confined only to statutory authorities or instrumentalities
of the State but would cover any other person or body performing public duty.
The form of the body concerned is not very much relevant. What is relevant is
the nature of the duty imposed on that body. The duty must be judged in the
light of positive obligation owed by the person or authority to the affected
party, no matter by what means the duty is imposed, if a positive obligation
exists, mandamus cannot be denied.
In De
Smith, Woolf and Jowells Judicial Review of Administrative Action, 5th Edn., it
is noticed that not all the activities of the private bodies are subject to
private law, e.g., the activities by private bodies may be governed by the
standards of public law when its decisions are subject to duties conferred by
statute or when, by virtue of the function it is performing or possibly its
dominant position in the market, it is under an implied duty to act in the
public interest. By way of illustration, it is noticed that a private company
selected to run a prison although motivated by commercial profit should be
regarded, at least in relation to some of its activities, as subject to public
law because of the nature of the function it is performing. This is because the
prisoners, for whose custody and care it is responsible, are in the prison in
consequence of an order of the court, and the purpose and nature of their
detention is a matter of public concern and interest. After detailed
discussion, the learned authors have summarized the position with the following
propositions:
(1)
The test of whether a body is performing a public function, and is hence
amenable to judicial review, may not depend upon the source of its power or
whether the body is ostensibly a public or a private body. (2) The principles
of judicial review prima facie govern the activities of bodies performing
public functions. (3) However, not all decisions taken by bodies in the course
of their public functions are the subject matter of judicial review. In the
following two situations judicial review will not normally be appropriate even
though the body may be performing a public function:
(a)
Where some other branch of the law more appropriately governs the dispute
between the parties. In such a case, that branch of the law and its remedies should
and normally will be applied; and (b) Where there is a contract between the
litigants. In such a case the express or implied terms of the agreement should
normally govern the matter. This reflects the normal approach of English law,
namely, that the terms of a contract will normally govern the transaction, or
other relationship between the parties, rather than the general law. Thus,
where a special method of resolving disputes (such as arbitration or resolution
by private or domestic Tribunals) has been agreed by the parties (expressly or
by necessary implication), that regime, and not judicial review, will normally
govern the dispute.
The
High Court has relied very strongly on the decision of a learned Single Judge
in T. Gattaiahs case wherein it was stated that a writ may lie under Article
226 of the Constitution against a company incorporated under the Companies Act,
1956 as it is permissible to issue a writ against any person. Prima facie,
therefore, a private person or an incorporated company cannot be taken out of
the sweep and the contemplation of Article 226 of the Constitution. That
decision does not take note of the fact as to the nature of the functions that
a person or an incorporated company should be performing to attract judicial
review under Article 226 of the Constitution. In Anadi Muktas case this Court
examined the various aspects and the distinction between an authority and a
person and after analysis of the decisions referred in that regard came to the
conclusion that it is only in the circumstances when the authority or the
person performs a public function or discharges a public duty Article 226 of
the Constitution can be invoked. In the present case, the appellant is engaged
in the manufacture and sale of cigarettes. Manufacture and sale of cigarettes
will not involve any public function.
Incidental
to that activity there is an obligation under Section 46 of the Act to set up a
canteen when the establishment has more than 250 workmen. That means, it is a
condition of service in relation to a workman providing better facilities to
workmen to discharge their duties properly and maintain their own health or
welfare. In other words, it is only a labour welfare device for the benefit of
its work force unlike a provision where Pollution Control Act makes it
obligatory even on a private company not to discharge certain effluents. In
such cases public duty is owed to the public in general and not specific to any
person or group of persons. Further the damage that would be caused in not
observing them is immense. If merely what can be considered a part of the
conditions of service of a workman is violated then we do not think there is
any justification to hold that such activity will amount to public duty. Thus,
we are of the view that the High Court fell into error that appellant is
amenable to writ jurisdiction.
This
Court in Indian Petrochemicals Corporation Ltd.
& Anr.
vs. Shramik Sena & Ors., 1999(6) SCC 439, referred to the decisions in Parimal
Chandra Rahas case, Reserve Bank of India vs. Workmen, 1996 (3) SCC 267, and M.M.R.Khan
vs. Union of India, 1990 Supp. SCC 191, and held that the workmen of a
statutory canteen, as in the present case, would be workmen of an establishment
for the purposes of the Act only and not for other purposes. Thereafter, this
Court further examined whether the material on record would show that the
workmen are employees of the management for all purposes and adopted some of
the tests as follows:
1. The
canteen has been there since the inception of the appellants factory. 2. The
workmen have been employed for long years and despite a change of contractors
the workers have continued to be employed in the canteen. 3.
The
premises, furniture, fixture, fuel, electricity, utensils, etc. have been
provided for by the appellant. 4.
The
wages of the canteen workers have to be reimbursed by the appellant. 5. 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. 6. 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. 7. The workmen have the
protection of continuous employment in the establishment.
