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PETITIONER: M.M.R. KHAN AND ORS. ETC.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS. ETC.

DATE OF JUDGMENT27/02/1990

BENCH: SAWANT, P.B. BENCH: SAWANT, P.B. MISRA RANGNATH RAMASWAMY, K.

CITATION:  1990 AIR  937            1990 SCR  (1) 687  1990 SCC  Supl.  191     JT 1990 (3)     1  1990 SCALE  (1)324

ACT:     Railway  Establishment Manual: Para 283 I--Employees  of Railways established statutory and non statutory  recognised canteens-Whether railway servants.

HEADNOTE:     The  petitioners  in this group of  Writ  Petitions  are workers in canteens run in different railway establishments. The relief claimed in all the petitions is that the  workers concerned should be treated as railway employees and  should be  extended all service conditions which are  available  to the railway employees.     For convenience sake, the canteens have been  classified into  three categories, viz., (i) Statutory  canteens;  (ii) Non-statutory  Recognised Canteens, and (iii)  Non-Statutory Non-Recognised canteens.     Chapter  XXVIII  of  the  Railway  Establishment  Manual contains  the  necessary instructions for running  the  can- teens. Paragraph 2829 of Chapter XXVIII of the Manual refers to  the provisions of Section 46 of the Factories Act,  1948 and under-writes the fact that under these provisions, there is  a statutory obligation on the Railway Administration  to set up canteens in Railway establishments which are governed by  the  said Act and which employ more  than  250  persons. Paragraph  2831 lays down the principles governing the  set- ting up of the canteens which apply also to the non-statuto- ry  canteens  provided for under paragraph  2830.  Paragraph 2832 inter alia states that although the Administration  can employ as agent a Staff Committee or a Co-operative  Society for management, the legal responsibility for proper  manage- ment  rests not with the agency but solely with the  Railway Administration.     The  Department  of Personnel &  Training,  Ministry  of Personnel,  Government of India, had  issued  Administrative Instructions on Departmental Canteens in Offices and  Indus- trial Establishments of the Government. It is made clear  in these  instructions  that the orders issued under  the  said Instructions  are  applicable to all  Canteens/Tiffin  Rooms functioning  or  to be set up in any  Ministry,  Department, Establish-

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688 ment,  Office,  or Installation of the government  of  India (Industrial or non-industrial), including those  functioning under  the Ministries of Defence, P & T and Railways  unless these three Ministries had previously decided to exempt  any of the said Instructions due to specific reasons.     It  was  contended on behalf of  the  petitioner-workers that, in view of the documents on record there is no  reason why  the employees in the canteens concerned should  not  be given  the status of the railway employees with  all  conse- quential benefits.     On  the  other hand, it was contended on behalf  of  the Railways that (i) the canteen employees are appointed by the Staff Managing Committees or Co-operative Societies and  not by the Railway Administration and as such there is no  rela- tionship of master and servant between the Railwasy Adminis- tration  and the Canteen employees, and in no case can  they be deemed as holders of civil posts, either for Article  309 or  for  Article 311 of the Constitution; (ii)  the  control exercised  by the Railway administration is only  to  ensure that  the  canteens are run in conformity with  certain  re- quirements;  (iii) the Railways have a primary objective  of carrying goods and passengers and the welfare activities are ancillary to the main objective; (iv) the canteens  continue at the discretion of the Railway Administration, and at  any stage  the  Government can change the form of  this  welfare measure and choose to have another set-up; (v) the  Railways undertake varied welfare activities, and if it is decided to treat  the  employees  engaged in the  canteens  as  railway employees,  it  will be difficult to resist the  claim  from employees of these other institutions for a similar  status; and  (vi)  the  Railway Establishment  Manual  contains  the necessary  instructions for running the canteens, and  hence the  Railway  Administration should be deemed to  have  been exempted  from the operation of the Administrative  Instruc- tions  on  Departmental Canteens in Offices  and  Industrial Establishments  of the Government, issued by the  Department of Personnel & Training.     Allowing  the  petitions filed by the employees  of  the statutory canteens and non-statutory (recognised)  canteens. and  dismissing those of the non-statutory  (non-recognised) canteens. this Court. HELD: Statutory Canteens     (1) In terms of the Rules made by the State  Governments under Section 46 of the Factories Act, 1948 it is obligatory on  the  Railway Administration to provide a canteen  in  an establishment which employs 689 more  than  250  persons. The provision of  the  canteen  is therefore, deemed by the statute as a necessary  concomitant of the manufacturing activity. [692C; G]       The  employees  of  the  departmental  canteens/tiffin rooms  were  declared as holders of civil  posts  under  the Government  of  India Notification dated December  11,  1979 which  is  annexed  to the  Administrative  Instructions  on Departmental  Canteens in Offices and Industrial  Establish- ments  of the Government. That Notification states that  all posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and hence the  incumbents  would qualify as holders  of  civil  posts. Accordingly, service rules were framed under Article 309  as per  the  notification issued by the  Government  of  India, Department  of  Personnel & Training on December  23,  1980. [705H; 706A-B]     (3)  The  provisions  contained  in  the  Administrative

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Instructions,  show that the Government has a complete  con- trol over the canteens and the workers employed therein ’are holders of civil posts within the meaning of Article 311  of the  Constitution. There recruitment and service  conditions are governed by the rules applicable to the employees of the Department/Office/Establishment  to which the  canteens  are attached. [701E]     (4)  Although  there is nothing expressly on  record  to show  that the railway canteens are exempted from  the  said Administrative  Instructions,  but even  assuming  that  the railway  canteens  are exempted by virtue  of  the  relevant provisions  of  the Railway Manual, the  fact  remains  that there  are as yet no notifications on the lines of  December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens. [706E-F]     (5) It cannot be argued that there is any difference  in the  work performed by the employees in the canteens run  in the establishments of the Ministries. If the said two  noti- fications  are applicable to the employees in  the  canteens run  by  the other departments of the Government  of  India, there is no reason why the same should not apply also to the employees  in the canteens run by the Railways. In the  cir- cumstances,  it would be highly discriminatory not to  apply the  said two notifications to the employees in the  Railway canteens. It would be violative of Articles 14 and 16 of the Constitution. The employees in the Statutory canteens of the Railways will therefore have to be treated as Railway  serv- ants. [706F-H; 707A] 690     (6)  Thus  the  relationship of  employer  and  employee stands  created between the Railway Administration  and  the canteen employees from the very inception. Hence, it  cannot be  gainsaid that for the purposes of the Factories Act  the employees in the statutory canteens are the employees of the Railways. [707B]     Order  dated 22.10.1980 in Civil Appeal No. 368 of  1978 (Supreme  Court); Madras High Court; Writ Appeals Nos.  414- 415 of 1978. referred to.     (7)  If by virtue of all these facts the  employees  are entitled  to the status of Railway employees they cannot  be deprived of that status merely because some other  employees similarly or dis-similarly situated may also claim the  same status. The argument to say the least can only be  described as  one in terroram. and as any other argument of  the  kind has to be disregarded. [708E] Non-Statutory Recognised Canteen     (8)  These canteens are run in the establishments  which employ 250 or less than 2.50 employees; and are  established with  the  prior  approval and recognition  of  the  Railway Board. There is hardly any difference between the  statutory canteens  and  non-statutory recognised canteens.  The  only material  difference is that while one is  obligatory  under the  Factories Act, the other is not. However. there  is  no difference  in the management of the two type  of  canteens. [71 I G; 712C]     (9)  The  Administration  Instructions  on  Departmental Canteens  in  Government Offices and  Government  Industrial Establishments do not make any difference between the two so far as their applicability is concerned. Hence, it cannot be seen  why any distinction be made between the  employees  of the two types of canteens so far as their service conditions are  concerned. For this very reason, the two  notifications of  December 11, 1979 and December, 23, 1980 should also  be equally  applicable to the employees of these  canteens.  [7 12G-H]

