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CASE NO.: Special Leave Petition (civil) 7371  of  1998 Special Leave Petition (civil)  10674    of  1998 Special Leave Petition (civil)  10675    of  1998 Special Leave Petition (civil)  10701-10702      of  1998 Special Leave Petition (civil)  11057    of  1998 Special Leave Petition (civil)  11651    of  1998 Special Leave Petition (civil)  12651    of  1998 Special Leave Petition (civil)  20769    of  2000 Special Leave Petition (civil)  6285     of  1998 Special Leave Petition (civil)  7420     of  1998 Special Leave Petition (civil)  7580     of  1998 Special Leave Petition (civil)  7581     of  1998 Special Leave Petition (civil)  7582     of  1998 Special Leave Petition (civil)  8125     of  1998 Special Leave Petition (civil)  8127     of  1998 Special Leave Petition (civil)  8179     of  1998 Special Leave Petition (civil)  8192     of  1998 Special Leave Petition (civil)  8202-8205        of  1998 Special Leave Petition (civil)  8290     of  1998 Special Leave Petition (civil)  8315     of  1998 Special Leave Petition (civil)  9893-9897        of  1998 Special Leave Petition (civil)  6515     of  1999

PETITIONER: BARAT FRITZ WERNER LTD.

       Vs.

RESPONDENT: STATE OF KARNATAKA

DATE OF JUDGMENT:       02/02/2001

BENCH: S. Rajendra Babu & S.N. Variava.

JUDGMENT:

L...I...T.......T.......T.......T.......T.......T.......T..JJ U D G M E N T

RAJENDRA BABU, J. :

   On the basis of a report made by the National Commission on  Labour in the year 1966 in paragraph 9.10 to the  effect that  the practice of employing contract labour is prevalent in varying degree in almost all the industries and services. Since  the  system of employment of contract labour  led  to various   abuses,   the  question  of  its   abolition   was accentuated.  There had been consistent demand by the labour for abolishing the system of contract labour.

   The   dispute  relating  to   contract  labour  or   its absorption  by  the employer was, therefore, held to  be  an industrial dispute.  [Standard Vacuum Refining Co.  of India Ltd.    vs.   Its  Workmen  &   Anr.,  1960  (3)  SCR  466]. Thereafter  industrial adjudication interfered to abolish or modify   the  system  of   contract  labour  in   industrial undertakings depending on the facts arising in each case.

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   Then  came on the scene the fate of contract workers  in the  canteen established as mandated under Section 46 of the Factories  Act,  1947.   In   Saraspur  Mills  Co.Ltd.   vs. Ramanlal  Chimanlal  &  Ors., 1973 (3) SCR 967, in  view  of Section  46  of the Factories Act and rules made  thereunder requiring  an  employer  to provide a canteen in  a  factory where  more than 250 workers are employed for the use of the workers even if run by a cooperative society were workmen of the  factory  as  it  was under a  mandatory  obligation  to maintain  and  run  the  canteen.  This  question  was  more elaborately  dealt with in M.M.R.Khan & Ors.  vs.  Union  of India  & Ors., 1990(Supp) SCC 191.  In that case, this Court was  concerned  with canteen run by  Railway  establishments falling into three different categories :

   1.   Canteens  compulsorily provided either pursuant  to Section  46  of the Factories Act or under  other  enactment described as statutory factories;

   2.   Canteens set up as a staff welfare measure with the approval   of  the  Railway  Board   in  terms  of   Railway Establishment Manual;

   3.   Canteens  established  though as  a  staff  welfare measure  but  without the approval of the Railway  Board  in terms of Railway Establishment Manual.

   The  employees  falling  in  the first  and  the  second categories  were  held  to  be   employees  of  the  Railway establishment  while  the  employees falling  in  the  third category were not held to be so.

   In  All India Railway Institute of Employees Association vs.   Union  of  India, 1991 (2) LLJ 265, again  this  Court dealt  with this question where the employees in the Railway Institute  or  clubs  were not treated as employees  of  the Railway establishment.

   In the meanwhile, law further developed in such a manner that even in relation to employees working in those canteens who  were  not  established pursuant to Section  46  of  the Factories Act but pursuant to a settlement entered into with the  employees  or  under  an award made  by  an  industrial Tribunal or by way of a condition of service, the matter was examined  in  Parimal Chandra Raha & Ors.  vs.   L.I.C.   of India  & Ors., 1995 Supp.  (2) SCC 611, that such  employees must  be  treated  as employees of  the  establishment.   Of course,  in Indian Petrochemicals Corpn.  Ltd.  & Anr.   vs. Shramik  Sena & Ors., 1999(6) SCC 439, 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 in relation to the Management of  RBI vs.  Workmen, 1996(3) SCC 267, this Court struck a different note.   Again  this  Court  in   Indian  Overseas  Bank  vs. I.O.B.Staff Canteen Workers Union & Anr., 2000 (4) SCC 245, considered  the effect of the decisions in MMR Khan [supra], Parimal  Chandra Raha [supra], Employers in relation to  the Management  of RBI [supra] and Indian Petrochemicals  Corpn. Ltd.  & Anr.  vs.  Shramik Sena & Ors., 1999(6) SCC 439, 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

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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  these cases  that  exercise  may  not be required.   What  we  are concerned  with  here is the validity of  the  notifications under the Contract Labour [Regulation & abolition] Act, 1970 [hereinafter referred to as the Act].