In the
present case, the findings recorded by the learned Single Judge on examination
of the facts available is that there had been a canteen within the premises of
the appellant up to the year 1982 and it is only from 1982 onwards the management
of the canteen has been entrusted to a private contractor; that even after
change of the contractor, the canteen workers have continued to be the same
irrespective of the change in the contractors from time to time; that wages
were paid to the workmen in the canteen by the management through the
contractor; that the appellant has provided the accommodation, furniture, fuel,
electricity, utensils, etc.; that the management exercises control over the
standard in quality, quantity and the rate of the food items supplied to the
workmen for whose benefit the canteen is established. Thus, these circumstances
clearly indicate that the appellant has a complete control over the activities
in respect of the canteen and the contractor has absolutely no discretion
either in regard to the menu, quality and quantity of the food items much less
the rate at which the same are supplied to the workmen.
When
the management of the appellant exercises such a complete control, the canteen
shall be deemed to be run by the management itself. The appellant in any manner
cannot controvert these facts.
We do
agree that the respondents have a strong case on merits. Since we have held
that the High Court had no jurisdiction to entertain a petition under Article
226 of the Constitution, we would have set aside the order made by the High
Court. However, in the special features of the case, although we do not agree
with the High Court on the first question raised, we feel, after clarifying the
legal position, that we should not disturb the decision given by the High
Court.
The
appeal, therefore, stands dismissed subject to what is stated in regard to
writs to be issued by the High Court in respect of persons or authorities
exercising public duty or otherwise. No costs.
Civil
Appeal Nos. 6533/97 & 6534/97 In these appeals, on a reference made on the
question whether certain persons employed in the canteen should be treated as
employees of the appellant and, if so, in what category they are to be fitted
in and to what wages they are entitled to, the Industrial Tribunal, Hyderabad,
[hereinafter referred to as the Tribunal] inquired into the matter. The
contesting respondents contended that the workmen in the canteen had been
working right from its inception, that is, since 1967; that from 1976 onwards,
after expiry of the contract with the Industrial Catering Services, they had
been directly working with the appellant without any contractor; that they
sought for regularization of their services by letter dated 28.2.1978; that the
said letter was corrected and redrafted by the Personnel Manager to indicate
the idea of floating an Association/Society to run the canteen; that this
modified request contained in Ex.W-49 was stated to be contradictory to the
stand taken by the workmen all through. The Tribunal concluded that there was
no doubt that the Personnel Manager modified Ex.W-50 and obtained Ex.W-49 in
the modified form. The Tribunal held against them, as there was no material to
show that the management had discussed on each point and thereafter an
agreement had been drafted. The Tribunal recorded the findings that the canteen
had been working for the benefit of the workmen within the premises provided by
and with the equipment supplied by the appellant; that the appellant supplies
the provisions for the preparation of foodstuffs;
that
the appellant issues token to the employees, who on production of the same
obtain foodstuffs from the canteen;
that
the Committee appointed by the appellant decides the menu and as per the
directions and supervision of the Catering Officer, the canteen functions; that
the quality and quantity of the foodstuffs is supervised by him, who functions
under the Committee. The contributions like ESI, Provident Fund, etc. had also
been categorically specified to be provided by the appellant and ESI code for
the permanent establishment and for the present workmen was the same; that
after the evidence was tendered by the workmen the appellant got the code
changed and the appellant transferred the workmen from one place to another and
that the amount to be surrendered by way of unpaid salaries had to be remitted
back to the management. Thus the Tribunal held that these facts clearly
indicated that the appellant exercised administrative, financial and
disciplinary control over the workmen in question. The Tribunal held that no
other material is required to hold them to be employees of the appellant. In
those circumstances, the Tribunal passed an award that these workmen should be
treated as employees of the appellant and they are entitled to payment of
appropriate scales and designations in terms of Ex.W12 and W14 from 1.4.1979
with all consequential and attendant benefits of arrears of pay, etc. together
with counting of entire service for the purpose of terminal benefits.
Against
this award, a writ petition was filed before the High Court. The High Court
dismissed the same stating that it is covered by another matter. It is
unnecessary to examine the contention whether the matter is covered by a
subsequent decision or not as the facts of the present case stand on its own.
The reference had been made to the Tribunal and adjudication had been made by
the Tribunal as to the status of the workmen, the nature of employment, control
exercised by the appellant, which leave no room for doubt that they are the
employees of the appellant.
A
contention is also sought to be made that it is not possible to run a canteen
in the refinery area. It is contended that under the Petroleum Rules framed
under the Petroleum Act, 1934, there are certain hazardous areas where there
cannot be a canteen as no fire, furnace, source of heat or light capable of
igniting inflammable vapours shall be allowed except in the firing spaces or
stills and boilers. However, there is no material on record to show that the
canteen is located in such an area where it would be hazardous to have a fire,
furnace, source of heat or light to cook food. In the absence of such material,
we find no substance in this contention. It is brought to our notice that a
fire had taken place on a tank on 14.9.1997 and that it was extinguished after
14 days, which severely damaged all the building including the canteen and that
food and beverages being provided to its employees by making an arrangement to
obtain the same from outside the premises of the appellant. These facts are
brought to our notice by an affidavit filed on 21.11.2000. But these factors do
not come in the way of the award made by the Tribunal, as it is possible to
locate the canteen in an appropriate place where there is no hazard of the kind
envisaged under the Petroleum Rules. This contention is also rejected.
In the
circumstances aforesaid, the contention vis-à-vis the findings recorded by the
Tribunal, we find absolutely no merit in these appeals and the same shall stand
dismissed. No costs.
Back