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   (10)  If that is so, then these employees would also  be entitled to be treated as railway servants. A classification made  between  the employees of the two  types  of  canteens would  be unreasonable and will have no rational nexus  with the  purpose  of  the classification. Surely  it  cannot  be argued that the employees who otherwise do the same work and work  under the same conditions and under a similar  manage- ment  have  to  be treated differently  merely  because  the canteen happens to be 691 run at an establishment which employees 250 or less than 250 members of the staff. [712H; 713A-B] Non-Statutory Non-Recognised Canteens     (11)  These  canteens are run  at  establishments  which employ  100 or less than 100 employees, and are  established without prior approval or recognition of the Railway  Board. [692E]     The  Canteens are run more or less on ad hoc basis,  the Railway Administration having no control of their  function- ing.  They are not required to be managed either as per  the provisions of the Railway Establishment Manual or the Admin- istrative  Instructions.  In the circumstances  the  workers engaged  in  these canteens are not entitled  to  claim  the status of the railway servants. [713H; 714A]

JUDGMENT: ORIGINAL JURISDICTION: Writ Petitions (C) Nos. 2275-86 of 1982 Etc. (Under Article 32 of the Constitution of India) WITH Special Leave Petition (C) No. 4090 of 1985.     From  the  Judgment and Order dated 4.12.  1984  of  the Madras High Court in W.A. No. 414/78.     B.  Datta, Additional Solicitor General,  G.  Ramaswamy, Additional  Solicitor  General, M.K. Ramamurthy,  V.M.  Tar- kunde, Gobind Mukhoty, S.C. Manchanda, G.B. Pai, K.K. Venug- opal,  Mrs. Shyamala Pappu, M.A. Krishnamurthy, Ms.  Chandan Ramamurthy, J.D. Jain, MS. Kanwaljit Kochhar, K.B.  Rohtagi, B.R. Agarwala, Ms. Sushma Manchanda, R.B. Hathikhanwala, Ms. Sunita  Sharma,  P.H. Parekh, S.S. Khanduja,  Y.P.  Dhingra, B.K.  Saluja, H.S. Parihar, Vipin Chandra, R.K.  Maheshwari, Pramod  Dayal, R.P. Saxena, D.K. Garg, A.D.  Sanger,  Pramod Swarup, Krishna Prasad, P.C. Kapur, A.N. Badriyar, M.P. Jha, V.N. Sharma Petitioner-inperson, B.B. Sahoo, S.  Srinivasan, Vineet  Kumar,  Ms. Urmila Kapoor, Ms.  S.  Janani,  Dalveer Bhandari,  C. Ramesh, G.D. Gupta, L.K. Gupta,  G.  Venkatesh Rao, Ms. A. Subhashini, Ms. Sushma Suri, C.V. Subba Rao,  P. Parmeshwaran, J.R. Das, S.K. Patri, Ms. Lira 692 Goswami,  D.N. Mishra, V.J. Francis, N.M. PopIi, S.K.  Dhin- gra,  K.J. John, Y.P. Rao, Mahabir Singh, Ms. Bharti  Anand, Indra Makwana and S.K. Jain for the appearing parties. The Judgment of the Court was delivered by     SAWANT, J. This group of petitions concerns the  workers in canteens run in the different railway establishments. The relief  claimed  in all the petitions is  that  the  workers concerned should be treated as railway employees and  should be  extended all service conditions which are  available  to the railway employees.     2. For our purpose, these canteens have to be classified into  three categories, viz. (i)  Statutory  Canteens--These are canteens required to be provided compulsorily in view of the  provisions  of Section 46 of the  Factories  Act,  1948

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(hereinafter referred to as the Act) since the Act admitted- ly applies to the establishments concerned and the employees working  in  the said establishments exceed 250;  (ii)  Non- Statutory Recognised Canteens--These canteens are run in the establishments  which may or may not be governed by the  Act but which admittedly employ 250 or less than 250  employees, and hence, it is not obligatory on the railways to  maintain them.  However,  they have been set up  as  a  staff-welfare measure  where  the employees exceed 100  in  number.  These canteens are established with the prior approval and  recog- nition of the Railway Board as per the procedure detailed in the  Railway Establishment Manual; and  (iii)  Non-Statutory Non-Recognised  Canteens--These canteens are run  at  estab- lishments in category (ii) above but employ 100 or less than 100 employees, and are established without the prior approv- al or recognition of the Railway Board     3.  The present petitions concern employees in  all  the three  types  of  canteens. It will be  convenient  to  deal separately  with  the employees in the three types  of  can- teens, because, the history of litigation and the  arguments advanced in respect of each of the categories are different.     4.(i)  Statutory Canteens: Section 46 of the  Act  which makes  it obligatory on an occupier of a factory as  defined under  the Act, to provide a canteen or canteens where  more than 250 workers are ordinarily employed runs as follows: "Canteens: (1) The State Government may make rules 693 requiring  that in any specified factory wherein  more  than two  hundred  and fifty workers are ordinarily  employed,  a canteen or canteens shall be provided and maintained by  the occupier for the use of the workers. (2)  Without  prejudice to the generality of  the  foregoing power, such rules may provide for-- (a) the date by which such canteen shall be provided; (b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen; (c)  the  foodstuffs to be served therein  and  the  charges which may be made therefore; (d) the constitution of a managing committee for the canteen and  representation of the workers in the management of  the canteen; (dd) the items of expenditure in the running of the  canteen which are not to be taken into account in fixing the cost of foodstuff and which shall be borne by the employer; (e)  the delegation to the Chief Inspector, subject to  such conditions as may be prescribed, of the power to make  rules under clause (c)." It is evident from the aforesaid provision that the occupier of  a factory (a railway establishment for the  purposes  of the  said provisions is a factory within the meaning of  the Act)  is not only obliged to run a canteen where  more  than 250 workers are employed but is also obliged to abide by the rules which the concerned Government may make, including the rules  for constitution of a managing committee for  running the  canteen  and for representation of the workers  in  the management of the canteen. The occupier may also be required to bear a part of the expenses of running the canteen and to comply  with the rules prescribing standards in  respect  of construction,  accommodation, furniture and other  equipment of the canteen the foodstuffs to be served and the prices to be charged for them. In other words, the whole paraphernalia of the canteen has to conform to the statutory rules made in that behalf. As is pointed out on behalf of the Railways, it appears that there are 89 such statutory canteens  function- ing in the railway premises.