   A notification was issued by the Government of Karnataka under  Section  10 of the Act on 11.4.1997 prohibiting  with effect  from  the date of publication of  the  notifications employment  of  contract labour in industrial  canteens  and factories  employing  250 workers or above in the  State  of Karnataka.   Writ petitions were filed before the High Court of Karnataka challenging the validity of the same on various grounds.  However, the High Court upheld the validity of the said  notifications and dismissed the writ petitions.  Hence these petitions under Article 136 of the Constitution.

   Before we embark upon the contentions that are raised in these  cases,  it  may be necessary to  briefly  survey  the provisions contained in the Factories Act and the Act.

   The  Factories  Act  was  enacted to  regulate  the  law relating  to  labour  in  factories.    Section  46  of  the Factories  Act  provides 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.  Section  2(n)  defines  the expression  occupier  to  mean a person who  has  ultimate control  over  the  affairs  of   the  factory  and  further enumerates the persons who could be deemed to be occupier in case  of  a firm, a company or a Government.   Section  2(l) defines  the  expression  worker to mean a person  who  is employed,  directly or by or through any agency (including a contractor)  with or without the knowledge of the  principal employer,   whether   for  remuneration  or  not,   in   any manufacturing  process,  or  in  cleaning any  part  of  the machinery  or premises used for a manufacturing process,  or in  any other kind of work incidental to, or connected with, the   manufacturing   process,  or   the  subject   of   the manufacturing process but does not include any member of the armed  forces.   Rule 93 of the Karnataka  Factories  Rules, 1969,  framed  under Section 46 of the Factories Act by  the State  of  Karnataka,  provides that the occupier  of  every factory  notified by the State Government, and wherein  more than 250 workers are ordinarily employed shall provide in or near  the  factory  an  adequate canteen  according  to  the standards  prescribed in the rules.  Thereafter the  details regarding  building,  provision  for dining  hall,  kitchen, store room, pantry and washing places separately for workers and  for utensils are provided.  Rule 94 of the Rules  gives the  details  regarding dining hall.  Rule 95  requires  the occupier  to  provide  and   maintain  sufficient  utensils, crockery,  cutlery,  furniture  and   any  other   equipment necessary  for  the  efficient running of the canteen  in  a clean  and  hygienic  condition.  Rule 96(1)  provides  that food,  drink and other items served in the canteen shall  be sold  on a non-provide basis and the prices charged shall be subject  to the approval of the Canteen Managing  Committee, provided  that if the management bears the cost of wages  of canteen   staff,  buildings,  water,   lighting,  fuel   and

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insurance,  it  shall  not be incumbent on them to  run  the canteen  on  any  further loss to  themselves.   Thereafter, certain  details  have  been  set forth as  to  what  to  be computed  as  part of the expenditure in fixing the  prices. Rule  97  provides for maintenance of the canteen.  Rule  98 provides  for  appointment of a Canteen Managing  Committee. Rule  99 provides for food-stuffs to be served and prices to be   charged.   Rule  99-A   provides  for  annual   medical examination  for  fitness of each member of  canteen  staff. Rule  100 provides for shelter room, rest room and the lunch room.

   Now we may have a look at the provisions of the Act.

   Under  Section  2(c)  of  the Act,  a  contractor,  in relation  to an establishment, means a person who undertakes to  produce  a  given result for the  establishment.   Under Section 2(i) of the Act, a workman is a person employed in or  in  connection with the work of any establishment to  do any skilled, semi-skilled or un-skilled manual, supervisory, technical  or  clerical work.  A workman is deemed to be  as contract  labour  in  or in connection with the work  of  an establishment when he is hired in or in connection with such work  by  or  through  a contractor,  with  or  without  the knowledge of the principal employer.  Chapter III of the Act provides   for  registration  of  establishments   employing contract  labour in which apart from regulating the contract labour  the  appropriate  Government may  also  provide  for prohibition  of  the  same  under Section  10  of  the  Act. Section  10  of the Act enables the  appropriate  Government may,  after consultation with the Central Board, as the case may  be,  a  State Board, prohibit, by notification  in  the official  gazette,  employment  of contract  labour  in  any process,  operation  or  other work  in  any  establishment. Before  issuing a notification as aforesaid, the appropriate Government  shall have regard to the conditions of work  and benefits   provided   for  the   contract  labour  in   that establishment and other relevant factors such as:

   (a)  whether  the  process, operation or other  work  is incidental  to,  or  necessary   for  the  industry,  trade, business,  manufacture  or occupation that is carried on  in the establishment;

   (b)  whether it is of perennial nature, that is to  say, it  is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation that is carried on in the establishment;

   (c)  whether  it  is  done  ordinarily  through  regular workmen  in  that establishment or an establishment  similar thereto;

   (d)  whether  it  is sufficient to  employ  considerable number of whole-time workmen.

