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CASE NO.: Appeal (civil)  6410 of 2000

PETITIONER: Hindalco Industries Ltd

RESPONDENT: Association of Engineering Workers

DATE OF JUDGMENT: 14/03/2008

BENCH: Tarun Chatterjee & P. Sathasivam

JUDGMENT: JUDGMENT

CIVIL APPEAL NO. 6410 OF 2000

P. Sathasivam, J.

1)      Hindalco Industries Ltd., aggrieved by the judgment and  order dated 20.01.2000 of the High Court of Bombay in L.P.A.  No. 58 of 1999 confirming the order of the Industrial Court  accepting the case of the Association of Engineering Workers’  Union,  has filed the above appeal. 2)      The respondent herein namely, Association of  Engineering Workers’ Union (hereinafter referred to as "the  Union") filed a complaint of unfair labour practice under Item  9 of Schedule IV of the Maharashtra Recognition of Trade  Unions and Prevention of Unfair Labour Practices Act, 1971  (hereinafter referred to as "the MRTU and PULP Act, 1971")  against Hindalco Industries Ltd. \026 appellant herein (hereinafter  referred to as "the Company") before the Industrial Court at  Thane.  According to the Union, the complainant is a trade  union recognized as a representative union of the appellant- company.  The Company has engaged employees in unfair  labour practices on and from 1971 on a continuous basis from  month to month, therefore, the period of limitation is not  applicable. However, as a measure of abundant precaution,  the Union has filed a separate application for condonation of  delay.  The Company has engaged about 500 workmen in the  manufacture of aluminium and aluminium products.  The  complainant-Union (respondent herein) is a recognized Union  for the establishment of the appellant-Company.  In terms of  Section 46 of the Factories Act, 1948, the Company is duty  bound to maintain a canteen for the benefits of workmen  working in an establishment.  Accordingly, the Company is  maintaining a Canteen at its Kalwa establishment.  In order to  avoid giving the workmen working in the canteen, permanency  and benefits which are applicable to permanent workmen of  the Company, the Company is illegally treating the workmen  working the canteen as contract workmen.  It is the specific  case of the complainant-Union that the contract is sham and  is a mere arrangement made for the purpose of avoiding  permanency and giving wages and benefits as are applicable to  permanent workmen of the company. 3)      On the date of filing of the complaint, out of 27 workmen  who have worked for various periods, 23 workmen have  worked for more than ten years continuously the maximum  being for 25 years.  The remaining four workmen have also  worked for more than 3 = years and as such are permanent  workmen of the Company.  The Company has been making  arrangement showing on papers that the contract is being

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given to someone or the other whereas in fact, the canteen is  engaged and run by the Company itself.  It is, therefore, the  case of the Union that 27 workmen whose names are  mentioned in the complaint are, in fact, the workmen of the  Company.  As per the various decisions of this Court, the  workmen who are working in the statutory canteen are treated  as workmen of the principal employer.  On the same analogy,  all the 27 workmen are workers of the Company. 4)      The Company has engaged and is engaging in unfair  labour practices by treating its own workmen as workmen on  contract.  The workmen are entitled for a declaration that they  are the workmen of the Company.  In order to comply with the  technicalities that are required to be done, the Union is  simultaneously making an application to the State Contract  Labour Advisory Board to abolish the contract system as far as  the canteen is concerned in the appellant-Company.  The  Union is also raising a demand that all the 27 workmen  should be absorbed in the Company from the initial date of  their employment in the Company and pay them wages and  other benefits that are applicable to permanent workmen of  the Company.   5)      The Company filed the reply in the Industrial Court  stating that the complaint is time barred since filed beyond the  prescribed time limit laid down under the provisions of the  MRTU & PULP Act, 1971, hence the same is to be dismissed in  limine.  Further the dispute under reference is pertaining to  employees employed under the contract i.e., contract labour,  there is a specific remedy and relief available under the  Contract Labour (Regulation & Abolition) Act, 1971, which is a  specific forum available to redress the grievances,  if any.   Inasmuch as the Complainant-Union has already approached  the appropriate authority for abolition of contract labour, the  present complaint before the Industrial Court is liable to be  dismissed on the principle of res judicata.  With regard to the  merits, it is stated that the practice of giving contract to run  the canteen is in vogue right from inception.  The complainant  is very well aware of the contract and the canteen contractor  who is managing the canteen.  There are several decisions of  this Court holding that employing contract labour cannot be  agitated within the forum under MRTU & PULP Act 1971,  when there is specific remedy available in Contract Labour  (Regulation & Abolition) Act, 1971.  Moreover, since it is a  disputable point such dispute is required to be resolved  through the machinery provided under the Industrial Disputes  Act, 1947, hence, any complaint to that effect under MRTU &  PULP Act, 1971 is not maintainable.  It is further reiterated  that working of the canteen is distinct and separate which is  neither incidental nor connected with the manufacturing  process of the factory.  The canteen is exclusively run and  managed by the contractor which is an outside agency. 6)      On the above pleadings and on the basis of the oral and  documentary evidence, the Industrial Court, by order dated  15.10.1998, allowed the complaint and declared that the  Company has committed unfair labour practice under Item 9  of Schedule IV of the MRTU & PULP Act, 1971 and further  directed the Company to cease and desist such unfair labour  practice.  In the same order, the Industrial Court directed the  Company to absorb and make the canteen employees referred  to in the Annexure as permanent employees of the Company  from the date of its order.  In addition to the same, the  Industrial Court directed the Company to pay them the wages  and other benefits like the last category of unskilled workmen  in the Company. 7)      Aggrieved by the aforesaid order of the Industrial Court,  the Company preferred Writ Petition No. 6181 of 1998 before

