State
Of Karnataka & Ors Vs. Kgsd Canteen Employees
Welfare Association & Ors [2006] Insc 2 (3 January 2006)
S.B.
Sinha & P.P. Naolekar
W I T
H Civil Appeal Nos. 449-468 Of 2003 & 4180-82 Of 2003 S.B. Sinha, J:
Both
the State of Karnataka and K.G.S.D. Canteen Employees Welfare Association are
in appeal before us aggrieved by and dissatisfied with the judgments and orders
dated 29.05.2002 and 30.50.2002 passed by a Division Bench of the Karnataka
High Court in Writ Appeal Nos.5690-5692 of 2000 and 4613-32 of 2000.
WRIT
PROCEEDINGS The First Respondent herein is an Association of the employees of
the Karnataka Government Secretariat Departmental Canteen. The Respondent Nos.2
and 3 are its members. They filed a writ petition before the Karnataka High
Court, inter alia, contending that the said canteen having been run by the
State Government for the benefit of the secretariat employees and 74 employees
working therein having completed more than 10 years of service were in effect
and substance the employees of the State Government itself, although they were
termed as 'employees of the canteen'. Further contention of the respondents
herein was that their wages were absolutely meagre being little more than the
minimum wages, but despite several representations made by them, they were not
paid the same salary as was payable to the employees of the State who were
similarly situated.
The
Appellant herein rejected their request for grant of scale of pay and other
service benefits applicable to the Government servants, inter alia, on the
premise that they were not its employees.
HIGH
COURT A learned Single Judge of the High Court opined that the canteen can be
equated to the Government Hospitality Organization where the canteen facilities
are made available and consequently directed the Appellant to implement the
notification dated 22.6.1996 which was applicable in relation to the Government
Hospitality Organization, as far as possible to the said canteen employees with
such revisions as are permissible under law as on the said date.
The
learned Single Judge opining that the employees of the canteen are employees of
the State Government directed :
"The
second prayer of the petitioners is to declare them as Government Servants. In
this regard I deem it proper to modify the relief by issuing a direction to the
Government to regularize the services of the petitioners in the following manner
:
Government
is directed to regularize the services of such of those petitioners who have
put in ten years of service subject to the Government satisfaction of
qualification if any for the post held by them and keeping in view the long
services rendered by them.
It is
declared that the petitioners are the employees of the Government and are
entitled for pay parity as per Annexure-O with revision from time to time.
The
petitioners have approached this Court in the year 1996 and the petition is
heard and disposed of in the year 2000. Petitioners have been provided some
increase in the wages from time to time. In these circumstances, I deem it
proper that the petitioners are not to be given any arrears for the past period
and the direction is to with effect from 1.1.2000 and not for the earlier
period. The arrears from 1.1.2000 is to be made available to the petitioners
within three months from the date of receipt of this order." Appeals
having been preferred by the State thereagainst, a Division Bench of the High
Court disposed of the appeals modifying the judgment of the learned Single
Judge as regard the date of regularization of their services as also payment of
back wages, directing :
"(i)
The effective date from which the pay-scales and other service benefits should
be extended to the employees of KGSD Canteen by regularizing their service is
changed from 01.01.2000 to 29.05.2002." The learned Single Judge as also
the Division Bench despite the fact that the Appellant herein had denied and
disputed the relationship of employer and employee between it and the employees
of the canteen, proceeded to determine the said question on the basis of
various documents produced before it.
PRESENT
APPEALS
The
State of Karnataka has filed Civil Appeal Nos.224-226 of 2003 and 449-468 of
2003, questioning the impugned judgment in its entirety whereas the K.G.S.D.
Canteen Employees Welfare Association preferred Civil Appeal Nos.4180-82 of
2003 questioning that part of the judgment whereby the judgment and order of
the learned Single Judge was modified restricting the benefit of regularization
from the date of the judgment and back wages from 29.05.2002 instead of
01.01.2000.
CONTENTIONS
OF THE PARTIES
Mr.
