Union of India & Ors Vs. M. Aslam
& Ors [2001] Insc 3 (4
January 2001)
G.B.Pattanaik,
B.N.Pattanaik Pattanaik,J.
Appeal (civil) 1041 of 1999 Appeal (civil) 1042-1043 of 1999
L.J
Union
of India is the appellant in all these appeals and these appeals are directed
against the orders of different Central Administrative Tribunals. The
respondents are the employees of the Unit- Run-Canteens which provide canteen
facilities to the troops at the unit level.
Applications
before the Central Administrative Tribunals were filed by these employees
claiming benefits as regular defence personnel employees or at least as
civilian employees serving under the Ministry of Defence on the allegation that
the Unit-Run- Canteens are part of the Canteen Stores Department and since the
Canteen Stores Department forms a part of the Government in the Ministry of Defence
there is no reason as to why the Unit-Run-Canteens should not be held to be a
part of Ministry of Defence. On behalf of Union of India the jurisdiction of
the Tribunal was assailed on the ground that these employees cannot be held to
be the Government employees and consequently the Tribunal did not have the
jurisdiction to entertain the applications and decide the grievances of the
employees.
According
to the Union of India the Unit-Run-Canteens are operated by the non-public
funds and the expenditure required to run the Unit Canteens is made out of the
profits earned by the canteens itself and, therefore, so far as the personnel
serving in such canteens, there is no relationship of master and servant
between the Government of India and the employees, and consequently the
applications before the Tribunal should be rejected. The Central Administrative
Tribunals, however, at Jodhpur and Bombay took the view that the Unit-Run-Canteens are the part of Defence
establishment and consequently the holder of a post in the management of such
canteen must be held to be connected with the Defence Services. The Tribunals
examined the relevant provisions made by different personnel providing all
pervasive control with the Ministry of Defence and thus held that there subsist
master and servant relationship between the employees serving in Unit-Run-
Canteens and the Ministry of Defence and, therefore, the Tribunal retains the
jurisdiction to entertain applications and decide those applications in
accordance with law. Mr. Goswami, learned senior counsel appearing for the
Union of India vehemently contended before us, that these Unit-Run- Canteens
are different from the Canteen Stores Department and the salary of the
employees serving in the Unit-Run- Canteens are not paid out of the
Consolidated Fund of India but a fund created at the unit level and profit out
of sales in Unit and Canteens are utilised for the payment of salary as well as
for creating assets of the canteens, and consequently it is not possible to
hold that there exist relationship of master and servant between the employees
serving in these canteens and the Union of India in the Ministry of Defence.
According
to Mr.Goswami, no doubt, some amount of control is vested with the local defence
personnel, be it Army, Air Force or Navy, over the employees serving in
Unit-Run-Canteens, but conferment of such disciplinary control alone will not
clothe the employees with the status of Government servant or servants under
the Ministry of Defence and the Tribunal, therefore, committed serious error in
declaring the status of these employees as Government servants. Mr. Goswami
also strongly relied upon the judgment of this Court in the case of Union of
India and Another vs. Chotelal and others (1999) 1 Supreme Court Cases 554, in
which case this Court has held that the Dhobis in the National Defence Academy,
Khadakwasla are not Government servants, particularly because their salary is
not paid out of the Consolidated Fund of India. According to Mr. Goswami, the
Administrative Tribunals at Allahabad and Punjab and Haryana High Court at Chandigarh have taken contrary view so far as
the status of these Unit-Run- Canteens employees are concerned, and according
to the learned counsel that constitutes a correct view.
Mr. Mohta,
Mr. P.N. Mishra, senior advocates and several other learned counsel appearing
for the respondents, on the other hand contended, that the Central
Administrative Tribunals at Jodhpur and Bombay have taken the correct view with
regard to the status of such employees. According to them the decision of this
Court and the test indicated in the Life Insurance Corporation case would fully
apply to the facts and circumstances of the present case and, as such, there
will be no reason to hold that the employees in the Unit-Run-Canteens are not
the Government servants.
In
order to decide whether the employees serving in the Unit-Run-Canteens can be
held to be Government servants, it is necessary to find out the mode of
appointment of such employees, Rules and Regulations governing the conditions
of service of such employees, fund from which such salary is paid, and other
factors which really determine the existence of relationship of master and
servant between the Government and the employees. In the Defence Services there
are two types of canteens;,
(1)
Canteen Stores Department, and
(2)
Unit-Run-Canteens.