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the High Court of Bombay.  The learned single Judge, by order  dated 25.01.1999, confirmed the order of the Industrial Court  and dismissed the writ petition.  The said order of the learned  single Judge was challenged before the Division Bench of the  High Court in L.P.A. No. 58 of 1999.  By order dated  22.03.1999, the said L.P.A. was summarily dismissed.   Questioning the same, the Company filed an appeal before this  Court in Civil Appeal No.6120 of 1999 (@ S.L.P.(C) No. 9244 of  1999).  By order dated 25.10.1999, this Court allowed the  appeal of the Company, set aside the order passed by the High  Court and remitted the matter to the High Court for deciding  the same on merits.  Pursuant to the said direction, L.P.A. No.  58 of 1999 was restored on its file and heard afresh and the  Division Bench by the impugned order dismissed the Letters  Patent Appeal and confirmed the order of the Industrial Court.   Aggrieved by the aforesaid order of the Division Bench of the  High Court dated 20.01.2000, the Company has filed the  present appeal. 8)      Heard Mr. P.P. Rao, learned senior counsel for the  appellant-Company and Mr. S.F. Deshmuk, learned counsel  for the respondent-Union.        9)      The points for consideration in this appeal are (i) whether  the Industrial Court is justified in issuing direction to absorb  all the employees of the canteen in the company’s employment  and pay them wages and other benefits to the extent of last  category of unskilled workers in the company; (ii) whether the  High Court is right in affirming the said order?  10)     Since, the Union has filed a complaint under item 9 of  Schedule IV of the MRTU and PULP Act, 1971, before going  into the merits, let us refer the Preamble and relevant  provisions of the Act.  The preamble of the MRTU and PULP  Act, 1971 reads as under:- "An Act to provide for the recognition of trade unions for  facilitating collective bargaining for certain undertakings; to  state their rights and obligations; to confer certain powers on  unrecognized unions; to provide for declaring certain strikes  and lock-outs as illegal strikes and lock-outs; to define and  provide for the prevention of certain unfair labour practices;  to constitute courts (as independent machinery) for carrying  out the purposes of according recognition to trade unions  and for enforcing the provisions relating to unfair practices;  and to provide for matters connected with the purposes  aforesaid.

WHEREAS, by Government Resolution, Industries and  Labour Department, No. IDA.1367-LAB-II, dated the 14th  February, 1968, the Government of Maharashtra appointed  a Committee called "the Committee on Unfair Labour  Practices" for defining certain activities of employers and  workers and their organizations which should be treated as  unfair labour practices and for suggesting action which  should be taken against employers or workers, or their  organizations, for engaging in such unfair labour practices;

AND WHEREAS, after taking into consideration the report of  the Committee the Government is of opinion that it is  expedient to provide for the recognition of trade unions for  facilitating collective bargaining for certain undertakings; to  state their rights and obligations; to confer certain powers on  unrecognized unions; to provide for declaring certain strikes  and lock-outs as illegal strikes and lock-out; to define and  provide for the prevention of certain unfair labour practices;  to constitute courts (as independent machinery) for carrying  out the purposes or according recognition to trade unions  and for enforcing provisions relating to unfair practices; and