P.P. Rao, the learned Senior Counsel appearing on behalf of the Appellants,
would, inter alia, submit that the High Court committed a serious error in
passing the impugned judgment insofar as it misconstrued and misinterpreted
various Government orders as regard establishment and management of the canteen
issued in their proper perspective. The High Court, Mr. Rao urged, furthermore
misdirected itself in passing the impugned judgment insofar as it failed to
take into consideration that the canteen was not required to be run by the
State Government in terms of any statute or otherwise.
Mr. Naveen
R. Nath, the learned counsel appearing on behalf of the respondents herein, on
the other hand, would support the judgment of the High Court contending that a
finding of fact has been arrived at by the High Court that there existed a
relationship of employer and employee between the State and the concerned
employees as the State exercised total control over them and, therefore, this
Court should not interfere therewith.
It was
contended that the employees of the canteen in view of Article 14 of the
Constitution of India, were entitled to parity in wages with that of the
employees of the State Government for the period they had worked and,
furthermore, they having been in such employment for a long time their services
have rightly been directed to be regularized.
SCHEME
The canteen was being run by private contractors for a long time. In the year
1974, the State of Karnataka intended to run the canteen by a committee,
consisting of ten persons, six of them representing the Government and the
remaining four representing the Association as mentioned in order bearing No.
GAD 106 DBM dated 19th
November, 1974.
Amenities
and facilities, e.g., premises, furniture, cooking utensils, crockery, cutlery
etc. for running the canteen were to be provided by the State only for a period
of one year. Some of the relevant provisions laid down in the Scheme for
running the said canteen were as under :
"An
outright grant of Rs. 25,000 (Rs. Twenty five thousand only) is sanctioned
towards working expenses, namely, initial purchase of provisions, salaries of
staff to be appointed like cooks, services, etc The grant of Rs.25,000 (Rupees
Twenty five thousand only) will be debited to the new sub-heard "IV Grant
to the Karnataka Govt., Secretariat Canteen (Non Plan)" "under the
major, minor, and Group sub-Head" "288- Social Security and
Welfare-E-Other social Security and Welfare Programmes & Others "Programmes-C.
Welfare of Government Employees" pending re-appropriation of savings
under the above major head.
The
Chairman of the Committee is requested to take action to start the canteen.
The
working of the Canteen under the above arrangement would be reviewed at the end
of the one year and then the future set up shall be decided." The State by
reason thereof, thus, made a provision for grant of Rs.25,000/-. In terms of
the said scheme, all the furniture and equipments which were handed over to the
committee were required to be accounted for and returned to the Government upon
the closure of the canteen. The employees were appointed, indisputably, by the
committee on an ad hoc basis/daily wages.
It,
furthermore, appears that the Government had sanctioned grant in aid from time
to time. The management of the said canteen was handed over to the Respondent
Association. Constitution of the Managing Committee was being changed on a
regular basis. In the order dated 27.7.2000 issued by the Government of
Karnataka, it was stated :
"This
canteen is running under constant loss for the past few years and consequently
Government had to sanction Grant-in-aid a few times. These Grant-in-aids were
sanctioned keeping in view the welfare of the Secretariat Employees. In this
background, all the members of the Management Committee have tendered their
resignation to Government with a request to make alternate arrangements in view
of the fact that they are unable to run the canteen on "No Profit No Loss"
basis and also considering the fact that Government has not agreed to give
further Grant-in-aid to the Managing Committee. In this background, a meeting
was convened under the chairmanship of Additional Chief Secretary to Government
to consider making alternate arrangements for running the canteen. Finally in a
meeting convened on 23.2.2000 under the chairmanship of Secretary to Department
of Personnel & Administrative Reforms, it was decided to handover the
Management of the canteen to Karnataka Government Secretariat Employees
Association temporarily for a period of one year commencing from 6.4.2000 and
it is also proposed to continue the existing Grant-in-aid and other facilities
to Karnataka Government Secretariat Employees Association for running the canteen.
Apart from this, it is also proposed to provide the services of six secretariat
employees (Junior assistants & assistants) for supervising the affairs of
the canteen by treating them as "on other duty" for a period of one
year. These proposals were examined and accordingly order was issued as given below
:
ORDER
NO. DPAR 5 DSW 2000, BANGALORE, DATED : 27.7.2000 Keeping in view
the interest/welfare of Karnataka Government Secretariat Employees, sanction is
accorded to handover the Management of the Karnataka Government Secretariat
Canteen to Karnataka Government Secretariat Employees Association w.e.f.