The
Canteen Stores Department was in existence in this country even during pre-
independence days and it has its Head Office and Base Depot in Bombay with 33 Area Depots all over the
country. These Area Depots are the wholesale outlets, which serve Unit-Run
Canteens in their respective zones. The Canteen Stores Department after the
independence from 1948 onwards function as a Department under the Ministry of Defence
initially for 3 years on an experimental basis and later from 1950 has been
working on permanent basis. We are concerned in the present case with the
Unit-Run Canteens and the status of the employees serving therein. As has been
stated earlier, these Unit-Run Canteens under their respective Commanding
Officers in the three services Army, Navy and Air Force get their articles from
the wholesale outlets in Area Depot of the Canteen Stores Department and at
present there exist 3400 Unit-Run Canteens. Prior to the World War II the
retail trade in the Defence Services was in the hands of the contractors.
During
World War II a regular cadre called Indian Canteen Code came to be formed under
the Canteen Services (India) to handle retail trade in
operational areas where contractors were not expected to go. After 1947, the organisation
split into two : Canteen Stores Department (India) and Canteen Stores Department (Pakistan). The retail trade, however, was reverted to the contractors. But by
the early fifties it was realised that the margin of profit between the
wholesale price and the retail rate could be a welcome source of funds
available to commanding officers for welfare purposes. Thus, the concept of
unit-run canteens was born, and contractors were driven out. When Major Gen.
K.S. Thimaya took over as Quarter Master General, he gave detailed thought to
providing canteen facilities to the troops at the unit level. He found that
retail outslts being in the hands of the unit canteen contractors, the margin
between the wholesale price and retail price of goods went to the contractors
whereas the amount in the hands of individual commanding officers of units in
the Army, Navy and Air Force could be utilised for the welfare of the troops.
The case was therefore, made out jointly for taking over of contractor-run
canteens by units or formations, as the case may be, so that the profits from
the sale of canteen stores could be retained within the unit.
Contractors,
no doubt, put up considerable objection to the aforesaid proposal but the
Government agreed to the proposal of General Thimaya and orders were issued.
The concept of Unit-Run Canteens, therefore, became an accepted doctrine though
it took considerable period for implementing change over. It goes without
saying that from 1948 onwards the Canteen( for short CSD) functioned as a
department under the Ministry of Defence, initially for three years on an
experimental basis, and later from 1950 on a permanent basis and yet right upto
1977 the legal status of the same remained nebulous. For functional purposes,
it was a commercial undertaking, but for actual practice it was treated as a
Department of the Ministry of Defence. The result was that the terms and
conditions of employees presented various problems which quite often became a
source of discontent and unpleasant employer- employee relations.
As has
been stated earlier, for effective functioning of the defence services it is
absolutely necessary to provide canteen facilities through out the country and
while the Canteen Stores Department serve as whole sale outlet it is the
Unit-Run Canteens which serve as retail outlet. A set of Rules regulating the
terms and conditions of service of the employees of Unit-Run canteens have been
framed which confers all pervasive control over the employees with the
authorities of Defence services. Though the funding of the Unit-Run Canteens is
not made out of the Consolidated Fund of India but it is made by the Canteen
Stores Department and this Department it its turn has formed a part of the
Ministry of Defence, admittedly. In Parimal Chandra Raha and others vs. Life
Insurance Corporation of India and others - 1995 Supp. (2) Supreme Court Cases
611, the employees of different canteens in different offices of the Life
Insurance Corporation whether were employees of the Corporation itself was
under consideration by this Court.
This
Court evolved four principles which are quoted hereunder :-
(i)
Canteens maintained under obligatory provisions of the Factories Act for the
use of the employees became a part of the establishment and the workers
employed in such canteens are employees of the management.
(ii)
Even if there is a non-statutory obligation to provide a canteen, the position
is the same as in the case of statutory canteens. However, if there is a mere
obligation to provide facilities to run a canteen, the canteen does not become
part of the establishment.
(iii)
The obligation to provide canteen may be explicit or implicit. 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.
(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 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.`
Applying
the aforesaid principle to the facts in the present case, it is difficult to
conceive as to how the employees working in the Unit-Run Canteens can be held
to be not Government servants, when it has emerged that providing canteen
facilities to the Defence service personnel is obligatory on the part of the
Government and in fact these Unit-Run Canteens discharge the duty of retail
outlets after getting their provision from the wholesale outlet or depot of the
Canteen Stores Department. Mr. Goswami, the learned senior counsel appearing
for the Union of India strongly relied upon the judgment of this Court in Union
of India and another vs. Chotelal & Others (1999) 1 Supreme Court Cases
554, wherein the question for consideration was whether Dhobis appointed to
wash the clothes of cadets at NDA at Khadakwasla who are being paid from the
regimental fund could be treated as holders of civil post within the Ministry
of Defence. This Court answered in the negative because the regimental fund was
held not to be a public fund as defined in paragraph 802 of Defence Services
Regulation.