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to provide for matters connected with the purposes  aforesaid; It is hereby enacted in the Twenty-second Year of  the Republic of India as follows:-"         Among the various definitions, we are concerned about Section  3(16) which refers to "unfair labour practices" means unfair  labour practices as defined in section 26.  Chapter-VI, Section  26 speaks about Unfair labour practices.  It reads:         "26. Unfair labour practices

In this Act, unless the context requires otherwise, ’unfair  labour practices’ mean any of the practices listed in  Schedules II, III and IV."          Sections 4 and 5 refer Industrial Court and its duties.  As per  Section 27, no employer or union and no employees shall  engage in any unfair labour practice.  Section 28 provides  elaborate procedure for dealing with complaints relating to  unfair labour practices.  Section 30 speaks about powers of  Industrial and Labour Courts.  Section 32 mandates the Court  shall have the power to decide all matters arising out of any  application or a complaint referred to it for the decision under  any of the provisions of the Act.  Section 59 makes it clear that  if any proceeding is initiated under the the MRTU and PULP  Act, 1971, no proceeding shall be entertained by any authority  in respect of those matters under the Bombay Industrial  Relations Act, 1946 (Bombay Act) and Industrial Disputes Act,  1947 (in short "the I.D. Act").  Section 60 prohibits filing of  suits in any civil court in respect of the subject-matter of a  complaint or application to the Industrial Court or Labour  Court under this Act.  11)     Though an objection was raised as to limitation in filing  complaint before the Industrial Court in view of reasons  adduced and accepted by the Industrial Court and the High  Court, we are of the view that there is no need to elaborate the  same.  We also reject the supplementary objection, namely,  the complaint is hit by the principle of res judicata since  according to the Industrial Court, no sufficient material was  placed to throw the complaint on the ground of earlier/parallel  proceeding in any other forum.  12)     Coming to the main issue, according to the Union, the  Company is having 500 employees working in the  manufacturing and other activities.  It is their specific case  that there is a canteen inside the campus of the  manufacturing unit and it is a statutory canteen and,  therefore, the employees working in the canteen numbering 27  are the employees of the company.  It is not in dispute that the  provisions of Factories Act, 1948 are applicable to the  Company.  Section 46(1) mandates that the State Government  may make rules requiring that in any specified factory wherein  more than 250 workers are ordinarily employed, a canteen or  canteens shall be provided and maintained by the occupier for  the use of the workers.  The presence of a canteen within the  Company premises and statutory provision as referred above  are not disputed.  However, it is the case of the Company that  the employees in the canteen are working through a contractor  and, therefore, they are not entitled for status of permanent  employees of the Company.  Mr. P.P.Rao, learned senior  counsel appearing for the appellant-Company, by drawing our  attention to various decisions of this Court would submit that  unless relationship of employer and employee exists, the  present issue/claim cannot be gone into by the Industrial  Court under the provisions of the MRTU and PULP Act, 1971.   In other words, according to him, in view of the  objection/stand taken in the reply statement before the

