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CASE NO.: Appeal (civil)  5990 of 1997

PETITIONER: National Thermal Power Corporation Ltd.                                 

RESPONDENT: Vs. Karri Pothuraju & Ors.                                                  

DATE OF JUDGMENT: 13/08/2003

BENCH: S. RAJENDRA BABU & DORAISWAMY RAJU.

JUDGMENT: J U D G M E N T

RAJENDRA BABU, J.:

       The above appeal has been filed against the order dated 27.11.96 of a  Division Bench of the Andhra Pradesh High Court in Writ Appeal No.385 of 1996,  whereunder the Division Bench, while setting aside the order of the learned  Single Judge in Writ Petition No.3793 of 1992, allowed the claims in the writ  petition to the extent and subject to the conditions specified in the order.  The  appellant, National Thermal Power Corporation Ltd., Ramagundam Super  Thermal Power Station, is a Public Sector Undertaking of the Government of  India.  It started a canteen in the year 1983 for the benefit of the employees of  their unit, through a contractor and from that time onwards it was being run  through contractors engaged from time to time.  The total number of employees,  at the relevant point of time, were said to be 2300 and about 54 persons were  said to have been working in the canteen in various capacities â\200\223 cooks, servers,  cleaners etc.  It is not in controversy that the appellant is a factory governed by  the provisions of the Factories Act and Section 46 of the said Act, 1948 casts a  mandatory duty and obligation on the appellant to provide and maintain a  canteen for the benefit of all those serving in the unit.  Concedingly, the appellant  grants substantial subsidy and at one point of time, as found noticed in the order,  it was to the tune of Rs.1,95,000/-.  The respondents, at least many of them,  were said to be working from the year 1983, though engaged by contractors.   The Deputy Manager â\200\223 Administration and his subordinates were said to  supervise the working of the canteen in respect of preparation, service and  maintenance, to ensure quality of service as well as that it was carried on  beneficially to the workers.  It is also claimed that the said authority issued  identity cards also to the workers for entering the factory premises.  Apparently,  taking advantage of certain decisions of courts, including this Court, the  respondent-workers moved the High Court by means of the Writ Petition filed  under Article 226 of the Constitution of India seeking for a direction to the  appellant to regularize their services with attendant benefits.

       Appellants disputed the claim, contending that the canteen was run as a  beneficial measure, to cater to the needs of workers in the unit, that contractors  used to be engaged periodically â\200\223 at times different contractors for different  period, depending upon the successful offer made pursuant to invitation of  tenders, that they have nothing to do with the total strength of workers engaged  by such contractors, that they are neither workers relating to the manufacturing  activities of the appellant-Undertaking or they perform any work incidental thereto  or by any means could claim to be workers of the appellant within the meaning of  the Industrial Disputes Act, 1947.  The control, if at all, was said to be to ensure  that there is no industrial unrest on account of the manner of running the canteen  and proper food articles are made available hygienically and at the rates  stipulated without sacrificing the quality of the food stuffs, eatables and  beverages and such supervision cannot make them workers under the control of

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the appellant and that the relationship of Master and Servant and disciplinary  control over them was also with their employerâ\200\223contractor, at all times.

       The learned Single Judge was not prepared to accept the claim of the  workers and was of the view that the workers in the canteens run by Railways  and LIC stand on a different footing and there can be no comparison of the  workers in the canteen under consideration with those in the other institutions.   The writ petition, therefore, came to be dismissed and the workers were  constrained to file an appeal.  The Division Bench, while allowing the appeal,  made the same subject to the following directions:

"Learned counsel for the first respondent has, however, urged before us  that while affirming the judgment of the Bombay High Court as above, the  Supreme Court has given some directions and in the instant case for the  obvious reasons of the existence of the canteen in the hands of the  contractors ever since the establishment of the canteen, the Court should  issue similar directions as issued by the Supreme Court in the said case.   While we do not have much information as to the type of the employees  the canteen is having and whether there are any employees in the  canteen who do not qualify within the minimum and the maximum age  limits prescribed under the policy of the first respondent or that they do  not fit in the minimum medical standards of minimum service period, it is  not possible, therefore, to specify, in the same terms as the Supreme  Court has done, in the instant case, but to observe generally that a  person who has crossed the age limit or a person who is below the age of  employment can obviously be not regularized or treated as employee of  first respondent.  Similarly, a person who is not medically fit cannot claim  employment and if has so worked alright, but cannot by virtue of such  employment claim the benefits of the employees of the first respondent.   It would be advisable in such circumstances that the first respondent  corrects its mistakes and allows the cases of all the employees and treats  all those who are not unfit to continue in the employment of first  respondent as its employees."