4.8.2000 temporarily for a period of one year, from the Management Committee
constituted by the Government" The facilities and terms and conditions
were also stated therein, some of which are as under :
-
While taking
over the Management of the Canteen, the Karnataka Government Secretariat
Employees Association should prepare a list of furnitures, utensils, L.P.G.
etc. and receive a proper acknowledgement from the Management Committee and
submit a copy to the Government.
-
It is the
responsibility of the Karnataka Government Secretariat Employees Association to
keep all the assets of the canteen like furnitures, utensils, gas etc. safe and
secure.
-
Karnataka
Government Secretariat Employees Association can take the assistance of DPAR
(Executive-A) section for maintenance and repair of canteen building." In
an affidavit filed before us, it is stated that the Karnataka Government
Secretariat Employees Association which was running the canteen from 04.08.2000
to 31.03.2003 by a letter dated 10.03.2003, expressed its inability to run the
canteen beyond 31.03.2003 and, thus, the canteen services were closed from
01.04.2003. It is further stated that the State Government demolished the main
canteen building pursuant to the Government Note dated 04.08.2003. Certain
litigations had thereafter been initiated before several authorities. A writ
petition had also been filed by the Association before the High Court, which was
marked as Writ Petition No.41207 of 2004 seeking direction to make the balance
payment of LIC premium and contribution towards EPF for the period from
01.01.2003 to 31.03.2003.
This
Court evidently is not concerned with the pending litigation but we have
noticed the said fact only for the purpose of showing that the State intended
to run the canteen departmentally through a committee, but according to the
State, the committee has a distinct and different existence or different entity
than the Government.
The
fact situation obtaining in this case already suggests that the State had no
intention to run and maintain the canteen as a department. Had the intention of
the State been to run the said canteen as one of its departments, the question
of giving any grant or for that matter making of a provision for return of the
furniture and equipments would not have arisen.
EMPLOYEES
OF A CANTEEN - STATUS
The
question as to whether the employees of the canteen are employees of the State
or whether their services should be directed to be regularized or not, in view
of several decisions of this Court would be dependent upon the issues as to
whether the canteens are required to be made in terms of the provisions of a
statute or otherwise. Admittedly, the State had no statutory compulsion to run
and maintain any canteen for its employees.
In The
Saraspur Mills Co. Ltd. v. Ramanlal Chimanlal and Others [(1974) 3 SCC 66]
where the Management was under a statutory obligation in terms of Section 46 of
the Factories Act and the rules made thereunder to maintain the canteen for the
workers which was being run by a Co-operative Society wherewith the Management
had nothing to do. This Court relied upon its earlier decision in Basti Sugar
Mills Ltd. v. Ram Ujagar [(1964) 2 SCR 838] holding:
"The
above case was treated as an authority for the proposition that an employee
engaged in a work or operation which was incidentally connected with the main
industry was a workman if other requirements of the statute were satisfied and
that the malis in that case were workers. It was pointed out that the bungalows
and gardens on which the malis in that case worked were a kind of
amenity supplied by the mills to its officers and on this reasoning the malis were held to be engaged in operation
incidentally connected with the main industry carried out by the employer. The
High Court in Ahmedabad Mfg. & Calico Printing Co. Ltd. v. Workmen had
relied on the above ratio and come to the conclusion that the workers in order
to come within the definition of an "employee" need not necessarily
be directly connected with the manufacture of textile fabrics. The decision in Basti
Sugar Mills case1 was treated as binding in the former case." In Parimal
Chandra Raha and Others v. Life Insurance Corporation of India and Others [1995
Supp (2) SCC 611], relying upon a large number of decisions of this Court
including M.M.R. Khan v. Union of India [1990 Supp SCC 191], in the peculiar
facts and circumstances, it was held that the canteen which was being run by a Co-operative
Society became a part of the establishment of the Corporation. The said
decision was arrived at upon lifting the corporate veil of the cooperative
society. In that case, although there was no statutory liability on the part of
the Respondent therein, to maintain a canteen for their employees, this Court
observed:
"What
emerges from the statute law and the judicial decisions is as follows:
-
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.