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Industrial Court, the issue raised by the Union cannot be  adjudicated and it is for the Union or workmen to get an order  under the provisions of the I.D. Act and thereafter, approach  the Industrial Court for necessary relief, if any.  On the other  hand, Mr. Deshmuk, learned counsel appearing for the  respondent-Union vehemently contended that in view of the  object of the enactment and all other details such as existence  of a canteen from several years, control and supervision by the  company, the contractor is only a name-lender and the  Industrial Court has jurisdiction to go into the issue raised in  the complaint.  He further contended that based on the  relevant acceptable materials, the Industrial Court granted  relief in favour of the Union which was rightly affirmed by the  High Court and the same cannot be lightly interfered under  Article 136 of the Constitution of India.  13)     In the earlier part of our judgment, we have referred to  the claim of both parties as well as relevant provisions of the  the MRTU and PULP Act, 1971.  Now let us consider various  pronouncements on the point in issue.   The earliest decision  relied on by the Company is General Labour Union (Red  Flag), Bombay vs. Ahmedabad Mfg. & Calico Printing Co.  Ltd. and Others, 1995 Supp (1) SCC 175.  In that decision,  General Labour Union (Red Flag), Bombay had filed a  complaint before the Industrial Court under the MRTU and  PULP Act, 1971 complaining of the breach of Items 1(a), (b),  4(a), (f) and 6 of Schedule II and Items 7, 9 and 10 of Schedule  IV of the said Act.  The case of the complainant-union was  that the 21 workmen who were working in one of the canteens  of the respondent-company, were not given the service  conditions as were available to the other workmen of the  company and there was also a threat of termination of their  services.  It is an admitted fact that these workmen were  employed by a contractor who was given a contract to run the  canteen in question.  The complaint was filed on the footing  that the workmen were the employees of the company and,  therefore, the breach committed and the threats of  retrenchments were cognizable by the Industrial Court, under  the said Act.  The complaint proceeded on the basis as if the  workmen were a part of the work-force of the company. The  facts on record reveal that the workmen were never recognised  by the respondent-company as its workmen and it was the  contention of the company that they were not its employees.  The Industrial Court dismissed the complaint holding that  since the workmen were not the workmen of the respondent- company, the complaint was not maintainable under the said  Act.  The High Court in writ petition confirmed the said finding  and dismissed the petition on the same ground.  Hence, the  Labour Union approached this Court by filing appeal.  This  Court has concluded as under:- "2.  As pointed out both by the Industrial Court and the  High Court, it was not established that the workmen in  question were the workmen of the respondent-company. In  the circumstances, no complaint could lie under the Act as  is held by the two courts below. We, therefore, find nothing  wrong in the decision impugned before us. The workmen  have first to establish that they are the workmen of the  respondent-company before they can file any complaint  under the Act. Admittedly, this has not been done. It is open  for the workmen to raise an appropriate industrial dispute in  that behalf if they are entitled to do so before they resort to  the provisions of the present Act."

14)     In Vividh Kamgar Sabha vs. Kalyani Steels Ltd. and  Another, (2001) 2 SCC 381, similar claim under the MRTU  and PULP Act, 1971 was considered.  The two-Judge Bench

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following the General Labour Union (Red Flag), Bombay  case (supra) dismissed the appeal filed by the workers-Union  on the ground that the complaint was not maintainable.   Similar direction as issued in General Labour Union (Red  Flag), Bombay case (supra) has been issued in this case also.  15)     The next decision which is also under the MRTU and  PULP Act, 1971 is Cipla Ltd. vs. Maharashtra General  Kamgar Union and Others, (2001) 3 SCC 101.  When similar  claim was made by the trade-Union against the Management \026  Cipla Ltd., the same was negatived by the Labour Court.   However, the Division Bench of the High Court took a different  view of the matter and allowed the complaint.  While  considering the appeal filed by Cipla, the two-Judge Bench  accepted the case of the Management and rejected the stand  taken by the trade-Union.  The argument of learned senior  counsel appearing for the Union that in view of Section 32 of  the Act incidental question can be considered by the Industrial  Court was not acceptable and this Court concluded:  

"11. Next decision relied upon by Shri Singhvi is Central  Bank of India Ltd. v. P.S. Rajagopalan AIR 1964 SC 743 to  contend that even in cases arising under Section        33-C(2) of  the Industrial Disputes Act the scope, though very limited,  certain incidental questions can be gone into like a claim for  special allowance for operating adding machine which may  not be based on the Sastry Award made under the provisions  of Chapter V-A. The learned counsel pointed out that in the  event we were to hold that it is only in clear cases or  undisputed cases the Labour Court or the Industrial  Tribunal under the Act can examine the complaints made  thereunder, the whole provision would be rendered otiose  and in each of those cases provisions of the Bombay  Industrial Relations Act, 1946 or the Industrial Disputes Act  will have to be invoked. We are afraid that this argument  cannot be sustained for the fact that even in respect of  claims arising under Section 33-C(2) appropriate dispute can  be raised in terms of Section 10 of the Industrial Disputes  Act and that has not been the position in the present case.  Nor can we say that even in cases where employer-employee  relationship is undisputed or indisputably referring to the  history of relationship between the parties, dispute can be  settled and not in a case of the present nature where it is  clear that the workmen are working under a contract. But it  is only a veil and that will have to be lifted to establish the  relationship between the parties. That exercise, we are  afraid, can also be done by the Industrial Tribunal under the  Bombay Industrial Relations Act, 1946 or under the  Industrial Disputes Act. Therefore, we are afraid that the  contention advanced very ably by Shri Singhvi on behalf of  the respondents cannot be accepted. Therefore, we hold that  the High Court went far beyond the scope of the provisions of  the Act and did not correctly understand the decisions of  this Court in Gujarat Electricity Board, Thermal Power Station  v. Hind Mazdoor Sabha (1995) 5 SCC 27 and General Labour  Union (Red Flag) v. Ahmedabad Mfg. & Calico Printing Co. Ltd.  1995 Supp (1) SCC 175.  The correct interpretation of these  decisions will lead to the result, which we have stated in the  course of this order."