   Under Section 2(e) of the Act, establishment means any office or department of the Government or a local authority, or   any   place  where   any  industry,  trade,   business, manufacture or occupation that is carried on.

   In  the background of these provisions, the  contentions put  forth  before us on behalf of the Petitioners are  that the  worker under the Factories Act is defined as  meaning a  engaged  directly  or through any  agency  (including  a

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contractor) in any manufacturing process, or in cleaning any part  of the machinery or premises used for a  manufacturing process  or  in  any  other kind of work  incidental  to  or connected  with the manufacturing process or subject to  the manufacturing process;  that the worker engaged in a canteen is  not  in  any  activity connected  in  the  manufacturing process.   The canteen being only a facility offered to  the workmen  and  is  dependent only on the  number  of  workmen employed  in the factory namely, the figure being in  excess of  250  and  on  no other consideration;   that  under  the Karnataka  Factories  Rules,  1969,  it  has  been   clearly provided under proviso to Rule 96(1), that if the management bears  the cost of wages of canteen staff, buildings, water, lighting,  fuel and insurance, it shall not be incumbent  on them  to run the canteen on any further loss to  themselves, which  clearly  indicates  that in such  circumstances  they could  do  so through an intermediary;  that even where  the Act  applies, the Act makes a clear distinction between the prohibition  of  contract  labour and  the  regulation  of contract labour;  that the prohibition is contemplated only in  respect  of operations which are activities closely  and intimately  connected  with the main activity of factory  or establishment  and where it is not, then section 10 does not apply  and  the  regulatory sections of the  Act  come  into place;   that  the  basis on which contract  labour  can  be abolished  under the section is that it should relate to the manufacturing,  industry, trade, business or occupation that is  carried  on  in the establishment;  in  other  words  in matters integral to the work in the establishment and not to a  mere  facility  in respect of its workmen as  defined  in Section  2(l)  of the Factories Act;  that the abolition  of contract  labour  can  be effected only in respect  of  work which is integral to the industry and vitally connected with the  work carried in the establishment or factory and relied in support of this proposition on the following decisions:

   (i)  Standard Vacuum Refining Co.  (supra).  [That was a case of cleaning of the machinery.]

   (ii)  Shibu Metal Works vs.  Their Workmen, 1966 (1) LLJ 717.   [Being  employed  for work which was of  a  permanent nature  as  it  was a part of manufacturing process  of  the goods manufactured in the factory.]

   (iii)  Vegoils  Pvt.  Ltd.  1972 1 SCR 673.   [that  the feeding  of  hoppers in the solvent extraction plant  is  an activity closely and intimately connected with main activity of the appellant namely crushing oil cakes and oil seeds for extraction of oil and other chemical production.]

   The   learned  counsel  for   the  Petitioners   further submitted  that  thus  the  Act makes  a  clear  distinction between activities germane and intimately connected with any particular  industry  and other activities which are not  so connected;   that the prohibition of employment of  contract labour  is  confined to process;  operation and other  works which is incidental to or necessary for the industry trade, business,  manufacture  or occupation that is carried on  in the  establishment.   This  was  so, also in  the  case  of Catering  Cleaners of Southern Railways v.  Union of  India, 1987  (2)  SCR  164, where in this court observed  that  it appears  to  be  clear that the work of  cleaning,  catering establishment  and pantry car is necessary and incidental to the  industry  or  business  of  the  Southern  Railway  and therefore  the requirement of Section 10(2) is  satisfied.;

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that  the dichotomy in the Act is emphasized in the case  of Gammon  India  Ltd.,  etc.etc., vs.  Union of India  &  Ors. etc.,  1974  (3) SCR 665, at pages 669 and 670.   The  words other  work  in any establishment in Section 10 are to  be construed  as ejusdem generis.  The expression other  work in the collection of words process, operation or other work in  any  establishment occurring in section 10 has not  the same  meaning as the expression in connection with the work of  an  establishment,  spoken in relation  to  workmen  or contractor  (and occurring in definition of section2);  that in  the two cases Parimal Chandra Raha (supra) and the  case of Reserve Bank of India (supra) it is made clear that where the  intention  is only to provide an extra facility to  the workmen  that  different considerations arise and it is  not necessary  that the facility should be accorded only through the employment of permanent workmen.

   Apart   from  these   contentions,  further  contentions addressed  by the Petitioners are that there is no effective consultation  as required under Section 10 of the Act by the State  Government before issuing the impugned  notifications prohibiting  employment  of contract labour in  the  canteen establishments  nor  is  there application of  mind  to  the various  factors  such  as conditions of work  and  benefits provided  for  the contract labour in the establishment  and other  relevant  factors  given  under  sub-section  (2)  of Section  10  of  the  Act.  We will advert  to  the  various details of these arguments when we deal with this aspect.