Payment
to such dhobis out of the regimental fund and the character of that regimental
fund was the determinative factor. But in the case in hand if the Canteen
Stores Department forms a part of the Ministry of Defence and if their funds
form a part of the Consolidated Fund of India and it is the said Canteen Stores
Department which provides fund as well as different article through the retail
outlets of Unit-Run Canteens then the employees who discharge the duties of
salesmen in such retail outlets must be held to be employees under the
Government. The officers of the Defence Services have all pervasive control
over the Unit-Run Canteens as well as the employees serving therein. Regular
set of Rules have been framed determining the service conditions of the
employees in Unit-Run Canteens. The funding of articles are provided by Canteen
Stores Department which itself is a part of the Ministry of Defence. The report
of a Committee of Subordinate Legislation went into detail the working
conditions of the employees engaged in the Unit-Run Canteens and categorically
came to the conclusion that these employees are recruited, controlled and
supervised by the Rules and Regulations made by the Defence Services although
these have been given the name of Executive Instructions. The said Committee
came to the conclusion that for all intent and purposes the employees in the Unit-Run
Canteens are Government employees and should be treated as such. In the
aforesaid premises, we are of the considered opinion that the status of the
employees in the Unit-Run Canteens must be held to be that of a government
employee and consequently the Central Administrative Tribunal would have the
jurisdiction to entertain applications by such employees under the provisions
of Administrative Tribunal Act. Civil Appeal Nos. 1039-1040 of 1999 by the
Union of India against the order of the Central Administrative Tribunal,
Jodhpur Branch in O.A. No. 86 of 1995 accordingly stand dismissed.
Civil
Appeal No. 1041 of 1999 is Unions appeal against the decision of Central
Administrative Tribunal, Jodhpur Branch in O.A. No. 157 of 1993 and OA No. 333
of 1994. By the impugned orders the Tribunal came to hold that it had the
jurisdiction to entertain the applications filed by the employees of the
Unit-Run Canteens and further directed that those employees are entitled to pay
and other benefits similar to the pay and other benefits available to the
canteen employees in the CSDI. The Tribunal also further directed that the
applicants should get the minimum of the salary presently being paid to their
counter-parts in the CSDI and all the benefits of the other service conditions
available to the regular Government employees in the CSDI. It also further
directed that they should be treated as Government employees from the date of
the filing of the applications before the Tribunal. It also directed that they
would be entitled to retiral benefits. As already stated, we have come to the
conclusion about the status of the employees serving in Unit-Run Canteens to be
that of Government servants, but that by itself ipso facto would not entitle
them to get all the service benefits as is available to the regular government
servant or even their counter parts serving in the CSD Canteens. It would
necessarily depend upon the nature of duty discharged by them as well as on the
Rules and Regulations and Administrative Instructions issued by the employer.
We have come across a set of Administrative Instructions issued by he Competent
Authority governing the service conditions of the employees of such Unit-Run
Canteens. In this view of the matter, the direction of the Tribunal that the employees
of the Unit-Run Canteens should be given all the benefits including the retiral
benefits of regular government servants cannot be sustained and we accordingly,
set aside that part of the direction. We, however, hold that these employees of
the Unit-Run Canteens will draw at the minimum of the regular scale of pay
available to their counter parts in the CSDI and, we further direct the
Ministry of Defence, Union of India to determine the service conditions of the
employees in the Unit-Run Canteens at an early date, preferably within six
months from the date of this judgment. This appeal is accordingly disposed of
with the aforesaid direction and observation.
Civil
Appeal Nos. 1042-43 of 1999. These appeals by the Union of India are directed
against the order of the Central Administrative Tribunal, Jodhpur Bench in OA
No. 231 of 1994, whereunder the Tribunal has directed the Union Government to
review the payment of subsistance allowance payable to the employees in the
light of the E.F.R. 53 of the Fundamental Rules. Notwithstanding the fact that
we have recorded the conclusion that the employees serving under Unit-Run
Canteens could be treated as Government servants, but that does not necessarily
mean that the service conditions of such employees are governed by the
Fundamental Rules. It would be open for the employer to frame separate
conditions of service of the employees or to adopt the Fundamental Rules. There
is no decision of the employer that Fundamental Rules would be applicable to
such employees and in the absence of such decision the Tribunal was not
justified to direct that the question of payment of subsistance allowance
should be reviewed in accordance with the provisions contained in the
Fundamental Rules. In this view of the matter, though we uphold the
jurisdiction of the Tribunal to entertain applications filed by employees
serving in Unit-Run Canteens but the impugned direction for reviewing the
payment of subsistance allowance in terms of Fundamental Rules cannot be
sustained and that part of the direction accordingly stands set aside and
Unions appeal to that extent stands allowed.
These
appeals are disposed of with aforesaid directions and observations.
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