By saying so, allowed the appeal filed by Cipla Ltd. 15)     The next decision heavily relied on the side of the  appellant-Company is Sarva Shramik Sangh vs. Indian  Smelting & Refining Co. Ltd. and Others, (2003) 10 SCC  455.  Here again, this Court considered the very same  provisions of the MRTU and PULP Act, 1971.  Similar

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contentions were raised by the Union and the Management.   Basing reliance on General Labour Union (Red Flag) Bombay  (supra) and Cipla Ltd. (supra), this Court concluded: "24. \005 \005. In order to entertain a complaint under the  Maharashtra Act it has to be established that the claimant  was an employee of the employer against whom complaint is  made under the ID Act. When there is no dispute about such  relationship, as noted in para 9 of Cipla case the  Maharashtra Act would have full application. When that  basic claim is disputed obviously the issue has to be  adjudicated by the forum which is competent to adjudicate.  The sine qua non for application of the concept of unfair  labour practice is the existence of a direct relationship of  employer and employee. Until that basic question is decided,  the forum recedes to the background in the sense that first  that question has to be got separately adjudicated. Even if it  is accepted for the sake of arguments that two forums are  available, the court certainly can say which is the more  appropriate forum to effectively get it adjudicated and that is  what has been precisely said in the three decisions. Once the  existence of a contractor is accepted, it leads to an inevitable  conclusion that a relationship exists between the contractor  and the complainant. According to them, the contract was a  facade and sham one which has no real effectiveness. As  rightly observed in Cipla case it is the relationship existing  by contractual arrangement which is sought to be  abandoned and negated and in its place the complainant’s  claim is to the effect that there was in reality a relationship  between the employer and the complainant directly. It is the  establishment of the existence of such an arrangement  which decides the jurisdiction. That being the position, Cipla  case rightly held that an industrial dispute has to be raised  before the Tribunal under the ID Act to have the issue  relating to actual nature of employment sorted out. That  being the position, we find that there is no scope for  reconsidering Cipla case the view which really echoed the  one taken about almost a decade back." 16)     In Oswal Petrochemicals vs. Govt. of Maharashtra  and Others, (2005) 12 SCC 433 which is also a two-Judge  Bench, while considering the very same Act, namely, the  MRTU and PULP Act, 1971 following the judgment of this  Court in Cipla Ltd. (supra) disposed of the appeal on the  same terms. 17)     Though Mr. Deshmuk, learned counsel for the Union  relied on several decisions and also highlighted that all the  above referred decisions are distinguishable, it is useful to  refer to a three-Judge Bench decision of this Court in Indian  Petrochemicals Corporation Ltd. and Another vs. Shramik  Sena and Others, (1999) 6 SCC 439.  This is an appeal  preferred by M/s Indian Petrochemicals Corporation Limited  and another (Management) against an order dated 29-8-1997  made by the High Court of Judicature at Bombay in W.P. No.  2206 of 1997 filed by the Shramik Sena and another  (workmen).  Against the very same judgment, the workmen  also filed appeal being C.A. No. 1855 of 1998.  Both the  appeals clubbed together, heard and disposed of by the said  common judgment.  The workmen therein filed a writ petition  before the High Court of Bombay for a declaration that the  workmen whose names are shown in Ex. ’A’ annexed to the  said petition, are the regular workmen of the Management and  are entitled to have the same pay scales and service conditions  as are applicable to regular workmen of the Management. It  was further prayed that a direction be given to the  Management to absorb the workmen listed in the said Ex. ’A’  with effect from the actual date of their entering into the