   In  reply, the learned Advocate General and Smt.  Indira Jaising,  learned  senior counsel, have contended  that  the definition  of a worker or a factory under Factories At, 1948,  will  not be of guidance nor relevant in  determining the  question  as to whether the provision of a  canteen  is incidental  to  the  industry and  whether  contract  labour engaged for the same should be abolished under Section 10 of the  Contract  Labour (Regulation and Abolition)  Act,  1970 (Act);   that  this is so because the Act concerns  itself with  an establishment defined in Section 2(e)(ii) as any place  where  any industry, trade, business, manufacture  or occupation  is  carried on;  that the definition  does  not confine  itself to the manufacturing alone;  that  Section 46  of the Factories Act mandates that any factory with more than  250  workers must provide and maintain a  canteen. Therefore the responsibility of provision and maintenance of a  canteen  in  or  near the factory is not  one  of  mere provision  but also one of maintenance.  This is  buttressed by  the  Rules  93  to 99;  that the work of  a  canteen  is therefore  not  only  incidental  to,  but  also  absolutely necessary  and  integral  to  the  operation  of  a  factory employing  250  or  more  workmen.   (See  :   J.K.   Cotton Spinning  &  Weaving  Mills Co Ltd.  v.  Badri Mali  &  Ors. (1964  (3)  SCR 724);  that an establishment  which  engages more  than  250  workers must out of  necessity  maintain  a canteen;  that Section 10 of the Act prefixes the listing of relevant  factors  with  the  words   such  as,  a  term interpreted  by this Court in Royal Hatcheries Pvt Ltd.   v. State  of  A.P.   & Ors.  (1994 Supp (1) SCC 429),  to  mean only  illustrative  and  not exhaustive.  (See  also  Shri Sitaram  Sugar Company Limited & Anr.  vs.  Union of  India, 1990  (3)  SCC 233);  that various factors will have  to  be looked  at  and  the  same  would  weigh  more  than  others depending  upon  the class of establishments in  respect  of whom the Government is examining abolition;  that in respect of  the  class  of establishments employing  more  than  250

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workers,  the  factor  which weighs strongly is  running  of canteen as a statutory necessity ;  that from this statutory obligation  flows the other criterion, its perennial nature, as  long as the factory employs 250 or more workmen it has a continuing  obligation;  that it has also been  consistently held  that the practice of employing contract labour in jobs of a perennial nature is baneful, archaic and medieval and not suitable to modern times.  The Act itself was introduced to  prevent exploitation and unjust labour practices;   that there  exists no right to employ contract labour,  abolition does  not  result  in deprivation of any  right;   that  the character  of  the  exercise  viz a  viz  Section  10  being legislative,  the  court  ought not to  interfere  with  the notification;   that  the abolition being qua the  process and not qua the establishment, the characteristic feature of any  establishment  is  an  irrelevant  consideration  under Section  10;   that  it   has  been  consistent  legislative practice  to  issue  notification qua a process and  not  an establishment/company  as held in Air India Statutory Corpn. v.   United Labour Unions, 1997 (9) SCC 59;  that a decision under Section 10 is not quasi judicial as if it were so, the legislature  would have statutorily built in the  safeguards of  natural justice e.g.  the revocation of a licence  under Section  14 of the Act;  that the character of the  exercise is quasi-legislative and it is a conditional legislation and is  therefore  subject  to no  pre-decisional  due  process. (State  of Tamil Nadu v.  K.  Sabanagam, 1988 (1) SCC  318]; that despite the act being quasi-legislative, the Act and in the  instant  case  the action of the board as well  as  the State  Government has ensured a fair process in the decision making.   The Act ensues fairness by providing a  tripartite composition  for the Board including representatives of  the management  and  contractors, the Board ensured fairness  by providing  a  public  notice (internal page 26  of  impugned order)      and        receiving        and      considering representations/objections  and obtaining reports in respect of  major  areas (internal page 31 of impugned order).   The Government  ensured  fairness by not accepting  the  Boards advice  in  routine but permitted the employers to put  on record  their  objections (internal page 31 of the  impugned order).   (See  :Shri Sitaram Sugar Co.  Ltd (supra);   that out  of  the  740 odd affected industries only  a  few  have impugned  the  notification and the in any event, it is  not the  case  of the petitioners such as ITC and L&T that  they have   not   been   given  an    opportunity   to   make   a representation/objections             before             the Board/Committee/Government.   In fact it is their case  that they  made did make representations.  In the  circumstances, the  decision making process has been fair;  that Section 10 of  the  Act permits the appropriate Government  to  abolish contract   labour   in  respect  of   any   work   in   any establishment;   that  this  Court  in  Lucknow  Development Authority  v.  M.K.  Gupta (1994 (1) SCC 243) has held  that the  word  any ordinarily means one or some or  all  and that  in  that context was used in a wider sense  extending from  one to all;  that it follows that power in respect of abolishing  a process, operation or other work in  respect of one establishment could well be exercised to cover some and  even all, if the circumstances so warrant;  that  the manner of exercise of the power is left to the discretion of the  State  Government.  The Government may consider that  a certain activity is typical in an industry and it would be unproductive to mandate that it this quasi-legislative power be  applied  in instalments or by examining each  and  every unit  of  that industry;  that, in any event,  as  evidenced