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694     5. It appears that the workers working in the  statutory canteen  at Loco-Carriages and Electrical Workshops  of  the South  Eastern Railways Workshop, Kharagpur had preferred  a writ  petition  in  the Calcutta High Court  praying  for  a direction to the Union of India to recognise them as railway employees and grant them a11 service conditions available to the  railway employees. A learned Single Judge by his  deci- sion  dated  7.8. 1973 dismissed the said  petition  holding that the workers were not entitled to the reliefs claimed by them.  Against the said decision, the workers  preferred  an appeal  before the Division Bench of the said Court and  the Division Bench by its decision of July 16, 1974, allowed the same and directed the respondent Union of India to recognise the workers as employees of the Railway Administration under the Factories Act, but rejected the demand to pay salary and allowances to them as if they were railway employees. On the other  hand, the High Court held that the employment of  the workers  must  be deemed to be on the basis  of  appointment letters  and that they had no statutory or legal  right  and the Railway Administration had no corresponding statutory or legal  obligation  to pay salaries etc.  above  the  minimum wages, or dearness allowances as claimed by them. The  court held  that  their service conditions were in  the  realm  of contract  or depending on a policy followed by  the  Railway Administration,  at  its discretion.  Being  aggrieved,  the Union of India had come in appeal to this Court being  Civil Appeal  No. 368 of 1978.This Court by its order  of  October 22, 1980 disposed of the appeal as follows: "The benefits accruing to the workers under the decision  of the Calcutta High Court do not require to be interfered with in  this appeal. Prima facie we are inclined to  agree  that the  High  Court decision is right.  Moreover,  the  learned Attorney  General  agrees  to apply the Act as  if  it  were applicable  to  canteen  employees. In this  view,  a  final pronouncement  on  this question by this Court need  not  be given  in  the present case. We leave it open  to  Union  of India  in an appropriate case to raise the point and seek  a pronouncement."     The  Act  referred to in the aforesaid  order  obviously means  the Factories Act. Therefore, what was  confirmed  by this  Court was the declaration given by the  Calcutta  High Court  that  the employees of the  Statutory  Canteens  were railway.employees for the purposes of the Factories Act  and that  their service conditions were determined by  the  con- tract as incorporated in their appointment letters or by the policy  decision  of the Railway  Administration  which  was discretionary. It is 695 necessary to note this fact at the very outset.     It  has further to be remembered that the Calcutta  High Court  had given the aforesaid declaration in favour of  the statutory canteen workers notwithstanding the fact that  the canteens  were managed by the Committee of Management  nomi- nated by the Railway Administration or by a managing commit- tee elected or nominated by the employees or by the Corpera- tive  Society relying on the express provision contained  in Chapter  XXVIII‘  Of ’the Railway Establishment  Manual.  It may,  however,  be mentioned that the High Court  had  taken into  consideration  Note 2 of Para 2834(2)  of  the  Manual which  had  declared that in cases where the  canteens  were being  run on cooperative basis either by the  Co--operative Society or the managing committee of the staff, the  canteen staff  shall not be treated as railway servants  because  in that  case master and servant relationship  existed  between

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the  Co-operative Society (through its  managing  committee) and the concerned employees. The High Court had relied  upon the  fact  that even in such cases the entire  cost  of  the staff  was reimbursed by the Railway Administration  to  the Co-operative  Society managing committee and  that  over-all control over the canteen and the staff, vested in the  Rail- way  Administration. In fact, the direction under para  2832 of  the Railway Establishment Manual was that where  even  a Co-operative  Society was running the canteen, the  bye-laws of  the  Society should be suitably amended to  provide  for such overall control by the Railway Administration since the legal  responsibility for the proper management of the  can- teen vested not with the agent like the Co-operative Soceity but solely with the Railway Administration.     6.  1t is undoubtedly true, however, that this Court  in its  Order dated October 22, 1980 had reserved the right  to the  Union of India to raise the question as to whether  the employees  of the Statutory canteens were the  employees  of the Railway Establishment, finder the Factories Act and  get a pronouncement on the same. It appears that after the  said order  of this Court, the Railway Board had issued a  letter dated  May  22, 1981 to the General Manager,  South  Eastern Railway, Calcutta Conveying the decision of the Ministry  of the Railways that the employees of Kharagpur Workshop Statu- tory  Canteen,  (which employees were a party  to  the  said decision)  should  be  deemed to be  railway  servants  with effect  from  October 22, 1980 and till  Government  decided otherwise, the said workers would continue to be governed by the  conditions  of  service and emoluments  as  existed  on October  21,  1980. It was also stated there that  what  was stated  in the letter had the sanction of the President  and the letter was issued/with 696 the  concurrence of the Finance Directorate of the  Ministry of Railways. Subsequently, the Board issued another circular letter of June 8, 1981 addressed to the General Managers  of all Indian Railways stating therein that it was decided that employees  of all other statutory canteens on  the  railways irrespective  of  the type and management  of  the  canteens should also be deemed to be railway servants w.e.f.  October 22,  1980  and that till Government decided  otherwise,  the staff  of the statutory canteens would continue to  be  gov- erned by the conditions of service and emoluments as existed on October 21, 1980.     7. On March 11, 1982, the Railway Board issued a  letter and  referred to its earlier communication of June  8,  1981 and September 18, 1981. In this, letter, it was stated  that pursuant  to the said two earlier communications  (where  it was  stated  that the question of pay scale  and  retirement benefits were under consideration and that a separate commu- nication would follow), a Schedule showing revised pay scale applicable to the employees of the statutory canteens of the railways  was  enclosed  for necessary  action.  The  letter stated  that the existing employees of these canteens  would be entitled to exercise an option under Rule 2019 (F.R.  23) and  Rule  II either to retain their existing pay  scale  as presently  applicable  to them or opt for  the  revised  pay scale. However, on promotion such employees would be compul- sorily  brought  on to the revised pay scales. It  was  made clear that those who opt for the revised scales would not be eligible to other facilities/perquisites admissible to  them in  their  existing  pay scale such as  free  food,  snacks, commission  etc.  A  period of three months  was  given  for exercising  the option and it was stated that if  no  option was  exercised it would be assumed that the  employees  con-

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cerned had elected to be governed by the revised pay  scales w.e.f. October 22, 1980. The Schedule annexed to the  letter mentioned,  among other things, that the  canteen  employees will  be  entitled  to the dearness  allowance,  house  rent allowance  and  city compensatory allowance as per  the  in- structions  issued by the Railway Ministry; that the age  of retirement of employees would be 58 years as in the case  of other  railway  employees;  and that the  employees  of  the canteen  would  be entitled to the benefit  of  productivity linked  bonus on the principles applicable to the  stall  of the  office/establishment to which they were  attached  from the date of their being declared as railway servants.     8. In a decision of this Court reported in 1988 (4)  SCC 478, this Court directed that for the purpose of calculating pensionary  benefits, the service rendered by the  said  em- ployees  prior to October 22, 1980 should also be  computed. By its letterr dated May 13, 1983 addressed to 697 all the General Managers, the Ministry of Railways placed on record  the  fact that pursuant to the Order of  this  Court dated  October 22, 1980 the employees of all  the  statutory and 11 Delhi based nonstatutory canteens had been treated as railway  servants w.e.f. October 22, 1980, and  the  revised pay scale applicable to the employees had been  communicated vide the Railway Board’s letter dated March 11, 1982.     9.  On December 4, 1984, a Division Bench of the  Madras High  Court delivered a Judgment in Writ Appeal No.  414  of 1978, Railway Board & Anr. v. Parthasarthy and Anr., and  in Writ  Appeal  No. 415 of 1978 relying upon the  order  dated October  22, 1980, passed by this Court and held  that  can- teen-employees will have to be treated as railway  employees for  the purposes of the Factories Act, in view of th,  con- cession made by the Railways before this Court and also  the con  cession made by the counsel appearing for the  Railways before the High Court.     10.  We have then on record an Office Order  dated  July 27,  1983 issued to an employee of a statutory canteen  con- veying to him appointment as a TY/Cleaner in a scale of  pay plus  usual  allowances  w.e.f. January 12,  1983.  In  this order, it is stated that the employee would be eligible  for house  rent allowance under the Rules in force from time  to time, that he will be on probation for a period of one  year and  that the appointment would be terminated with 14  days’ notice  on either side. It is, however, added that  no  such notice would be required, for the termination of service  as and by way of removal or dismissal as a disciplinary measure effected after compliance with the provisions of clause  (2) of  Article  311 of the Constitution of India.  It  is  also stated  that the employee should take oath of allegiance  to the Union of India and that he should apply for allotment of quarters within 7 days from the date of his appointment  and then alone should apply for house rent allowance.     11. It is now necessary to refer to the relevant  provi- sions  of the Railway Establishment Manual which  deal  with the canteens. Paragraph 2829 of Chapter XXVIII of the Manual refers to the provisions of Section 46 of the Factories  Act 1948  and underwrites the fact that under these  provisions, there  is a statutory obligation on the Railway  Administra- tion to set up canteens in Railway establishments which  are governed  by  the said Act and which employ  more  than  250 persons. The paragraph further mentions that Railway  Admin- istration  should  strictly  abide by the  rules  which  are framed by the respective State 698 Governments  under  sub-section 2 of the Act  regarding  the