-
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.
-
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.
-
Whether a
particular facility or service has become implicitly a part of the service
conditions of the employees or not, will depend, among others, on the nature of
the service/facility, the contribution the service in question makes to the
efficiency of the employees and the establishment, whether the service is
available as a matter of right to all the employees in their capacity as employees
and nothing more, the number of employees employed in the establishment and the
number of employees who avail of the service, the length of time for which the
service has been continuously available, the hours during which it is
available, the nature and character of management, the interest taken by the
employer in providing, maintaining, supervising and controlling the service,
the contribution made by the management in the form of infrastructure and funds
for making the service available etc.
[Emphasis
supplied] The said decision, however, was distinguished by a 3-Judge Bench of
this Court in Employees in relation to the Management of Reserve Bank of India
v. Workmen [(1996) 3 SCC 267] stating that M.M.R. Khan (supra) was decided on
the facts of that case. Although, a question was raised therein that the
propositions 3 and 4 laid down in Parimal Chandra Raha (supra) are very wide
and require reconsideration and appropriate modification, this Court refused to
go thereinto holding that it was not required to do so therein as the Tribunal
had proceeded to follow M.M.R. Khan (supra) only, holding:
"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."
[Emphasis supplied] A new gloss to the question, however, was given by this
Court in Indian Petrochemicals Corporation Ltd. v. Shramik Sena and Others
[(1999) 6 SCC 439]. This Court following the judgment M.M.R. Khan (supra) and
Reserve Bank of India (supra) opined that the ratio sought to be laid down in Parimal
Chandra Raha (supra) that "the workers employed in such canteen are the
employees of the Management" is not correct and further opined 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".
[Emphasis supplied] However, in Indian Overseas Bank v. I.O.B. Staff Canteen
Workers' Union and Another [(2000) 4 SCC 245] whereupon the High Court relied
upon, in the peculiar facts and circumstances of the said case, this Court
relied on M.M.R. Khan (supra) and Parimal Chandra Raha (supra) and
distinguished Indian Petrochemicals Corporation Ltd. (supra) holding:
"A
cumulative consideration of a few or more of them, by themselves or in
combination with any other relevant aspects, may also serve to be a 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.
The
decision in Indian Petrochemical case 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
non-statutory 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." A
Constitution Bench of this Court in Steel Authority of India Ltd. and Ors. v.
National Union Waterfront Workers and Ors. [(2001) 7 SCC 1] noticed the
following circumstances under which contract labour could be held to be the
workman of the principal employer:
"An
analysis of the cases, discussed above, shows that they fall in three classes:
-
where contract labour
is engaged in or in connection with the work of an establishment and employment
of contract labour is prohibited either because the industrial
adjudicator/court ordered abolition of contract labour or because the
appropriate Government issued notification under Section 10(1) of the CLRA Act,
no automatic absorption of the contract labour working in the establishment was
ordered;
-
where the
contract was found to be a sham and nominal, rather a camouflage, in which case
the contract labour working in the establishment of the principal employer were
held, in fact and in reality, the employees of the principal employer himself.
Indeed, such cases do not relate to abolition of contract labour but present
instances wherein the Court pierced the veil and declared the correct position
as a fact at the stage after employment of contract labour stood prohibited;
-
where in
discharge of a statutory obligation of maintaining a canteen in an
establishment the principal employer availed the services of a contractor the
courts have held that the contract labour would indeed be the employees of the
principal employer.
Such
observation, however, was made in the light of the provisions contained in Contract
Labour (Regulation and Abolition) Act, 1970.
Rajendra
Babu, J., as the learned Chief Justice then was, speaking for a Division Bench
of this Court in Barat Fritz Werner Ltd. v. State of Karnataka [(2001) 4 SCC
498] observed:
"Of
course, in Indian Petrochemicals Corpn. Ltd. v. Shramik Sena a new gloss was
given to this decision by stating that the presumption arising under the
Factories Act in relation to such workers is available only for the purpose of
the Act and no further. However, in Employers of Reserve Bank of India v. Workmen this Court struck a
different note. Again this Court in Indian Overseas Bank v. I.O.B. Staff
Canteen Workers' Union considered the effect of the
decisions in M.M.R. Khan, Parimal Chandra Raha, Reserve Bank of India and Indian Petrochemicals Corpn.