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from  the statement of objects and reasons for the Act, the proposed  Bill  aims at the abolition of contract labour  in respect  of  such  categories  as may  be  notified  by  the appropriate  government,  the Act concerns itself not  with the  nitty gritty of each and every establishment, but  with categories,  types  and  classes of activities  which,  if undertaken  through contract labour, may warrant  abolition; that  this Court in Gammons Case (supra) has laid down that the  fundamental  norm of the Act is abolition and  only  if abolition  is  not  possible  would   the  options  such  as regulation  be  considered;   that  defences  of  industrial sickness  and/or  arrangement through co-operatives  do  not hold  water;   that  once   the  appropriate  Government  in consultation  with the Board is of the opinion that  Section 10(2)  of the Act conditions apply, it should as a norm  opt for  the  abolition option unless a strong case can be  made out  for  a lesser alternative;  that the courts have  in  a catena  of  case law held that in judicial review the  Court shall  not  sit in judgment over the material or the  result but restrict its examination to only limited grounds such as perversity  and  gross injustice would the Court  interfere; that  even in the absence of a Section 10 notification, this Court  has  held  canteen  workers to be  employees  of  the concerned  industry..   In  the   instant  case,  given  the notification, the case is on strong footing.

   The  High Court in the course of its judgment considered similar  contentions  raised before it.  After referring  to the objectives of the Act and the decisions of this Court in Royal  Hatcheries  Pvt.  Ltd.  vs.  State of A.P.,  [supra], and  Gammon India Ltd.  [supra] the High Court held that the policy  of  the Act was to abolish contract labour  wherever possible  and  where it cannot be altogether abolished,  the policy  of the Act is to regulate the working conditions  of the contract labour to ensure payment of wages and essential amenities.   While opining as to whether contract labour has to  be abolished or not the consideration that has to be had to  the fact as to whether contract labour is necessary  for the  industry,  trade, business, manufacture  or  occupation which  is  carried on in the establishment.  The High  Court further  held that the Government before taking the decision to  issue  the notification did bear in mind  the  necessary factors  in  this  regard.  The High Court referred  to  the nature  of  the composition of the Advisory  Board,  various deliberations  of the meetings of the Advisory Board and the files  of  the Government relating to the decision taken  to abolish the contract labour.  After a detailed discussion in the  course of its noting, the Government decided to abolish the   contract  labour  from   canteens  in   establishments employing  250  or more employees.  All facts that had  been raised  by various groups of persons have been taken note of apart  from  requirements  of the statute and  thereafter  a decision  has been taken by the Government.  The High  Court noticed  that  the running of the canteen is of a  perennial nature and the canteen is provided pursuant to the mandatory requirement  of the Factories Act where there are more  than 250  workers.  The canteen having been established  pursuant to  the  requirement of Section 46 of the Factories Act  the same  would be incidental and connected with the work of the establishment.  The fact that maintaining is not part of the core  or  competency  of  the  industry  is  irrelevant  for deciding  the question whether the contract labour should be abolished  or  not.  On this basis, the High  Court  decided against the Petitioners.