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constitution  of the Managing Committees of  such  canteens. Paragraph  2832  then ordains that the staff served  by  the said canteens should be actively associated in their manage- ment, and for this purpose a Committee of management of  the staff  should be formed in accordance with the rules  framed by  the  concerned State Government. The  paragraph  further states that although the Administration can employ as  agent a Staff Committee or a Co-operative Society for  management, the  legal  responsibility for proper management  rests  not with the agency but solely with the Railway  Administration. In case the management is entrusted to a consumer  co-opera- tive society the bye-laws of the society are directed by the said  paragraph  to be amended suitably to  provide  for  an overall  control  by the Railway  Administration.  Paragraph 2834  deals with the incidence of cost of the  canteens.  As regards  the statutory canteens, the paragraph directs  that in  addition to the facilities which are given to  the  non- statutory  canteens,  the Administration will have  also  to bear  the expenditure on the entire paraphernalia  including the  furniture as well as the salaries of the cook  and  the canteen staff. Note 2 of the said paragraph then states that where  the  canteens  are being run  on  co-operative  basis either  by co-operative society or by Managing Committee  of the  staff and there subsists a relationship of  master  and servants  between  the society/ managing committee  and  the workers,  i.e. where the canteen staff has been employed  by the society/managing committee and not by the Administration as such, the canteen-staff are not to be treated as  railway servant even though the cost of this staff is reimbursed  by the Administration.     12. We have also on record the second edition (1988)  of "ADMINISTRATIVE  INSTRUCTIONS  ON DEPARTMENTAL  CANTEENS  IN OFFICES  AND  INDUSTRIAL ESTABLISHMENTS OF  THE  GOVERNMENT" issued  by the the Deptt. of Personnel & Training,  Ministry of  Personnel, Public Grievances & Pensions of the Govt.  of India,  first published in 1980 (hereinafter briefly  called as the Instructions). They are applicable to: (a)  Canteens/Tiffin Rooms set up on departmental basis  and run  as  per scheme issued by the Deptt.  of  Personnel  and Training; (b) Canteens/Tiffin Rooms set up on Co-operative basis by  a Society of Government employees with the Head of the Deptt./ Office/Establishment or his nominee as Chairman; and (c)  Canteens/Tiffin Rooms set up in  Industrial  Establish- ments 699 (other than those covered under Section 46 of the  Factories Act) of the Government and which have not been exempted from following  the  rules in the said Instructions  due  to  the availability  of  a separate and distinct set of  rules  and guidelines framed by the controlling Ministries/Departments. (para 1.3) It  is  made  clear in these Instructions  that  the  orders issued  under  the said Instructions are applicable  to  all Canteens/Tiffin  Rooms  functioning or to be set up  in  any Ministry, Department, Establishment, Office, Installation of the Government of India (industrial or nonindustrial)  which should be centrally registered with the office of the Direc- tor  of Canteens, Deptt. of Personnel & Training, New  Delhi including those functioning under the Ministries of Defence, P & T and Railways, unless these three Ministries had previ- ously  decided to exempt any of their Canteens/Tiffin  Rooms from  the purview of the said Instructions due  to  specific reasons,  and  they had framed or they propose  to  frame  a separate  set  of instructions for  the  exempted  canteens.

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(para  1.4). The Instructions further state that the  policy matters and coordination on canteen matters will be central- ly done by the Deptt. of Personnel and Training (Director of Canteens)  (para  1.14). To be entitled to subsidy  all  the departmental  canteens  have to  get  themselves  registered centrally  with the Director of Canteens and Training  (Para 1.15).  The  canteens are entitled to subsidy on  wages  and gratuity payable to the workers employed in the canteens and for  their  uniforms as well as to capital  and  replacement grants  for equipment including utensils, crockeries,  cutt- lery  and  furniture  and also to  interest-free  loans.  In addition  to  subsidy for equipment, the canteens  are  also entitled to other facilities such as accommodation on  nomi- nal  rent of Rs. 1 electricity, water etc. The  Instructions in terms state that since the canteens are run departmental- ly as a measure of staff welfare, the beverages, snacks  and meals etc. have to be made available to the staff at econom- ic rates and for this purpose the Government has to  provide necessary accommodation at the nominal rent and provide  the necessary  grants, subsidy and loans. (Para 1.2). In,  addi- tion, the concerned Department/Office has to bear the  elec- tricity  and water bills. In chapter V which deals with  the personnel  in  the canteens, the Instructions lay  down  the entitlement  of  Canteens/Tiffin  Rooms to  the  number  and categories   of  employees  according  to  the   grades   of Canteens/Tiffin Rooms. With regard to the recruitment rules, conditions  of service, status and the scales of pay of  the canteen  workers,  the  procedure  for  taking  disciplinary action against them as well as for giving training to  them, the  chapter makes it clear that since the  canteen  workers have acquired the status of the holders of civil posts 700 w.e.f. October 1, 1979, their recruitment and conditions  of service  etc.  would be governed by the rules  framed  under proviso to Article 309 of the Constitution contained in  GSR 54 issued under Government of India, Department of Personnel and  Training Notification dated 23rd December, 1980. It  is made  clear that the said rules also apply to the  employees of  the Canteens run by the Co-operative Societies  in  con- junction  with  the bye-laws of the Society  and  local  co- operative  laws in force. It is further made clear that  the workers  in the non-statutory departmental and  co-operative Canteens/Tiffin Rooms will be paid the pay and allowances at the same rate and on the same basis w.e.f. 26.9. 83 on which the employees of the statutory canteens are paid the same.     The chapter also mentions that before taking any  disci- plinary  action against any canteen worker procedure as  set out  in chapter IV (Conduct and Discipline) of GSR  of  1954 dated 23rd December, 1980 published in the Gazette of  India Part II Section 3, sub-Section (1) dated 17th January,  1981 will  be  followed. The chapter further  directs  periodical training  programmes to be arranged by the Director of  Can- teens for managerial, personnel and other canteen staff.     113. Chapter VI contains guidelines for constituting the Managing  Committees of the canteens. This  chapter  ordains that the Chairman of the managing committee should  prefera- bly  be  the Head of the Department/Office  himself  or  his Deputy,  and  that the Honorary Secretary  of  the  managing committee  should  normally be the Welfare  Officer  or  the Administrative  Officer  of the Department/  Office  of  the minimum  rank of a Section Officer or a Major or  equivalent in services, who shall be nominated by the Office/Establish- ment, and in the case of Co-operative Canteens may be elect- ed as per the bye-laws of the Society. One of the  officials who should be of the rank of Section Officer/Major or  above