       Hence, this appeal.

       The learned Senior Counsel appearing on behalf of the appellant placed  strong reliance upon the decisions reported in Indian Petrochemicals  Corporation Ltd. & Another vs. Shramik Sena & Others [(1999) 6 SCC 439]  and other related decisions to contend that the Division Bench went wrong in  reversing the decision of the learned Single Judge and that the respondent-  workers, who are indisputedly the workers in the canteen engaged by the  contractor, cannot claim to be part of the appellants establishment and claim for  regularisation in the services of the appellant-Undertaking and consequently the  order under challenge is liable to be set aside.  Per contra, learned Senior  Counsel appearing for the respondent-workers placed reliance upon the  decisions reported in Indian Overseas Bank vs. I.O.B. Staff Canteen Workers’  Union & Another [(2000) 4 SCC 245] as well as Steel Authority of India Ltd. &  Others vs. National Union Waterfront Workers & Others [(2001) 7 SCC 1] and  in VST Industries Ltd. vs. VST Industries Workers’ Union & Another [(2001)  1 SCC 298] to contend that the decision of the Division Bench does not require  any interference in this appeal.  Reliance was also placed on an earlier decision  of this Court in The Saraspur Mills Co. Ltd. vs. Ramanlal Chimanlal & Others  [(1974) 3 SCC 66] for sustaining the decision of the High Court under-challenge.  

       We have carefully considered the submissions of the learned counsel  appearing on either side.  In (1974) 3 SCC 66 (supra), this Court held that where  there is a statutory liability on the company concerned to run a canteen in the  factory, then even though the canteen was run by a Co-operative Society, the  employees working in the canteen would be covered by the definition of the word  "employed" envisaged in Section 3(13) of the Bombay Industrial Relations Act.   In (2001) 1 SCC 298 (supra) dealing with the claim of workers of a canteen run  through a private contractor in pursuance of the obligation of the industrial  establishment under Section 46 of the Factories Act, 1948, this Court upheld the  claim of workers for being treated as the workers of the company itself.  In (2001)

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7 SCC 1 (supra), a Constitution Bench of this Court considered the claims of  contract labourers engaged by a contractor for absorption in the establishment of  the principal employer on issuance of the abolition notification under the  provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the  rules made thereunder.  This Court, while adverting to the position of law in force,  has observed as follows: "106. We have gone through the decisions of this Court in VST Industries  case, G.B. Pant University case and M. Aslam case.  All of them relate to  statutory liability to maintain the canteen by the principal employer in the  factory/establishment.  That is why in those cases, as in Saraspur Mills  case the contract labour working in the canteen were treated as workers  of the principal employer.  These cases stand on a different footing and it  is not possible to deduce from them the broad principle of law that on the  contract labour system being abolished under sub-section (1) of Section  10 of the CLRA Act the contract labour working in the establishment of  the principal employer have to be absorbed as regular employees of the  establishment.

107. An analysis of the cases, discussed above, shows that they fall in  three classes: (i) where contract labour is engaged in or in connection  with the work of an establishment and employment of contract labour is  prohibited either because the industrial adjudicator/court ordered abolition  of contract labour or because the appropriate Government issued  notification under Section 10(1) of the CLRA Act, no automatic absorption  of the contract labour working in the establishment was ordered; (ii)  where the contract was found to be a sham and nominal, rather a  camouflage, in which case the contract labour working in the  establishment of the principal employer were held, in fact and in reality,  the employees of the principal employer himself.  Indeed, such cases do  not relate to abolition of contract labour but present instances wherein the  Court pierced the veil and declared the correct position as a fact at the  stage after employment of contract labour stood prohibited; (iii) where in  discharge of a statutory obligation of maintaining a canteen in an  establishment the principal employer availed the services of a contractor  the courts have held that the contract labour would indeed be the  employees of the principal employer."

       Consequently, we consider it to be too late in the day for the appellant,  which had an obligation under the Factories Act, 1948 to run the canteen to  contend to the contrary.  So far as the case on hand is concerned, the Division  Bench has chosen to leave liberty to the appellant to consider the claims of the  workers as to whether they satisfy the requirements and whether they are  otherwise unfit for confirmations.  In the light of all these, we are unable to  countenance the challenge to the decision of the High Court, as either legitimate  or valid one.  The appeal, therefore, fails and shall stand dismissed.  No costs.