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   From  what we have narrated above, it is clear that  the Petitioners  have made provisions for running of the canteen in  their establishments through a contractor at any rate on the  basis  that  as a mandatory requirement of  law  or  as contended for some of the Petitioners under the rules framed under  the Factories Act to make provision for establishment of a canteen even assuming for a moment that the Petitioners have  provided only for facilities to run a canteen and they are  not themselves running the canteen but it is only  with the  help  of a contractor the same is being run subject  of course  to  the restrictions placed in the Act in regard  to the  price  and the provisions made by the canteen  managing committee  even  so the fact remains that they fall  into  a particular  class of persons namely factories engaging  more than  250 workmen in respect of whom canteen facilities have been  provided  in terms of Section 46 of the Factories  Act and  the rules framed thereunder and in such  establishments the  policy  of  the Government is to see that there  is  no contract labour but direct labour.  To meet this view of the Government,  the  contention  put  forth on  behalf  of  the Petitioners  is  that  the objectives of a  factory  and  an establishment  is  to produce the goods or services  as  the case may be in terms of the Memorandum of Association or any other  document under which it is established and supply  of food  or  beverages  is  not one of  their  objectives  and, therefore,  the workmen in such establishments can never  be treated  as  the  workmen of the factory.  If  at  all  such workmen are treated as workmen of the factory it is only for the  purpose  of the Factories Act as has been held by  this Court  in  IPCL case.  Under the Factories Act, a worker  is defined under Section 2(l) to mean a person who is employed, directly   or  by  or  through   any  agency  (including   a contractor)  with or without the knowledge of the  principal employer,   whether   for  remuneration  or  not,   in   any manufacturing  process,  or  in  cleaning any  part  of  the machinery  or premises used for a manufacturing process,  or in  any other kind of work incidental to, or connected with, the   manufacturing   process,  or   the  subject   of   the manufacturing  process.  The Factories Act has been  enacted to  regulate  labour in factories.  The main object  of  the Factories  Act,  1948 is to ensure adequate safety  measures and  to  promote  the  health and  welfare  of  the  workers employed  in factories initiating various measures from time to  time to ensure that adequate standards of safety, health and welfare are achieved at all work places.  In particular, in  the context of the need to secure maximum production and productivity  an  appropriate  work   culture  conducive  to safety, health and happiness of workers has to be evolved in the   factories.    To  achieve    these   objectives   more effectively,  this  enactment  has been made.  In  fact,  by amendments  to the term worker so as to include within its meaning  contract  labour  employed   in  any  manufacturing process,  improvement of the provisions in regard to  safety and appointment of safety officers, reduction of the minimum number  of  women  employees  have   been  made.   The  said enactment  was intended for the regulation in such a  manner as  to  benefit the welfare of the workers.  Therefore,  the objective  of the Act is to confine the applicability of the Act  only to those workers on the premises of the factory as factory  workmen  and not working in the industry  as  such. The  industry or the establishment which runs the factory is much  larger  expression  and  it includes  not  merely  the workmen in the factory but others also.  In that background, various  provisions have been made in the Factories Act  for

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the  welfare of those who work in the factory and it  became necessary  to  limit  the  number of workers  who  would  be covered  by the Factories Act.  Therefore, the definition of worker  meant to relate to a factory where a manufacturing process  activity  is  carried  as  otherwise  it  does  not constitute a factory.  That definition of worker cannot be read  outside the context of the factories as defined  under the Factories Act.  But if this definition is applied in the manner suggested by the learned counsel for the Petitioners, it  would be doubtful whether those in the Administration or the  Accounts  Department or the Stores or  other  personnel like  a Welfare Officer in the establishment which runs  the factory   can  at  all  be   called  the  employees  of  the establishment  or not.  The kind of definition sought to  be relied upon by the learned counsel for the Petitioners to be read  beyond  the  statute  would lead  to  absurd  results. Therefore,  we  do  not  think we can subscribe  to  such  a submission.   What is to be seen in a case of this nature is the  definition as given in the Act.  The worker therein  is defined  in  a  very broad way.  A workman  would  mean  any person  employed  in or in connection with the work  of  any establishment  whether  he  is  hired with  or  without  the knowledge  of  the principal employer.  We may  also  notice that  even  where  Factories  Act is not  applicable  to  an establishment   but  canteen  facility  is  provided  as   a condition  of  service,  this  Court has  in  several  cases examined  the  question  from various angles  including  the conditions  referred  to in Section 10 of the Act.   If  the arguments  of the learned counsel were to be accepted,  then all  those cases where the question of considering a canteen worker  as  falling  within the ambit of  worker  under  the Factories  Act  would  not arise for that enactment  is  not applicable and would form an officer class of establishments to  which  the  Act would be applicable.  That  is  not  the intention  of the Act at all.  This Court having found  that it is one of the incidental activities of the establishment, which  is  necessary for running it, and after  ascertaining its  perennial or ephemeral nature, done ordinarily  through regular   workers  or  otherwise   and  necessarily   employ whole-time  employees have all been considered and held that these  employees are regular employees of the  establishment without  reference  to the Act.  It cannot be disputed  that the  provision  for  canteen  is   a  welfare  measure   and necessarily  a requirement to run the same is incidental  to the  main activity of the establishment particularly when it becomes a condition of service.  Viewed from this angle, the suggestion  to  examine  the definition of worker  in  the Factories  Act and to find out necessity to have such worker to  run  the establishment will be an academic  exercise  in semantics  without  any  practical effect.   Therefore,  the argument  of  Shri  Pai  that the canteen  workmen  are  not engaged  directly  as workers in a factory and therefore  we should treat such workmen as workers engaged in the industry will not be correct but plainly fallacious.