Ltd. v. Shramik Sena and it was made clear that the workers of a particular
canteen statutorily obligated to be run render no more than to deem them to be
workers for limited purpose of the Factories Act and not for all purposes and
in cases where it is a non- statutory recognised canteen the court should find
out whether the obligation to run was implicit or explicit on the facts proved
in that case and the ordinary test of control, supervision and the nature of
facilities provided were taken note of to find out whether the employees therein
are those of the main establishment" However, in that case, the court was
only concerned with a notification abolishing contract labour under Contract Labour
(Regulation and Abolition) Act.
Yet
again in Hari Shankar Sharma and Others v. Artificial Limbs Manufacturing Corpn.
and Others [(2002) 1 SCC 337], this Court, following Barat Fritz Werner Ltd
(supra) opined:
"The
submission of the appellants that because the canteen had been set up pursuant
to a statutory obligation under Section 46 of the Factories Act therefore the
employees in the canteen were the employees of Respondent 1, is unacceptable.
First, Respondent 1 has disputed that Section 46 of the Factories Act at all
applies to it. Indeed, the High Court has noted that this was never the case of
the appellants either before the Labour Court or the High Court. Second, assuming that Section 46 of the
Factories Act was applicable to Respondent 1, it cannot be said as an absolute
proposition of law that whenever in discharge of a statutory mandate, a canteen
is set up or other facility is provided by an establishment, the employees of
the canteen or such other facility become the employees of that establishment.
It would depend on how the obligation is discharged by the establishment. It
may be carried out wholly or substantially by the establishment itself or the
burden may be delegated to an independent contractor. There is nothing in
Section 46 of the Factories Act, nor has any provision of any other statute
been pointed out to us by the appellants, which provides for the mode in which
the specified establishment must set up a canteen. Where it is left to the
discretion of the establishment concerned to discharge its obligation of
setting up a canteen either by way of direct recruitment or by employment of a
contractor, it cannot be postulated that in the latter event, the persons
working in the canteen would be the employees of the establishment. Therefore,
even assuming that Respondent 1 is a specified industry within the meaning of
Section 46 of the Factories Act, 1946, this by itself would not lead to the
inevitable conclusion that the employees in the canteen are the employees of
Respondent 1." In National Thermal Power Corporation Ltd. v. Karri Pothuraju
and Others [(2003) 7 SCC 384], Rajendra Babu, J., speaking for himself and Raju,
J., however, held that in view of a catena of decisions of this Court it is
aptly clear that where in discharge of a statutory obligation of maintaining a
canteen in an establishment the principal employer availed the services of a
contractor the contract labour would indeed be the employees of the principal
employer.
The
same bench in Mishra Dhatu Nigam Ltd. and Others v. M. Venkataiah and Others
[(2003) 7 SCC 488], having regard to the provisions contained in Rules 65 and
71 of Andhra Pradesh Factories Rules, 1950, reiterated the same view.
In Haldia
Refinery Canteen Employees Union and Others v. Indian Oil Corporation Ltd. and
Others [(2005) 5 SCC 51], Ashok Bhan, J., speaking for a Division Bench of this
Court, distinguished Indian Petrochemicals Corporation Ltd. (supra) opining:
"The
management unlike in Indian Petrochemicals Corpn. Ltd. case is not reimbursing
the wages of the workmen engaged in the canteen.
Rather
the contractor has been made liable to pay provident fund contribution, leave
salary, medical benefits to his employees and to observe statutory working
hours. The contractor has also been made responsible for the proper maintenance
of registers, records and accounts so far as compliance with any statutory
provisions/obligations is concerned. A duty has been cast on the contractor to
keep proper records pertaining to payment of wages, etc. and also for
depositing the provident fund contributions with the authorities concerned. The
contractor has been made liable to defend, indemnify and hold harmless the
employer from any liability or penalty which may be imposed by the Central,
State or local authorities by reason of any violation by the contractor of such
laws, regulations and also from all claims, suits or proceedings that may be
brought against the management arising under or incidental to or by reason of
the work provided/assigned under the contract brought by the employees of the
contractor, third party or by the Central or State Government authorities."