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service of the canteen of the Management and to pay them all  consequential benefits including arrears of wages etc. 18)     According to the workmen, the workers listed in Ex. ’A’ to  the petition are working in the canteen of the Management in  its factory at Nagothane, District Raigad in the State of  Maharashtra, and the Management was treating them as  persons employed on contract basis through a contractor  named M/s Rashmi Caterers, who was impleaded in the writ  petition as Respondent 5.  It was contended on behalf of the  above workmen that the factory of the Management where the  workmen are employed, is governed by the provisions of the  Indian Factories Act, 1948 and the canteen where the said  workmen are employed is a statutory canteen established by  the Management as required under the said provisions of the  Act.  It was further contended that the said canteen is  maintained for the benefit of the workmen employed in the  factory and the Management had direct control over the said  workmen and that Respondent 5, though shown as a  contractor, has no control over the Management,  administration and functioning of the said canteen. The  canteen is a part of the establishment of the Management and  the workers working in the canteen are the workmen of the  said Management.  The further contention of the workmen was  that the work carried on by them in the said canteen is  perennial in nature and the canteen is incidental to and is  connected with the establishment of the Management. It is  their further case that the Management is denying the said  workmen the status of its regular employees and was treating  them as contract employees contrary to the statutory  provisions and judicial pronouncements of this Court. 19)     On behalf of the Management, it was contended before  the High Court that it was a public sector undertaking and it  cannot appoint any person in contravention of the recruitment  policy which requires the Management to follow a roster  system.  Therefore, apart from the fact that the workmen were  not in the regular employment of the said Management, the  absorption or regularisation of the services of the said  workmen would contravene Article 16(4) of the Constitution,  and would also contravene the reservation policy which is  applicable for recruitment in the establishment managed by it. 20)     The High Court, following the decision in Parimal  Chandra Raha vs. LIC, 1995 Supp (2) SCC 611 allowed the  writ petition holding that since the workmen whose names  were found in Annexure ’A’ to the petition are working in the  statutory canteen of the Management, they are entitled to be  absorbed in the employment of the said Management and also  issued directions in regard to absorption of the employees.  21)     Being aggrieved by the said judgment and order of the  High Court, the Management has preferred C.A No. 1854 of  1998 and being aggrieved by the conditions imposed while  directing the absorption of the employees, on behalf of the  workmen C.A. No. 1855 of 1998 has been preferred before this  Court. 22)     Para 10 of the said decision shows that while considering  at the SLP stage for granting leave, a two-Judge Bench of this  Court observed that the questions involved in these appeals  are of considerable importance and it will be desirable if the  same is decided by a Bench of three Judges.  Consequently,  both the appeals were heard by a three-Judge Bench.  Similar  contentions as raised in the case on hand were raised on  behalf of the Management and Workmen.  No doubt, taking  note of the definition 2(l) of the Factories Act which defines  "worker", did not accept the workmen’s contention that  employees of a statutory canteen ipso facto become the  employees of the establishment for all purposes.  After

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considering Parimal Chandra Raha’s case (supra) and  M.M.R. Khan vs. Union of India, 1990 Supp SCC 191 and  Reserve Bank of India vs. Workmen, (1996) 3 SCC 267, this  Court concluded 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.  Had the  three-Judge Bench stopped therein, we have no other option  except to apply the principle as stated in General Labour  Union (Red Flag) case (supra), Vividh Kamgar Sabha case  (supra), Cipla Ltd. case (supra), Sarva Shramik Sangh  case (supra) and Oswal Petrochemicals.  However, from  para 23 onwards, the three-Judge Bench discussed the main  issue with which we are concerned, namely, "whether from the  material on record it could be held that the workmen are, in  fact, the employees of the Management for all purposes".   Since the factual details that arose in the Indian  Petrochemicals case (supra) are identical to the case on  hand, we reproduce the following discussion and the ultimate  conclusion:  "25. Though the canteen in the appellant’s establishment is  being managed by engaging a contractor, it is also an  admitted fact that the canteen has been in existence from  the inception of the establishment. It is also an admitted fact  that all the employees who were initially employed and those  inducted from time to time in the canteen have continued to  work in the said canteen uninterruptedly. The employer  contends that this continuity of employment of the  employees, in spite of there being a change of contractors,  was due to an order made by the Industrial Court, Thane, on  10-11-1994 wherein the Industrial Court held that these  workmen are entitled to continuity of service in the same  canteen irrespective of the change in the contractor.  Consequently, a direction was issued to the Management  herein to incorporate appropriate clauses in the contract  that may be entered into with any outside contractor to  ensure the continuity of employment of these workmen. The  Management, therefore, contends that the continuous  employment of these workmen is not voluntary. A perusal of  the said order of the Industrial Court shows that these  workmen had contended before the said Court that the  Management was indulging in an unfair labour practice and  in fact they were employed by the Company. They specifically  contended therein that they are entitled to continue in the  employment of the Company irrespective of the change in the  contractor. The Industrial Court accepted their contention as  against the plea put forth by the Management herein. The  employer did not think it appropriate to challenge this  decision of the Industrial Court which has become final. This  clearly suggests that the Management accepted as a matter  of fact that the respondent workmen are permanent  employees of the Management’s canteen. This is a very  significant fact to show the true nature of the respondents’  employment. That apart, a perusal of the affidavits filed in  this Court and the contract entered into between the  Management and the contractor clearly establishes: (a) The canteen has been there since the inception of the  appellant’s factory. (b) The workmen have been employed for long years and  despite a change of contractors the workers have continued  to be employed in the canteen. (c) The premises, furniture, fixture, fuel, electricity, utensils  etc. have been provided for by the appellant. (d) The wages of the canteen workers have to be reimbursed  by the appellant. (e) The supervision and control on the canteen is exercised