   In  this  context, we may advert to the decision in  M/s J.K.Cotton  Spinning  &  Weaving Mills  Co.   Ltd.   [supra] wherein  gardeners  engaged  in  maintaining  the  bungalows provided  for the officers of the industry were also treated as  workers.   The  contention put forth on  behalf  of  the Petitioners to distinguish this decision is that it depended on  the definition available under the ID Act as in force in that particular area where the factory had been established. It  is not their case that Factories Act was not  applicable

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in  that area but in order to ascertain whether the  workers are  covered  by  the ID Act or not what was  seen  was  the definition  under the ID Act.  In the same way what we  have to  see  in the present case is the definition of  the  term worker  as  provided under the Act and not  the  Factories Act.   The  learned counsel for the Petitioners relied  upon Section  119  of  the  Factories Act  to  contend  that  the Factories Act would weigh over the Act.  In the first place, the learned counsel is unable to establish that there is any inconsistency between the Factories Act and the Act.  Unless such  inconsistency is pointed out this provision would  not be  attracted  at  all.  Therefore, we have to  reject  this contention  also.  Under Rule 96 of the Karnataka  Factories Rules,  1969,  it has been provided that if  the  management bears  the cost of wages of canteen staff, buildings, water, lighting,  fuel  and insurance it shall not be incumbent  on them  to run the canteen on any further loss to  themselves, which clearly indicate that in such circumstances they could run  the  canteen through an intermediary.  Therefore,  they contend that there is no legal obligation upon them to run a canteen  but their obligation is only to provide  facilities for  running of the canteen by bearing the cost of wages  of canteen   staff,  buildings,  water,   lighting,  fuel   and insurance,  if  the said canteen cannot be carried on in  an economically  viable manner.  But no factual foundation  has been  laid in any of these petitions to point out that  they have incurred losses to themselves in running these canteens and,  therefore,  an  intermediary   has  become  necessary. Unless  that  exercise  is  done  this  argument  cannot  be considered.   The learned counsel for the Petitioners sought to make a distinction arising under Section 10 of the Act in relation to prohibition of contract labour and regulation of contract labour.  They contended that the basis on which contract  labour can be abolished under this section is that it  should  relate  to the manufacturing,  industry,  trade, business   or  occupation  that  is   carried  on   in   the establishment.   In other words, in matters integral to  the work  in  the  establishment and not to a mere  facility  in respect  of  its workmen as defined in Section 2(l)  of  the Factories   Act.   Once  again,   the  argument  cannot   be appreciated  at  all because it would be a matter of  policy for  the Government to prohibit or to regulate the  contract labour  in  an establishment does not necessarily  dependent upon  whether  they  are engaged in the core activity  or  a peripheral activity like the facility of a canteen.  Learned counsel for the Petitioners adverted to certain decisions in Standard  Vacuum Refining Co., wherein the abolition was  in relation  to  the  workmen engaged in the  cleaning  of  the machinery;  Shibu Metal Works, wherein workers being engaged for  work which was of a permanent nature and it was a  part of  manufacturing  process of the goods manufactured in  the factory;   Vegoils Pvt.  Ltd., wherein it was in relation to the feeding of hoppers in the solvent extraction plant which is  an  activity closely and intimately connected with  main activity of the appellant such as crushing oil cakes and oil seeds  for extraction of oil and other chemical  production; Catering Cleaners of Southern Railways where it was observed that the work of cleaning, catering establishment and pantry car  is necessary and incidental to the industry or business of  the Southern Railway and, therefore, the requirement  of Section  10(2) was satisfied.  The words other work in  any establishment  in section 10 are to be construed as ejusdom generis and the expression other work in the collection of words  process, operation or other work in any establishment occurring  in  section  10 has not the same meaning  as  the

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expression in connection with the work of an establishment with reference to a workman or a contractor.

   Section  10  of  the  Act provides  for  prohibition  of employment  of contract labour in any process, operation  or other  work  in  an   establishment.   The  words  Process, operation  or  other work need not be interpreted  to  mean only  the  core activity and not peripheral activity  as  is sought  to be suggested by learned counsel for  Petitioners. In  sub-  section  (2)  of Section 10  of  the  Act  certain guidelines  have been provided for the Government before the issue  of any notification to find out whether the Process, operation  or other work is incidental or necessary for the industry, trade, business, manufacture or occupation that is carried  on  in  the  establishment.   The  expression  used therein  is wide in ambit to cover other activity arising in industry  and not merely the actual manufacture.   Otherwise to  understand  the expression Process, operation or  other work  other  than  the  meaning  given  in  clause  (a)  of sub-section  (2)  of section 10 would be to narrow down  the meaning  thereto.  That does not seem to be the intention of the  enactment at all.  Therefore, we cannot agree with  the submission  made by the learned counsel for the  Petitioners in this regard either.