It was specifically noticed that the workmen of the Canteen and the contractor
had entered into independent settlements without impleading the owner or
occupier of the factory as a party therein which also went to show that the
workmen were treating themselves the workmen of the contractor and not that of
the owners.
We
have referred to the aforementioned decisions in order to show that in each of
the aforementioned cases the industrial adjudicator was required to apply the
relevant tests laid down by this Court in the fact situation obtaining therein.
Most of the cases referred to hereinbefore were considered by this Court in the
peculiar facts and circumstances obtaining therein and, thus, it is even not
proper for the industrial adjudicator to apply the ratio of one decision to the
exclusion of other without considering the facts and circumstances involved
therein. The law, however, does not appear to be settled as to whether even in
a case where the employer is required to run and maintain a canteen in terms of
the provisions of the statute, the employees of the canteen would automatically
be held to be the workers of the principal employer for all intent and purport
and not for the purpose of the Factories Act alone. We, however, are not concerned
with the said question in this matter and refrain ourselves from making any
observation in respect thereof.
We,
however, intend to point out that in a case of this nature even an industrial
adjudicator may have some difficulty in coming to the conclusion that employees
of a canteen for all intent and purport are employees of the principal
employer.
Question
of issuance of direction to regularize the services of the employees stand
absolutely on a different footing to which we shall advert to a little later.
MAINTAINABILITY
OF THE WRIT PETITION
In a
case of this nature, where serious disputed questions fact were raised, in our
opinion, it was not proper for the High Court for embark thereupon an exercise
under Article 226 of the Constitution. The High Court in its judgment relied
upon a large number of decisions of this Court, inter alia, in Reserve Bank of India (supra) and State Bank of India
& Ors. v. State Bank of India Canteen
Employees' Union (Bengal Circle) and Ors.
[AIR
2000 SC 1518] ignoring the fact that all such disputes were adjudicated in an
industrial adjudication.
The
High Court arrived at a finding that the Committee was merely a cloak of the
Government and an arm of the State. When allegations are made that a body is a
cloak and/or smoke screen or a camouflage, the adjudication of such a disputed
question should be left to the Industrial Court.
In Steel Authority of India Ltd. (supra), as noticed hereinbefore, this Court analysed
the decision of this Court to say that they fall in three classes.
It was
observed :
"We
have quoted the definitions of these terms above and elucidated their import.
The word "workman" is defined in wide terms. It is a generic term of
which contract labour is a species. It is true that a combined reading of the
terms "establishment" and "workman" shows that a workman
engaged in an establishment would have direct relationship with the principal
employer as a servant of master. But what is true of a workman could not be
correct of contract labour. The circumstances under which contract labour could
be treated as direct workman of the principal employer have already been
pointed out above." The legal position was reiterated in Rourkela Shramik Sangh
v. Steel Authority of India Ltd. and Another [(2003) 4 SCC 317] stating:
"There
cannot, thus, be any doubt whatsoever that the appellants were fully aware of
the fact that they were required to approach the Industrial Tribunal in terms
of the provisions of the Industrial Disputes Act for ventilating their
grievances. The submission of Mr Shanti Bhushan to the effect that the High
Court acts as an authority while exercising its power under Article 226 of the
Constitution of India cannot be countenanced. The order
of this Court dated 16-10-1995, as quoted supra, is absolutely
clear and unambiguous. The term "authority" used in this Court's
order dated 16-10-1995 must be read in the context in
which it was used. The appellant in terms thereof could seek a reference which
would mean a reference in terms of Section 10 of the Industrial Disputes Act.
It
could also approach "the authority in accordance with law" which
would mean authority under a statute. The High Court, by no stretch of
imagination, can be an authority under a statute." It was, furthermore,
reiterated that a disputed question of fact normally would not be entertained
in a writ proceeding.