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is  to be nominated on the managing Committee by the  Chair- man. Paragraph 6.11 defines the Legal Status of the Managing Committee.  It  says  that the Committee  functions  in  the Deptt./Office/establishment  of the Government of India  for the welfare of the Govt. employees, under the orders of  the Government of India and its functions are connected with the affairs  of  the Union. The Committee,  therefore  does  not enjoy an autonomous status. With respect to the  contractual obligations,  it  functions "for and on behalf  of  the  the President  of India". The proceedings of the Committee  will not be conducted or decided on resolutions or voting system, but the official decision will rest with the Chairman of the Managing Commitsee or the Head of the Department/Office.  In the case of canteens run by the co-operative societies, this provision is to apply as per the 701 bye-laws  of the society and the co-operative law in  force. The  presence  of the Chairman and the  Hony.  Secretary  is necessary  to constitute the quorum for holding the  meeting of the Managing Committee. The Head of the Department/Office is given power to depute a Government servant of the rank of Section Officer/equivalent or below if he can be spared, for part  time or whole time assistance to the Managing  Commit- tee. The Department/Office concerned is required to  provide stationery,   stencils,  cyclostyling  facilities,   postage stamps,  office assistance etc. to enable the Managing  Com- mittee to conduct its business.     14.  The  annual  accounts of the Canteens  have  to  be submitted to the Financial Advisers of the Department/Office concerned  with copies thereof to the Director of  the  can- teens, and the audit of the accounts of the  Canteens/Tiffin Rooms is to be carried out by the Departmentalised  Accounts Organisations  of the  concerned  Ministries/Departments/Of- fices.  Out of the surplus of net profits of  the  Canteens, 1/3  amount  is required to be remitted to the  Director  of Canteens  Funds  for  welfare of the  canteen  employees  in general.     15.  All the aforesaid provisions apply to all types  of Tiffin Rooms classified into Type B and A where the strength of the Department/Office is between 25-49 and 50-99  respec- tively and to the Canteens classified in Types D, C, B and A where the strength is between 100-249, 250-499, 500-699  and 700-1200  respectively. Where the strength is above  1200  a further higher classification is given to the Canteens.     16.  These  provisions contained  in  the  Instructions, therefore,  show that the Government has a complete  control over  the  canteens  and the workers  employed  therein  are holders of civil posts within the meaning of Article 311  of the  Constitution. Their recruitment and service  conditions are governed by the rules applicable to the employees of the Government Deptt./Office/Establishment to which the canteens are attached.     17.  It is against this background that we have to  con- sider  the question as to whether the staff employed in  the statutory canteens m’ the Railway Establishment,  industrial or  non-industrial, are railway employees or not.  According to the workers, in view of the aforesaid documents on record there  is no reason why the employees in the  canteens  con- cerned should not be given the status of the railway employ- ees with all consequential benefits. On the other hand, the 702 contention  advanced on behalf of the Railways is  that  the documents in question show that the employees of the  statu- tory  canteens are to be deemed railway employees  only  for the  purpose of the Factories Act and for no other  purpose.

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In  no  case, they can be deemed as holders of  civil  posts either  for Article 309 or for Article 311 or for any  other purpose.     18. On behalf of the employees, a preliminary  objection was raised, namely, that in view of the order of this  Court dated  October 22, 1980 in Civil Appeal No. 368 of 1978  and another,  it  is  not open to the Railways  to  agitate  the question whether the employees in the statutory canteens are railway  employees  or  not, and further  whether  they  are railway employees for the purposes of the Factories Act.  We are not inclined to entertain this objection for it is clear from  the said order that the Court had left open  even  the question  as to whether the employees of the statutory  can- teens  were railway employees for the purposes of  the  said Act.  Hence, the question whether they are employees of  the railways  for all purposes necessarily remains res  integra. We  may reproduce here the said order which is clear  enough on the subject:          "The  benefits  accruing to the workers  under  the decision  of  the Calcutta High Court do not require  to  be interfered with in this appeal. Prima facie we are  inclined to  agree that the High Court decision is  right.  Moreover, the  learned Attorney General agrees to apply the Act as  if it  were  applicable to canteen employees. In  this  view  a final pronouncement on this question by this Court need  not be given in the present case. We leave it open to the  Union of India in an appropriate case to raise the point and  seek a pronouncement.          Leave  granted  in the petition  flied  by  Railway Canteen Karmachari Association.          We have in C.A. No. 368 of 1978 passed an order and the  point  raised  by the workmen in  this  appeal  closely resembles  the one raised in the sister case  just  referred to.  We apply the same principle as has been decided by  the Calcutta  High Court to this case also and the workmen  will be given the same benefits. We, however, make it clear  here also  that the Union of India will be free in an  appopriate case to challenge the correctness of the legal point 703 decided  by the Calcutta High Court. It will be equaly  open to  the workmen to challenge the decision of the Delhi  High Court  if it becomes necessary. With these  observations  we dispose  of  both the appeals. The appellants  in  C.A.  No. 368/1978 will pay the costs of the respondents."     It  must be remembered in this connection that both  the Calcutta and the Madras High Courts had taken the view  that the  employees in the statutory canteens were the  employees of the Railways for the purposes of the said Act. The  Delhi High  Court had distinguished the decision of  the  Calcutta High  Court on the ground that, that decision did not  apply to the employees in the non-statutory canteens with which it was  concerned, and had held that the employees of the  non- statutory  canteens were not railway employees for any  pur- pose.  It is in this circumstance that this Court had  given liberty to the Railway Administration as well as the employ- ees  to challenge the respective decisions of  the  Calcutta and Delhi High Courts. It will not, therefore, be correct to say that this Court had pronounced its final opinion on  the said  issue by the said order. It has also to be  remembered in this connection that the issue before this Court in those matters was whether the employees either of the statutory or non-statutory  canteens were the railway employees  for  the purposes of the Factories Act. The larger issue whether they were  railway  employees for all purposes was  neither  dis- cussed nor even tentatively decided in those proceedings. We

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are, therefore, of the view that both the said issues are at large in the case of the employees of the statutory as  well as of the non-statutory canteens.     19. Before us therefore two issues arise for  considera- tion,  viz. (a) whether the employees of the statutory  can- teens are railway employes for the purposes of the said Act? and  (b)  whether they are railway employees for  all  other purposes as well?     20. As regards the first contention, namely, whether the said employees are the employees of the Railway  Administra- tion  for the purposes of the said Act, according to us  the view  taken  by the Calcutta High Court in  that  behalf  is correct. Section 2(1) of the Factories Act defines  "worker" as follows: "Worker"  means a person employed, directly or  through  any agency  (including a contractor) with or without the  knowl- edge  of the principal employer, whether for remuneration or not in any manufacturing process or in 704 cleaning  any part of the machinery or premises used  for  a manufacturing process, or in any other kind of work inciden- tal to, or connected with, the manufacturing process, or the subject  of the manufacturing process but does  not  include any member of the armed forces of the Union;"     Since  in terms of the Rules made by the  State  Govern- ments  under Section 46 of the Act, it is obligatory on  the Railway  Administration to provide a canteen, and  the  can- teens in question have been established pursuant to the said provision  there is no difficulty in holding that  the  can- teens are incidental to or connected with the  manufacturing process  or  the subject of the manufacturing  process.  The provision  of  the  canteen is deemed by the  statute  as  a necessary  concomitant of the manufacturing activity.  Para- graph  2829 of the Railway Establishment  Manual  recognises the obligation on the Railway Administration created by  the Act  and as pointed out earlier paragraph 2834 makes  provi- sion  for meeting the cost of the canteens.  Paragraph  2832 acknowledges  that although the Railway  Administration  may employ  anyone such as a Staff Committee or  a  Co-operative Society  for the management of the canteens, the  legal  re- sponsibility  for the proper management rests not with  such agency  but solely with the Railway Administration.  If  the management  of  the  canteen is handed over  to  a  consumer cooperative society the bye-laws of such society have to  be amended  suitably to provide for an overall control  by  the Railway Administration.     21. In fact as has been pointed out earlier the Adminis- trative Instructions on departmental canteens in terms state that even those canteens which are not governed by the  said Act  have to be under a complete administrative  control  of the concerned Department and the recruitment, service condi- tions  and the disciplinary proceedings to be taken  against the  employees have to be taken according to the rules  made in that behalf by the said Department. In the circumstances, even where the employees are appointed by the Staff  Commit- tee/ Cooperative Society it will have to be held that  their appointment is made by the Department through the agency  of the  Committee/ Society as the case may be. In addition,  as stated earlier, the Railway Board by its circular dated June 8,  1981 had communicated that it was decided to  treat  the employees  of  all statutory canteens, as  railway  servants irrespective of the type and management of the canteens, and to  extend to them the conditions of service and  emoluments of  the  railway servants as existed on  October  21,  1980, w.e.f.  22nd  October 1980. No doubt it was stated  in  this