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by the appellant through its authorised officer, as can be  seen from the various clauses of the contract between the  appellant and the contractor. (f) The contractor is nothing but an agent or a manager of  the appellant, who works completely under the supervision,  control and directions of the appellant. (g) The workmen have the protection of continuous  employment in the establishment.  26. Considering these factors cumulatively, in addition to  the fact that the canteen in the establishment of the  Management is a statutory canteen, we are of the opinion  that in the instant case, the respondent workmen are in fact  the workmen of the appellant Management. 27. At this stage, it is necessary to note another argument of  Mr Andhyarujina that in view of the fact that there is no  abolition of contract labour in the canteen of the appellant’s  establishment, it is open to the Management to manage its  canteen through a contractor. Hence, he contends that by  virtue of the contract entered into by the Management with  the contractor, the respondent workmen cannot be treated  as the employees of the Management. This argument would  have had some substance if in reality the Management had  engaged a contractor who was wholly independent of the  Management, but we have come to the conclusion on facts  that the contractor in the present case is engaged only for  the purpose of record and for all purposes the workmen in  this case are in fact the workmen of the Management. In the  background of this finding, the last argument of Mr  Andhyarujina should also fail."

23)     In the light of above background, let us consider the  factual details available and as asserted in the complaint of  the Union filed in our case.  In order to establish the specific  plea raised in the complaint, the complainant has examined  one Dagdu Deshmukh and Shankar Nam Patil.  Both of them  are working in the canteen.  According to Deshmukh, he  joined the Company on 22.02.1982 and according to Shankar  he is in the service of the Company from 01.11.1989.  The  Complainant has enclosed a list of the employees working in  the canteen in the Annexure to the complaint.  The Industrial  Court, on perusal of the said list, found that they joined the  service in different years since 1978 till 1992.  Most of them  have worked for more than 10 years.  The Industrial Court has  also concluded that their dates of joining mentioned in  Annexure to the complaint have not been disputed by the  Company.  It is also demonstrated before the Court that there  were number of contractors since 1971 till the contract was  taken by M/s Gambhir Caterers, since 1965 to 1968 one  Mehra was the canteen contractor.  Thereafter, in 1968, one  S.S.Shetty worked as a Canteen Contractor.  He was running  the said canteen for 14 years.  Thereafter, the Universal  Caterer was the Canteen Contractor from 1981 to 1995.  After  1995, Gambhir Caterer is the Canteen Contractor.  It is  relevant to mention and in fact not disputed that in spite of  the changes in the Canteen Contractor the service of the  canteen employees continued and they were not issued fresh  appointment orders by any of the canteen contractors  including the last one, namely, Gambhir Caterer.   24)     The Industrial Court analysed the evidence of  Complainant’s witness and also the evidence of the Company.   From the evidence and other materials, the Court noted the  following information: (a)     Canteen has been in existence since 1965.  (b)     Canteen employees were working in four shifts. (c)     Canteen is situated in the company premises.

