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PETITIONER: SMT. USHA RANI DATTA, AAYA/ATTENDANT AND OTHERS

       Vs.

RESPONDENT: STATE INDUSTRIAL COURT, INDORE & ORS.

DATE OF JUDGMENT30/04/1985

BENCH: DESAI, D.A. BENCH: DESAI, D.A. KHALID, V. (J)

CITATION:  1985 AIR 1016            1985 SCR  (3)1049  1985 SCC  (3) 148        1985 SCALE  (1)1065

ACT:      Industrial Disputes Act:      Family Planning  Clinic-Financial Expenditure  incurred by  Central   Government-Taken   over   by   Public   Sector Undertaking   Steel    Plant-Employees   of   Clinic-Whether employees of Steel Plant.

HEADNOTE:      Urban Family  Clinic was  set up  by a  Steel Plant for implementation of  family welfare schemes. The Chief Medical Officer of  The Plant was the administrative officer for the Clinic. The financial expenditure of the Clinic was borne by the Government of India. Subsequently the Clinic was treated as an  integral part  of the administration of the Plant and its employees  were absorbed  with effect  from February  4, 1976.      The appellants  who  were  serving  as  Aaya/Attendants moved an  application before  the Labour  Court for a relief that they  are being wrongly treated as fresh employees from the date  of absorption  and that  their services  since the commencement of  employment be treated as continuous for the purpose of gratuity, retrenchment and leave etc.      The management  of the  Plant contested the application contending that the Clinic was an independent unit set up by the Government of India and that it was not an integral part of the  administration and, therefore, the services rendered prior to  the absorption  could not  be treated  as  service under the  Plant and, therefore, the application deserves to be dismissed.      The Labour Court allowing the application held that the Clinic had  hardly any  independent existence  and that  the employees  of  the  Clinic  were  in  reality  and  for  all practical purposes the employees of the Plant.      Two revision petitions were filed before the Industrial Court-one on behalf of the Plant, and the other on behalf of the appellants.  The Industrial Court dismissed the revision petition of the appellants with a further direction 1050 that the  application before  the Labour Court was liable to be dismissed.  While allowing  The revision  petition of the management, the  Industrial Court  held that family planning centers were run by different public undertakings and it was

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started as  part of  the general policy of the Government of India and  even though  the expenditure  of the  centre  was reimbursed by the Government, the Clinic of the centre could not be  said  to  be  an  industry  within  the  meaning  of expression in  the Act nor could it be said to be incidental to the  main business  of  the  Plant.  The  prayer  in  the application before  the Labour  Court  that  the  appellants should be  given additional  and better  wages  and  service conditions was beyond the competence of the Labour Court and consequently the application was not maintainable.      The writ petition filed by the appellants was dismissed by the High Court,      Allowing the Appeal, ^      HELD: 1.  The findings  of facts  as  recorded  by  the Labour Court  and which  have neither been departed from nor questioned  by   the  High   Court  clearly   point  to  the inescapable conclusion  that the Clinic had no independent - existence of  its own and that for all practical purposes it was under the administrative control of the Plant. [1053 F]      2. The  Clinic had no independent existence. In fact it was an  euphemism to  call it an independent undertaking. It was part and parcel of the administrative set up. The Clinic was managed by tho Chief Medical Officer of the Plant with a designation of  Administrative Officer,  and was accountable for the   money  received from  the Government of India. The labour Court  was perfectly  justified in  holding that  the employees of  the Clinic  were the  employees of  the  Plant working in  a department under the administrative control of Chief  Medical   Officer   who   was   under   the   overall administrative control  of the  management of the Plant. The Labour Court  was perfectly  justified in holding that since the inception of the Clinic the employees were the employees of the  Plant and  that the  absorption was an acceptance of reality avoiding the pretence. [1054 E; G-H; 1055 A-B]      3. The Industrial Court was in error in concluding that whether the  application as  made was  not maintainable. The reasons which  appealed to the Labour Court for holding that the   application    was   maintainable   are   indisputably unquestionable and  the view  to the  contrary is untenable. [1055 C]  4. The  High  Court  has  overlooked  that  Family Planning Scheme  has to  be implemented  in larger  national interest. Public sector undertakings owned by the Government of India  may be  directed to carry out the scheme. For this purpose the  Clinic was  set  up  under  the  administrative control of  the Chief  Medical Officer  of the  Plant. If  a hospital can  be said  to be  run for  the  welfare  of  the employees of  the Plant  how the  Clinic which would also be described as a hospital for giving advice in family planning could be  differentiated from  a hospital.A  modern hospital can as  well have  a family planning clinic. The distinction drawn by  the High  Court lacks  logic. The  Clinic  was  an integral 1051 department of  the Plant  and  had  hardly  any  independent existence.  The   independent  paper   existence  was  found unworkable  in   the  long  run  and  therefore  the  Public Enterprises Committee  directed to  absorb the  employees of the Clinic in the establishment of the Plant. Accordingly no other view  is possible  than the  on taken  by  the  Labour Court. [1055 E-H]      Bangalore water  Supply &..  Sewerage Board  etc. v. R. Rajappa & others, 11978] 3 SCR 207, referred to.