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letter that the said decision would 705 prevail  till Government decided otherwise. Subsequently  on March  11, 1982, the Board also prescribed  the  pay-scales, dearness allowance, house rent allowance, city  compensatory allowance and productivity bonus, and fixed the age of their superannuation.  As also pointed out earlier, this court  in its  decision  reported in 1988 (4)  SCC  478,  subsequently directed  that  for the purpose  of  calculating  pensionary benefits the service rendered by the said employees prior to October  22,  1980 would be computed. What is  further,  the Ministry of Railways by its letter of May 13, 1983 placed on record  the  fact  that not only the employees  of  all  the statutory  canteens but the employees of eleven Delhi  based non-statutory canteens had been treated as railway  servants with effect from October 22, 1980. It must be remembered  in this  connection that neither the Railway Ministry  nor  the Railway  Board had stated in their letters/orders  that  the employees of the statutory canteens and of the eleven  Delhi based  non-statutory canteens were being treated as  railway servants only for the purposes of the Factories Act or  that they  were  to be so treated till further decision  of  this Court.     It is possible to place a liberal construction on  these letters/ orders and interprete the relevant direction  name- ly,  "till further directions from the Government" as  being the  directions  after  the decision of this  Court  in  the present matters, and for the sake of argument we may proceed on that basis while dealing with the present contention. The admitted  facts, however, are that these canteens have  been in  existence at their respective places continuously for  a number  of years. The premises as well as the  entire  para- phernalia for the canteens is provided by the Railway Admin- istration  and  belong to it. The employees engaged  in  the canteens have also been in service uninterruptedly for  many years. Their wages are reimbursed in full by the Rly. Admin- istration. The entire running of the canteens including  the work  of  the employees is subject to  the  supervision  and control  of  the  agency of the Railway  Admn.  whether  the Agency  is the staff-committee or the society. In  fact,  as stated  by  the  Rly. Administration  in  its  Establishment Manual  the  legal responsibility for  running  the  canteen ultimately  rests  with  it, whatever the  agency  that  may intervene. The number and the category of the staff  engaged in the canteen is strictly controlled by the Administration. As  has been pointed out earlier, much before the  order  of this  Court  dated October 22, 1980, the  employees  of  the departmental canteens/tiffin rooms were declared as  holders of  civil posts under the Government of  India  Notification No. 6(2)/23/77-Welfare dated December 11, 1979 which notifi- cation is an annexure-4 to the Administrative Instructions 706 referred  to above. That notification stated that all  posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and  according- ly, present and future incumbents of such posts would quali- fy  as holders of civil posts under the Central  Government. The notification further stated that necessary rules govern- ing  the  conditions of service of the  employees  would  be framed  under proviso to Article 309 of the Constitution  to have retrospective effect from October 1, 1979.  Accordingly the  service rules were framed under Article 309 as per  the Notification No. GSR-54 issued by the Govt. of India, Deptt. of  Personnel & Training on December 23, 1980.  These  rules contained  both  the  recruitment rules  and  conditions  of

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service  of the said employees including the  procedure  for disciplinary  action  to be taken against  them.  As  stated earlier  the Administrative Instructions are  applicable  to the canteens/tiffin rooms run by all the Ministries  includ- ing the Railway Ministry unless they had previously  decided to  be  exempt from them and had framed their own  rules  in that  behalf.  On behalf of the respondents, one  Shri  Sud, Joint  Director of Establishment, Ministry of  Railways  has filed  an  affidavit contending that Section  F  of  Chapter XXVIII of the Railway Establishment Manual (to the  relevant paragraphs  of which we have made a reference earlier)  con- tains  the necessary instructions for running  the  canteens and  hence  the Railway Administration should be  deemed  to have  been exempted from the operation of the said  Adminis- trative Instructions. Although there is nothing expressly on record  to show that the railway canteens are exempted  from the  said  Instructions, we will proceed on  the  assumption that  they are so exempted by virtue of the relevant  provi- sions of the Railway Manual. But the fact remains that there are  as  yet no notifications on the lines of  December  11, 1979  and  December 23, 1980 issued for the benefit  of  the employees in the railway canteens. Whatever the  differences in  the nature of work performed by the order staff  in  the different Ministries, it cannot be argued that there is  any difference  in  the work performed by the employees  in  the canteens run in the establishments of the Ministries. Hence, we  are of the view that if the said two  notifications  are applicable to the employees in the canteens run by the other departments  of the Government of India, there is no  reason why  the same should not apply also to the employees in  the canteens run by the Railways. On behalf of the Railway Admn. no material has been placed before us to treat the employees in their canteens as a class separate from the employees  in the canteens run by the other departments of the Government. In the circumstances, it would be highly discriminatory  not to  apply the said two notification to the employees in  the Railway  canteens. It would be violative of Articles 14  and 16 of 707 the  Constitution. We are, therefore, of the view  that  the employees  in  the statutory canteens of the  Railways  will have to be treated as Railway servants.     Thus  the relationship of employer and  employee  stands created  between the Railway Administration and the  canteen employees  from  the  very inception. Hence,  it  cannot  be gainsaid  that  for the purposes of the  Factories  Act  the employees in the statutory canteens are the employees of the Railways.  The  decision  of the Calcutta  and  Madras  High Courts (supra) on the point, therefore, are both proper  and valid.     22. The next question is whether the said employees  are railway  employees  for  all purposes.  Mr.  Ramaswamy,  the learned  counsel appearing for the Railways  contended  that the  Railways  undertake varied welfare  activities  in  the nature  of handicrafts centres, cooperative  stores,  banks, housing  societies, credit societies,  educational  institu- tions  etc.  and the Railways spend about a  hundred  crores annually  on  these activities. He submitted that if  it  is decided  to treat the employees engaged in the  canteens  as railway  employees it will be difficult to resist the  claim from  employees of these other institutions  numbering  over 27,500  for  a similar status. He also  submitted  that  the Railways provide financial assistance to various non-Railway institutions  such as non-Railway schools. But teachers  and other  employees working in these schools are the  employees