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(d)     The company has provided utensils, gas and other  articles like chair, table, etc. (e)     The company has also provided room to the canteen  employees for their residential complex. (f)     Seven to Eight employees who are bachelors are  residing in the said room.  (g)     The company has provided electricity and water.   Respective charges are not being deducted from the  wages of the employees.  (h)     The company has also supplied umbrellas for the  rainy season. (i)     The company is paying maintenance charge and  electricity charge and other expenses of the canteen.  (j)     All the facilities including premises to the canteen  are provided by the company.  (k)     The wages of employees of the canteen are  reimbursed by the company.  (l)     The company is purchasing the food items. (m)     When ever there is rise in the wages of the  employees, it is the company who is to pay the  same. (n)     The company is providing three sets of uniforms to  the employees and also providing service  washermen.  (o)     The employer’s contribution P.F. is reimbursed by  the company.  (p)     In the past the company has regularized some of the  employees working in the canteen. From the above, it is clear that all the facilities to the canteen  are provided by the company.  25)     It is true that Sridhar Bhandari, the Manager of Gambhir  Caterer, in his evidence has stated that the workers are  keeping the attendance card, muster roll (Ex.C-12 and C-13)  and payment details of Gambhir Caterer.  In view of the above  statement, the Industrial Court ventured to find legitimate  control over the activities of the canteen employees.  While  considering the said issue, the Court verified various terms of  agreement dated 28.11.1995.  The relevant terms have been  reproduced in para 49 of the order of the Industrial Court  which clearly show that it is the duty of the company to  provide canteen premises free of rent along with free water,  electricity, fuel, furniture, fixtures, crockery and all cooking  utensils.  It further shows that the company has fixed the rate  of meals, eatables, snacks, tea and beverages etc.  As rightly  pointed out by the Industrial Court, apart from the evidence  let in on the side of the union and the company from the terms  of contract, it is clear that it is the duty of the company to  provide sufficient premises, furniture, fuel, gas, electricity,  water and also laid down several procedure as to how food  items to be supplied.  As rightly concluded by the Industrial  Court, the company has clearly laid down the quality,  quantity, the rates and manner of supplying food articles.   After adverting to clause (d) (1)(2) of the agreement, the  Industrial Court has concluded that though responsibility is  cast upon the contractor to make payment of wages, P.F.  contribution etc. on submission of the bills, the amounts are  to be paid/reimbursed by the company.  The above details  clearly show that though certain amounts are being paid by  the contractor, in the real sense, ultimately, it is the company  which pays all the amounts.  From the evidence and the  materials, it is also clear that the activities of the workmen in  the canteen, their suitability to work, physical fitness are  ultimately controlled by the company.  In those  circumstances, the Industrial Court is perfectly right in  arriving the conclusion that the evidence coupled with the

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terms of agreement show that the contract is nothing but  paper agreement.  As stated earlier, in spite of change of  several contractors, neither the workmen were replaced nor  fresh appointments were made.  On the other hand, same  workmen were continuing even on the date of filing of the  complaint.  Taking note of all the above-mentioned relevant  materials, special circumstances and most of the employees  are working for more than 10-15 years and finding that there  is no valid reason for the company to deny their permanency,  the Industrial Court rightly concluded that the company has  committed unfair labour practice under Item 9 of Schedule IV  of the MRTU and PULP Act, 1971 and issued appropriate  directions.  With the materials placed, we are also of the  opinion that even though the record shows that canteen is  being run by the contractor, ultimate control and supervision  over the canteen is of the Company.  Inasmuch as the facts on  hand are identical to the decision in Indian Petrochemicals  Corpn. Ltd. case (supra) which is a three-Judge Bench  decision which was not cited before any of the decisions relied  on by the company, in view of the circumstances narrated in  the earlier paras, we accept the conclusion arrived by the  Industrial Tribunal.  26)     Coming to the impugned order of the High Court, it is  argued that in spite of the earlier direction of this Court in SLP  (C) No. 9244 of 1999, the High Court has not adverted to the  relevant aspects and committed the same error in confirming  the order of the Industrial Court.  In the light of the said  contention, we have gone through the impugned decision of  the High Court, which clearly shows that the High Court was  conscious about the observation of this Court.  The High Court  order further shows that it has adverted to the relevant details  furnished before the Industrial Court and analysed the same  and finally after recording that the finding of fact arrived by  the Industrial Court cannot be termed as perverse and they  are based on proper appreciation of evidence and sound  reasoning dismissed the Letters Patent Appeal.  We do not see  any error or infirmity in arriving such conclusion.  On the  other hand, as discussed above, we are in entire agreement  with the conclusion arrived by the Industrial Court and  affirmed by the High Court.  27)     In the light of what has been stated above and in view of  abundant factual details as mentioned in para 24 of this  judgment as well as the reasonings as laid down in Indian  Petrochemicals Corpn. Ltd. case (supra), we reject the  stand taken by the appellant-Company.  Accordingly, the  appeal fails and the same is dismissed.  Inasmuch as the  Industrial Court has issued directions as early as on  15.10.1998 and not implemented due to court proceedings, we  direct the appellant-Company to implement the same within a  period of three months from the date of receipt of copy of this  judgment.  No costs.