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JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2231 of 1985.      From the  Judgment and  Order  dated  8.3.1983  of  the Madhya Pradesh  High Court  in Misc.  Petition No.  1124  of 1982.      R. Satish for the Appellants.       S.K. Mehta for the Respondents.       The Judgment of the Court was delivered by      DESAI, J. Special leave granted.           A trivial dispute disposed of by an eminently just and  legally   correct  order   by  the   Labour  Court  was unnecessarily  interfered  with  by  the  Industrial  Court, Madhya Pradesh  which has  forced  employees  working  in  a comparatively lower  grade to  knock at  the doors  of  this Court.      Urban Family  Planning Clinic  (’Clinic’ for short) was set up  at  Bhilai  for  implementation  of  family  welfare schemes of  the  Government  of  India  in  accordance  with approved pattern set out in the letter of Ministry of Health dated May  16, 1963. The Chief Medical Officer of the Bhilai Steel Plant  was to  be the  administrative officer  for the Clinic The  entire expenditure  of the Clinic was met by the Government of  India by  giving 100%  grant  though  it  was stated as  a fact  that this amount was not brought into the bank account  of Bhilai  Steel Plant  but was deposited in a separate bank  account in  the State Bank of India under the name and  style of  Bhilai Steel Plant Urban Family Planning Clinic   Grant-in-aid    Account.   Subsequently    on   the recommendation of  Bureau of  Public Enterprises, the Clinic was treated as an integral part of the 1052 administration of  Bhilai  Steel  Plant  and  the  employees working in  the Clinic  were absorbed  as employees  of  the Bhilai Steel Plant effective from February 4, 1976.      Smt. Usha  Rani Datta and 11 others who were serving as Aaya/Attendants etc.  (presumably Class  IV employees) moved an application  before the  Labour Court  for a  relief that they are  being wrongly  treated as fresh employees from the date  of  absorption  and  that  their  services  since  the commencement of  employment somewhere  in 1964 be treated as continuous for  the purpose  of gratuity,  retrenchment  and leave etc.  The application  was moved  in the Labour Court, Durg but  it came  to be  transferred to  Labour Court    at Raipur.      The management  of the Bhilai Steel Plant contested the application contending  that the  Clinic was  an independent unit set  up by  the Government of India and that it was not an integral  part   of the  administration of  Bhilai  Steel Plant and  therefore the  services  rendered  prior  to  the absorption on  February 4,  1976 could  not  be  treated  as service under  the Bhilai  Steel  Plant  and  therefore  the application deserves to be dismissed.      The learned Presiding Officer of the Labour Court after hearing  both   sides  and  taking  into  consideration  the evidence produced  before it held that the Clinic had hardly any independent  existence and  that the  employees  of  the Clinic were  in reality  and for  all practical purposes the employees of  the Steel  Plant. Accordingly  the application was allowed and the necessary relief was given.      Two revision  petitions came  to be  filed  before  the Industrial Court  at Madhya  Pradesh set up under the Madhya Pradesh Industrial  Relations  Act.  One  Revision  Petition being No.  10/MPlR/81 was  filed by  the Executive Director,