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of  the  respective organisations and cannot be  treated  as railway servants. Since, according to him, the canteens  are run for the benefit of the staff, the Government has only  a general  responsibility  to  see that the  labour  laws  are properly  followed and not infringed. He  further  submitted that  an  indentical  responsibility also  devolves  on  the Railways in regard to contractors who execute works for  the Railways  with their own labour. In addition,  the  Railways have  nearly  2.3  lakh casual labourers  who  are  normally employed on works which are of seasonal nature,  intermitant or extending over short periods. These employees are engaged by the contractor to whom the execution of work is  entrust- ed. In case the employees of the canteens are to be  treated as Railway servants, similar demands will be made from  such casual  labourers.  His next contention in this  behalf  was that the Railways have a primary objective of carrying goods and passengers, and the welfare activities are ancillary  to the  main  objective. Hence, the canteens  continue  at  the discretion  of the Railway Administration where  there  have provided  70%  subsidy to the management  of  the  statutory canteens. If at any stage the Government so decides, it  can change the form of this welfare measure 708 and  may choose to have another set-up which in  their  view may  prove more convenient and financially workable such  as engaging  a  contractor or an established  agency  like  Tea Boad,  Coffee Board, Women’s Organisation, etc. to  run  the canteens. For all these reasons, he submitted the  employees in  the  statutory  canteens should not be  treated  as  the Railway employees.     23.  While  discussing  above the  contention  that  the employees  in  the statutory canteens cannot be  treated  as Railway employees even for the purposes of the said Act,  we have referred to the various developments, and documents  on record including the court decisions. It is not necessary to repeat  them here. In view of the same, the  contention  ad- vanced by Mr. Ramaswamy that the Railway Admn. is engaged in varied  welfare  activities, and the  employees  engaged  in these  activities  will also have to be treated  as  Railway employees, in case, the canteen employees are recognised  as Railway  employees  does  not appeal to us.  We  express  no opinion  on the subject as to whether the employees  engaged in other welfare activities will or will not be entitled  to the status of the Railway employees, since neither they  nor the  facts pertaining to them are before us. Our  conclusion that the employees in the statutory canteens are entitled to succeed in their claim is based purely on facts peculiar  to them  as  discussed above. If by virtue of all  these  facts that  they are entitled to the status of  Railway  employees and  they cannot be deprived of that status  merely  because some other employees similarly or dis-similarly situated may also  claim the same status. The argument to say  the  least can  only be discribed as one in terroram, and as any  other argument of the kind has to be disregarded.     24.  (ii) Non-Statutory Recognised  Canteens:  Paragraph 2830 of the Railway Established Manual enjoins upon the Rly. Administration to take steps to develop their canteen organ- isation to the maximum possible extent as a measure of staff welfare  preferably by encouraging the development  of  can- teens  for staff on co-operative basis. This  injunction  is for  provision  of canteens in addition to the  canteens  as required by the Factories Act for which provision is made in paragraph 2829 of the said Manual. Paragraph 2831 lays  down the  principles  governing the setting up  of  the  canteens which  apply also to the nonstatutory canteens provided  for

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under  paragraph 2830. It says, among others things, that  a regular canteen should be provided where the strength of the staff  is  100 or more and a scheme for provision of  a  new canteen should be submitted to the Railway Board for approv- al  indicating  financial implications duly  vetted  by  the F.A.C.O. Paragraph 709 2833  contains  provisions for the management of  such  non- statutory canteens. Among other things, it states that  such canteens  can be run either by a Committee of Management  to be  formed  for  the purpose or  by  a  Consumer-Cooperative Society.  The Committee of Management should consist of  the duly  elected representatives of the staff and where  it  is run  by  a  Cooperative Society, it should  consist  of  the representatives of the share-holders of the Society.  Howev- er, in either of the cases, a representative of the  Railway Administration is to be nominated either as a Chairman or  a Secretary  or as a Member of the Committee. This nominee  of the  Railway Administration is under an obligation to  bring to  the  notice of the Administration any  decision  of  the Managing Commttee which is likely to affect the interests of the  Railway Admn. in its capacity as an owner of the  prem- ises and of the furniture, equipment, etc., or if the  deci- sion  is likely to be of considerable harm to the staff.  In such  cases, the Management Committee cannot take action  on the  particular  decision till the General  Manager  of  the Railway  has  recorded his decision thereon.  The  paragraph further  ordains  that where the canteens are managed  by  a co-operative  society,  the society should make  a  suitable provisions in its bye-laws for supervision of the canteen by the Committee of Management. The paragraph also makes provi- sion for granting loans to such canteens as initial  capital from  the  Staff Benefit Fund. Paragraph 2834  then  details various facilities which are extended to such canteens which include the necessary accommodation, sanitary and  ’electric installations,  furniture and cooking utensils. The  Railway Admn. is also required to bear rent on sanitary and electric installations, service taxes and charges for the electricity and  water  consumed. These canteens are  also  entitled  to subsidies  at present to the extent of 70% of the  wages  of the employees engaged therein.     25.  It  is further an admitted position  that  for  the purposes  of giving subsidy for wages, the rates of pay  and allowances  as  obtaining  in July 1963 were  adopted  as  a basis.  In  September 1967, on account of  a  representation received from the canteen employees, the Railway Board  left the  question of revision of the scales of pay and  dearness allowance to the Managing Committees. However to ensure that the canteen employees functioning at the Metropolitan Cities were not affected adversely, the Board prescribed a  minimum dearness  allowance  relief to the said  employees.  In  May 1970, the Board reviewed the question of scales of pay,  and decided to enhance the dearness allowance relief in  respect of  employees working in the Metropolitan Cities,  and  also fixed  the  scales of pay of the employees  working  in  all non-statutory  canteens (vide a Railway Board’s  letter  No. E(W) 69 710 C.N.  1-12 dated 29-5-1970). These scales of pay were  again revised  in December 1979, including dearness allowance  for employees working in the Metropolitan cities as well as  for those working in cities other than Metropolitan cities  with effect from 1-10-1979 (Railway Board’s letter No.  E-(W)/79- C.N. 1-12 dated 14-12-79). A. further revision of pay scales was  elfcoted  by  the Board in May  1983  (Railway  Board’s

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letter  No. E(W)/83/C.N. 1-8 dated 13-5-1983 to ensure  com- pliance  with the interim directions given by this Court  on April  22,  1983.  The direction of this Court  was  to  the effect  that the salary and allowances of the  employees  of the  non-statutory  canteens (recognised) should be  at  the same rate and on the same basis as applicable to the employ- ees  of  the statutory canteens deemed as  railway  servants with effect from October 22, 1980. This direction was on the basis  of  the decision of this Court given on  October  22, 1989 (supra). It is further an admitted fact that the  Board has made applicable to these employees the scales of pay  as recommended  by the Fourth Pay Commission with  effect  from January 1, 1986.     26. The employees in these canteens are also entitled to free  medical  treatment  as out-door  patients  in  railway hospitals,  to  railway passes/PTO’s, one  increment  as  an incentive  for  adoption of a small family.  They  are  also governed by the provisions of the Employees’ Provident  Fund Act.  The Board has also framed recruitment rules for  these employees  vide its letter dated June 7, 1978. These  rules, among  other  things, lay down minimum  qualifying  age  for recruitment,  and  superannuation age,  minimum  educational qualifications, the mode of recruitment and eligibility  for promotion  for  various posts. The nominee  of  the  Railway Administration  on the Managing Committee of the canteen  is to  be the Appointing Authority. At present there are  about 173  non-statutory recognised canteens employing about  2145 workers. 27. As pointed out earlier, from the decision dated March 7, 1980  of  the Delhi High Court in Writ Petition No.  269  of 1980 filed on behalf of the employees of eleven Delhi  based non-statutory  recognised  canteens,  the  Railway   Canteen Karamchari  Association had filed a special  leave  petition before  this  Court  being SLP No. 4132 of  1980  which  was disposed  of  by this Court by its decision of  October  22, 1980  (supra). By that decision, this Court had disposed  of the  said appeal in terms of the order which was  passed  in another  similar Civil Appeal No. 368 of 1978, and  the  em- ployees were given the same benefits by accepting the  prin- ciple laid down by the Calcutta High Court. Thus by the said decision, the employees of the non-statutory 711 canteens were directed to be treated on par with the employ- ees of the statutory canteens, although by giving liberty to the Railway Administration to agitate the point that neither the  employees  of the statutory nor  of  the  non-statutory recognised  canteens were railway employees either  for  the purposes of the Factories Act or for any other purpose.     28. Shri Ramaswamy advanced the same contentions in  the case  of these employees as he advanced in the case  of  the employees of the statutory-canteens. He submitted that these employees  are appointed by the Staff Managing Committee  or Co-operative  Societies and not by the Rly.  Administration, that their service in the canteen is purely in the nature of a private employment as in a private sector undertaking  and that  the recruitment procedures differ widely from  canteen to  canteen and they are not akin to the procedure  followed by  the Railways. The Managing Committee which appoints  the employees,  supervises and controls the canteens is  a  non- Government body. The said Committee functions as a  separate entity  independent  of the Railway Administration  and  the control when exercised by the Railway Administration is only to ensure that the canteen is run in conformity with certain requirements. There is no relationship of master and servant between  the Rly. Administration and the canteen  employees.