To the
same effect is the decision of this Court in Workmen of Nilgiri Coop. Mkt.
Society Ltd. v. State of T.N. and Others [(2004) 3 SCC 514] wherein this Court
considered in detail the relevant factors for determining the relationship of
employer and workman. It was held that the burden of proof was upon the
workman. In what circumstances, control test taken recourse to by the High
Court can inter alia be applicable for determining a disputed question of
relation of employer and employee has also been considered therein at some
details. It was firmly laid down that whether a contract is a sham or
camouflage is not a question of law but of fact.
Hussainbhai,
Calicut v. The Alath Factory Thezhilali
Union, Kozhikode and Others [(1978) 4 SCC 257],
whereupon the High Court has placed strong reliance, was held to be falling
under Class (ii) envisaged in Steel Authority of India Ltd. (supra).
We
may, moreover, notice that in Workmen of the Canteen of Coates of India Ltd. v.
Coates of India Ltd. and Others [(2004) 3 SCC 547], a Division Bench of this
Court observed:
"Learned
counsel for the appellant strenuously urged that the respondent Company has the
statutory obligation to provide a canteen in the premises and therefore, the
employees of the canteen must be presumed to be the workmen employed by the
respondent Company and no one else. Learned counsel referred to certain
decisions for this purpose. It is sufficient for us to state that some
requirement under the Factories Act of providing a canteen in the industrial establishment,
is by itself not decisive of the question or sufficient to determine the status
of the persons employed in the canteen. The effect, if any, relating to compliance
with the provisions of the Factories Act is a different matter which does not
arise for consideration in the present case, for which reason we express no
opinion on any such question. It is sufficient for us to say that the finding
recorded by the learned Single Judge also leaves no escape from the conclusion
that these workmen cannot be held to be workmen employed by the respondent
Company." Albeit in a different context, this Court in U.P. State Bridge
Corporation Ltd. and Others v. U.P. Rajya Setu Nigam S. Karamchari Sangh
[(2004) 4 SCC 268] emphasised the need of adjudication of a disputed question
of fact before Industrial Court stating:
"The
only reason given by the High Court to finally dispose of the issues in its
writ jurisdiction which appears to be sustainable, is the factor of delay, on
the part of the High Court in disposing of the dispute. Doubtless the issue of
alternative remedy should be raised and decided at the earliest opportunity so
that a litigant is not prejudiced by the action of the Court since the
objection is one in the nature of a demurrer. Nevertheless even when there has
been such a delay where the issue raised requires the resolution of factual
controversies, the High Court should not, even when there is a delay, short-circuit
the process for effectively determining the facts. Indeed the factual
controversies which have arisen in this case remain unresolved. They must be
resolved in a manner which is just and fair to both the parties. The High Court
was not the appropriate forum for the enforcement of the right and the learned
Single Judge in Anand Prakash case had correctly refused to entertain the writ
petition for such relief." Yet recently, this Court in Rajasthan State
Road Transport Corpn. And Others v. Zakir Hussain [(2005) 7 SCC 447] in the
context of the jurisdiction of the Industrial Court vis-`-vis the Civil Court highlighted the object of the Industrial Disputes Act
stating:
"The
object of the Industrial Disputes Act, as its preamble indicates, is to make
provision for the investigation and settlement of industrial disputes, which
means adjudication of such disputes also.
The
Act envisages collective bargaining, contracts between union representing the
workmen and the management, a matter which is outside the realm of the common
law or the Indian law of contract" Keeping in view of the facts and
circumstances of this case as also the principle of law enunciated in the above
referred decisions of this Court, we are, thus, of the opinion that recourse to
writ remedy was not apposite in this case.
REGULARISATION
The
question which now arises for consideration is as to whether the High Court was
justified in directing regularization of the services of the Respondents. It
was evidently not. In a large number of decisions, this Court has categorically
held that it is not open to a High Court to exercise its discretion under
Article 226 of the Constitution of India either to frame a scheme by itself or
to direct the State to frame a scheme for regularising the services of ad hoc
employees or daily wages employees who had not been appointed in terms of the
extant service rules framed either under a statute or under the proviso to
Article 309 of the Constitution of India. Such a scheme, even if framed by the
State, would not meet the requirements of law as the executive order made under
Article 162 of the Constitution of India cannot prevail over a statute or
statutory rules framed under proviso to Article 309 thereof. The State is
obligated to make appointments only in fulfilment of its constitutional
obligation as laid down in Articles 14, 15 and 16 of the Constitution of India
and not by way of any regularization scheme.