   Shri  Venugopal,  learned senior counsel  appearing  for some  of  the Petitioners, contended that there has been  no consultation  by the Government of Karnataka in an effective manner before the issue of the notification.  He referred to certain  details  of  the  different meetings  held  by  the Advisory  Board.   The fact is that the decision to  abolish the  contract labour in the canteen establishments was taken by  the  Advisory Board as earlier as 1988 but the same  was not given effect to and the matter was further discussed and information   was   gathered     from   different   sources. Ultimately,  the  Advisory  Board  sent its  advice  to  the Government  suggesting the abolition of the contract labour. When  the  matter went back to the Government, the  factors, such  as,  the report of the Advisory Board and the  various conditions  of  the  work and the benefits of  the  contract labour in the establishment, need for such activity, whether it  is  a perennial in nature or otherwise and whether  such activity  is done ordinarily through regular workmen in that establishment or an establishment similar thereto or whether it is sufficient to employ considerable number of whole-time workmen,  were  all  taken  note of  in  a  detailed  noting prepared  by  the Government before reaching that  decision. These  files have been perused by the High Court based  upon which  the High Court upheld the notifications in  question. We  have also been taken through these files and we can  say that   the  High  Court  is   justified  in  reaching   that conclusion.   What is required to be done by the  Government in  this regard is to consult the Board and it does not mean that  the  Government  is bound by the advice given  by  the Advisory Board.  All that is required is that the Government should consult the Advisory Board which has been done in the present  case  which  consisted   of  representations   from different  sections  such  as the Government  nominees,  the management,  the  employees  and  the  contractor  who  have establishments   apart    from    effectively   ascertaining information  from  various  sources, these  members  in  the Advisory Board itself had sufficient experience in different fields who also could form an opinion in regard to the same.

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Based  upon such report and all the factors available in the State  as  per  the  information   furnished  to  them  from different sources, the Government had reached the conclusion it  did.   Further,  learned counsel referred  to  different proceedings  of the Advisory Board to contend that they  are inconclusive  and cannot give due advice to the  Government. We  may  notice  that  apart  from  the  deliberations,  the Advisory  Board  has  collected   material  from   different districts  and  information from the Department  of  Labour. That  material  was also taken note of by the Government  in reaching  its  conclusion and hence even assuming  that  the Advisory  Boards  proceedings  were inconclusive  will  not materially affect the decision of the Government.

   It was next contended that conditions in each one of the factories  had  to be ascertained and separate  notification had  to  be issued in respect of each one of the  factories. This  argument  needs to be rejected out right because  when the  Government  was formulating the policy it has  to  take note   of  the  conditions   prevalent  generally  in   such establishments  and not with reference to any one or  other. In  general, if it is found that it would be appropriate  to abolish  contract  labour  in  canteens  run  by  factories, individual  distinctive  features  do   not  affect  such  a decision.

   It  is  next  contended that only  one  notification  is issued  and not with reference to each of the  establishment separately  and, therefore, the action of the Government  is vitiated.    When   the  notification   is   applicable   to establishments  falling  in a particular category, the  fact that  separate  notification  is not issued  will  not  make impact  on  the action of the Government in the issue  of  a notification,   if  otherwise  it  is  valid.   Hence   this contention also has no merit.

   After  we reserved the matter for orders, it is  brought to  our notice that the Government of Karnataka has issued a notification  on  15th November, 2000 in No.LD 46  LWA  2000 rescinding  notification  No.KAE 5 LWA 97 dated 11th  April, 1997 prohibiting under Section 10 of the Act contract labour in  certain  processes  of   steel  re-rolling  mills.   The consideration  for issue or cancellation of notifications in regard  to  steel  re-rolling mills have no bearing  on  the issue  on  hand as in the present case prohibition  is  only with  respect  to  contract labour  in  canteens  maintained pursuant  to  Section  46  of  the  Factories  Act  and  the principles  applicable  in  regard  to the  two  issues  are entirely different.

   Therefore,  we  do not find any merit in  any  arguments advanced  on behalf of the Petitioners.  Thus the  petitions are  liable  to be and are dismissed.  The challenge to  the notification fails.  No costs.

S.L.P. (Civil) No. 8315/1998

   The  Petitioner in this case claims that the  Petitioner is a sick industry and, therefore, requires a different kind of  treatment  at the hands of the Government and  that  the Government  had  not taken note of the fact whether the  Act should be made applicable in respect of industries which are

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sick  or not.  During the pendency of these proceedings, the Board  for Industrial & Financial Reconstruction has made an order  providing for a scheme for revival and reconstruction of  the  Petitioner  and, therefore, it is not  feasible  to provide  for  abolition  of  contract   labour  in  such  an establishment  and abolition of contract labour will not  be more  beneficial  to the workmen concerned.  This  stand  is strongly  refuted  by  the respondents.  The fact  that  the industry   is  sick  and  it   has  been  subjected  to  the proceedings  before the BIFR is undoubtedly correct but  the view  of the BIFR is that the networth of the company  would become  positive  by the year 1999-2000 and the  accumulated losses  would be wiped out by the year 2000-2001.  If  those are  the  circumstances it will be too hazardous for  us  to embark  upon  a consideration as to whether  the  Government should  have  separately  considered in respect of  such  an industry  also to abolish contract labour or not.  When as a matter  of policy the Government adopted that in respect  of industry  where there is at least 250 workmen and a  canteen had  been  provided  in terms of the Factories Act  and  the rules  framed thereunder to abolish contract labour pursuant to  which the action has now been taken, we do not think the Petitioner  can stand on a different footing merely  because it  has become sick.  In that view of the matter, we find no substance in the separate contentions addressed on behalf of the Petitioner in this petition.

   This petition also stands dismissed.  No costs.