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The  letters of appointment issued to the employees make  it expressly clear that the employment is non-Governmental  and purely temporary and does not carry any pensionary or gratu- ity  benefits. The employees recruited further are not  sub- jected  to rigorous standards as to age  limit,  educational qualifications, medical fitness, character verification etc. He  further submitted that the order dated October 22,  1980 passed  by  this Court in the case of the employees  of  the eleven  Delhi  based  non-statutory  canteens  is  expressly subject  to the liberty given to the Railway  Administration to  contend in a future appropriate case that they  are  not railway employees and hence it cannot act as a precedent. He also  contended as he did in the case of the statutory  can- teen  employees,  that  if the employees  engaged  in  these canteens  are  treated as Railway  servants,  the  employees engaged  in other welfare activities, casual labourers  etc. may have also to be treated as such.     29.  These arguments can be dealt with together. In  the first  instance, there is hardly any difference between  the statutory  canteens and non-statutory  recognised  canteens. The statutory canteens are established wherever the  railway establishments employ more than 250 persons as is  mandatory under  the  provisions of Section 46 of the Act  while  non- statutory canteens are required to be established under 712 paragraph  2831  of  the  Railway  Estb.  Manual  where  the strength  of the staff is 100 or more. In terms of the  said paragraph, the non-statutory canteens to be recognised  have to  be  approved of by the Railway Board in  advance.  Every Rly.  Administration  seeking  to set up  such  canteens  is required  to  approach  the Railway Board  for  their  prior approval/recognition   indicating   financial   implications involved  duly  vetted by the Financial  Advisor  and  Chief Accounts  Officer of the Railway concerned. It is only  when the  approval  is  accorded by the Railway  Board  that  the canteen is treated as a recognised non-statutory canteen. By the  sanction, the details in regard to the number of  staff to  be employed in the canteen, recurring and  non-recurring expenditure etc. are regulated. The only material difference between  the statutory canteen and non-statutory  recognised canteen  is that while one is obligatory under the said  Act the  other  is not. However, there is no difference  in  the management  of the two types of canteens as is evident  from the provisions of paragraphs 2832 and 2833 which respective- ly provide for their management. Regarding the incidence  of cost to be borne by the Railways again, as far as the Manual is  concerned,  the only additional obligation cast  on  the Administration,  in  the case of the statutory  canteens  is that in addition to the facilities given to the non-statuto- ry canteens, the Administration has also to meet the  statu- tory obligations in respect of the expenditure for providing and  maintaining canteens arising from the said Act and  the rules  framed thereunder. A perusal of the  relevant  provi- sions shows that the said Act and the rules made  thereunder do not make demands on the Administration for more  expendi- ture than what is provided for in the Railway Manual for the non-statutory  canteens.  We have already  referred  to  the service conditions applicable to the employees of the statu- tory  and non-statutory canteens. Besides, while  discussing the  case  of the employees in statutory  canteens  we  have pointed  out the relevant provisions of  the  Administrative Instructions on Departmental Canteens in Government Officers and Govt. Industrial Establishments. These Instructions  are applicable  to  both statutory and  nonstatutory  recognised canteens.  The Instructions do not make any  difference  be-

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tween the two so far as their applicability is concerned. In fact  these  Instructions require that the canteens  run  by engaging solely part-time daily-wage workers may be convert- ed  to departmental canteens (para 1.3). Hence we donot  see why any distinction be made between the employees of the two types  of  canteens so far as their service  conditions  are concerned.  For this very reason, the two  notifications  of December 11, 1979 and December 23, 1980 (supra) should  also be equally applicable to the employees of these canteens. If this  is so, then these employees would also be entitled  to be treated as rail- 713 way servants. A classification made between the employees of the  two  types of canteens would be unreasonable  and  will have  no rational nexus with the purpose of the  classifica- tion.  Surely  it cannot be argued that  the  employees  who otherwise  do the same work and work under the  same  condi- tions  and  under a similar management have  to  be  treated differently merely because the canteen happens to be run  at an establishment which employs 250 or less than 250  members of the staff. The smaller strength of the staff may  justify a  smaller number of the canteen workers to serve them.  But that does not make any difference to the working  conditions of such workers.     We have already dealt with the other arguments  advanced by Shri Ramaswamy while dealing with the cases of  employees in  statutory  canteens. It is not necessary to  repeat  the said  discussion here. We are, therefore, of the  view  that the  case of these employees should be treated on  par  with that  of  the employees in the statutory canteens  and  they should also be treated for all purposes as railway servants. This  is apart from the fact that by an order of this  Court the employees of eleven Delhi based non-statutory recognised canteens have already been directed to be treated as railway servants for all purposes.     30.  (iii)Non-Statutory  Non-Recognised  Canteens:   The difference  between  the non-statutory recognised  and  non- statutory  nonrcognised canteen is that these  canteens  are not  started with the approval of the Railway Board  as  re- quired  under  paragraph 2831 of the  Railway  Establishment Manual.  Though, they are started in the premises  belonging to  the Railways they are so started with the permission  of the  local  officers. They are not required  to  be  managed either  as per the provisions of the  Railway  Establishment Manual or the Administrative Instructions (Supra). There  is no obligation on the Railway Administration to provide  them with  any  facilities  including  the  furniture,  utensils, electricity and water. These canteens are further not  enti- tled to nor are they given any subsidies or loans. They  are run by private contractors and there is no continuity either of  the  contractors or the workers engaged  by  them.  Very often  than  not the workers go out  with  the  contractors. There  is further no obligation cast even on the  local  of- fices  to supervise the working of these canteens. No  rules whatsoever are applicable to the recruitment of the  workers and  their service conditions. The canteens are run more  or less  on ad hoc basis, the Railway Administration having  no control on their working neither is there a record of  these canteens  or  of the contractors who run them  who  keep  on changing,  much  less of the workers engaged in  these  can- teens. In the circumstances we are of the view of 714 that the workers engaged in these canteens are not  entitled to claim the status of the railway servants.     31.  The result, therefore, is that the workers  engaged

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in  the statutory canteens as well as those engaged in  non- statutory recognised canteens in the Railway  Establishments are railway employees and they are entitled to be treated as such. The Railway Board has already treated the employees of all  statutory and eleven Delhi based  non-statutory  recog- nised canteens as railway employees w.e.f. October 22, 1980. The employees of the other non-statutory recognised canteens will, however, be treated as railway employees w.e.f.  April 1, 1990. They would, therefore, be entitled to all  benefits as  such railway employees with effect from the  said  date, according  to  the service conditions  prescribed  for  them under the relevant rules/orders.     The  Writ Petitions and appeals of these  employees  are allowed to the above extent accordingly with no order as  to costs.     32. As far as the employees in non-statutory  non-recog- nised canteens are concerned their petitions are  dismissed. There will, however, be no order as to costs. R.S.S.                               Petitions  and  Appeals allowed. 715