In our
constitutional schemes, all eligible persons similarly situated must be given
opportunity to apply for and receive considerations for appointments at the
hands of the authorities of the State. Denial of such a claim by some officers
of the State times and again had been deprecated by this Court. In any view, in
our democratic polity, an authority howsoever high it may be cannot act in
breach of an existing statute or the rules which hold the field.
It is
not necessary for us to dilate further on the issue as recently in State of U.P. v. Neeraj Awasthi and Ors. [2005 (10) SCALE 286], it
has been clearly held that the High Court has no jurisdiction to frame a scheme
by itself or direct framing of such a scheme by the State.
In Mahendra
L. Jain and Others v. Indore Development Authority and Others [(2005) 1 SCC
639], it was categorically held:
"The
question, therefore, which arises for consideration is as to whether they could
lay a valid claim for regularisation of their services. The answer thereto must
be rendered in the negative.
Regularisation
cannot be claimed as a matter of right. An illegal appointment cannot be legalised
by taking recourse to regularisation. What can be regularised is an
irregularity and not an illegality.
The
constitutional scheme which the country has adopted does not contemplate any
back-door appointment. A State before offering public service to a person must
comply with the constitutional requirements of Articles 14 and 16 of the
Constitution. All actions of the State must conform to the constitutional
requirements. A daily-wager in the absence of a statutory provision in this
behalf would not be entitled to regularisation. (See State of U.P. v. Ajay Kumar and Jawaharlal Nehru Krishi Vishwa Vidyalaya
v. Bal Kishan Soni.)" In Zakir Hussain (supra), even in relation to the
temporary employee, it was stated:
"The
respondent is a temporary employee of the Corporation and a probationer and not
a government servant and, therefore, is not entitled for any protection under
Article 311 of the Constitution. He was a party to the contract. In view of the
fact that the respondent was appointed on probation and the services were
terminated during the period of probation simpliciter as the same were not
found to be satisfactory, the appellant Corporation is not obliged to hold an
enquiry before terminating the services. The respondent being a probationer has
got no substantive right to hold the post and was not entitled to a decree of
declaration as erroneously granted by the lower courts and also of the High
Court." PARITY IN THE SCALE OF PAY The contention that at least for the
period they have worked they were entitled to the remuneration in the scale of
pay as that of the government employees cannot be accepted for more than one
reason. They did not hold any post. No post for the canteen was sanctioned by
the State. According to the State, they were not its employees. Salary on a
regular scale of pay, it is trite, is payable to an employee only when he holds
a status. [See Mahendra L. Jain and Others (supra)] The High Court was, thus,
not correct in holding that the members of the First Respondent could be
treated at par with the Hospitality Organization of the State of Karnataka. Such equation is impermissible in
law. In the Hospitality Organization of the State, the posts might have been
sanctioned. Only because, food is prepared and served, the same would not mean
that a canteen run by a Committee can be equated thereto.
SUBSEQUENT
EVENT
Subsequent
events which had taken place is also worth taking note of.
The
fact remains that the canteen now is closed. The judgment and order of the High
Court, thus, otherwise also cannot be implemented. The employees concerned,
therefore, cannot be directed to be reinstated in service. We have noticed,
hereinbefore, that other proceedings have been initiated by them.
The
said proceedings may be disposed of in accordance with law.
CONCLUSION
For
the reasons aforementioned, we are of the opinion that the impugned judgment
cannot be sustained, which is set aside accordingly.
Consequently
the appeals filed by the State Government being Civil Appeal Nos. 224-226 of
2003 and 449-468 of 2003 are allowed and that of the First Respondent being
Civil Appeal Nos. 4180-82 of 2003 are dismissed.
However,
in the facts and circumstances of this case, the parties shall bear their own
costs.
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