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Bhilai  Steel  Plant  questioning  the  correctness  of  the decision of the Labour Court. Original applicants before the Labour Court  Smt.  Usha  Rani  Datta  and  others  filed  a Revision Petition being No. 2/MPIR/81 praying for relief not granted by the Labour Court. ‘      Both the  revision petitions  were  disposed  of  by  a learned  Member   of  the   Industrial  Court  by  a  common judgement.      Taking up  the revision  petition of  the management it was held 1053 family  planning   centres  were  run  by  different  public undertakings and it  was started  as part  of the  general policy  of the Government of  India and  even though the entire expenditure of the Centre was reimbursed by the Government of India, the clinic of  the centre  could not  be said  to be an industry within the meaning of the expression in the Act nor could it be said  to be incidental to the main business of the Bhilai Steel Plant. The learned Member further held that the prayer in the  application before  the Labour  Court was  that  the petitioners  before  the  Labour  Court  who  were  formerly employed in  the Family  Planning  Clinic  should  be  given additional and  better wages and service conditions and this subject was  beyond the  competence of the Labour Court, and for these  reasons the  application  was  not  maintainable. Accordingly the  revision petition  filed by  the management was allowed  and  the  revision  petition  of  the  original petitioners was  dismissed with a further direction that the application  before  the  Labour  Court  was  liable  to  be dismissed.      After an  unsuccessful writ petition No. 1124/82 in the High  Court  of  Madhya  Pradesh  at  Jabalpur,  theoriginal applicants have filed this appeal by special leave.      The findings  of facts  as recorded by the Labour Court and which  have neither been departed from nor questioned by the High  Court clearly  point to the inescapable conclusion that the  Clinic had no independent existence of its own and that  for   all  practical   purposes  it   was  under   the administrative control  of the  Bhilai Steel  Plant. Let  us recapitulate those findings, of facts. The Clinic was set up at Bhilai  somewhere  in  1964  according  to  the  approved pattern set  out in  the letter  of the  Ministry of  Health dated May  16, 1963. This letter was annexed as Annexure R-l to the  writ petition, in the High Court. Bhilai Steel Plant is an  wholly owned  Government  of  India  undertaking.  It received grant to meet the entire expenditure of the Clinic. After the  independent existence on paper from 1964 to 1976, the pretence  was removed  and the  reality accepted in that all the  employees of  the Clinic were absorbed as employees of the  Bhilai Steel  Plant. This  becomes  clear  from  the letter of  the Senior  Personnel Manager, Bhilai Steel Plant dated February 4, 1976. It provides that the General Manager has approved  absorption of Family Planning staff as regular employees of  the Bhilai  Steel Plant  under  Chief  Medical Officer with imme- 1054 diate effect,  against posts  and  scales  set  out  in  the letter. It  was further  stated that the posts, designations and scales  are personal  to the  existing incumbents and on finalisation  of   standard  manning   &  designations,  the absorbed personnel would be suitably adjusted, to the extent feasible. Therefore  till the  absorption, the  pretence was that  the   Clinic  even   though  it   wholly   under   the administrative  control of the Chief Medical Officer, Bhilai

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Steel Plant  who was none other than a full-time employee of the Bhilai  Steel Plant, was treated independent. Absorption erased the pretence. These facts are not in dispute and were not controverted before us.      The learned  Member of  the Industrial  Court with whom High Court  appears to  have agreed, was of the opinion that when the  Clinic had  its  separate  existence  it  was  not covered in  the expression  ’industry’ and  that even though Bhilai Steel  Plant is  an industry, the Clinic could not be styled as industry. In our opinion this distinction drawn is entirely meaningless.  If Bhilai  Steel Plant is an industry and if  under the  decision of this Court in Bangalore Water Supply &  Sewerage Board  etc. v  R. Rajappa & others (1) an hospital is  an industry, this distinction drawn between two branches of  administration of  Bhilai Steel  Plant attaches importance to  a  shadow  without  substance  and  substance without significance The Clinic had no independent existence In fact  it was  an euphimism  to  call  it  an  independent undertaking. lt  was part  and parcel  of Bhilai Steel Plant administrative set-up. May be for purpose of accounting 100% grant received  from the  Government of  India was kept in a separate account  but that  does not  clothe the Clinic with any independent existence. lt was nowhere suggested that the employees of  the Clinic were employees of the Government of India This  aspect did  agitate the  mind of  the High Court when it  observed that:  ’it is  a moot question whether the employees in  the Clinic were employees of the Government of India or  of the  Plant.   The undisputed  fact is  that the Clinic was  managed by Chief Medical Officer of Bhilai Steel Plant with  a designation  of Administrative  Officer of the Clinic and  was accountable  for the money received from the Government of  India as  grant  to  the  Undertaking  called Bhilai Steel  Plant and  if it  was never contended that the employees of the Clinic were the employees of the Government of  India,  indisputably  the  Labour  Court  was  perfectly justified in  holding that  the employees of the Clinic were the employees of the Bhilai Steel (l) [1978] 3 SCR, 207 1055 Plant working  in  a  department  called  Clinic  under  the administrative control  of Chief  Medical  Officer  who  was under the  overall administrative  control of the management of Bhilai  Steel Plant. In our opinion, therefore the Labour Court was  perfectly justified  in holding  that  since  the inception of  the Clinic the employees were the employees of the Bhilai  Steel Plant  and  that  the  absorption  was  an acceptance of reality avoiding the pretence.      The learned Member of the Industrial Court was in error in concluding  that whether  the application as made was not maintainable. The reasons which appealed to the Labour Court for  holding  that  the  application  was  maintainable  are indisputably unquestionable  and the  view to  the  contrary does not commend to us.      Lastly we  may refer  to one  observation of  the  High Court which  may create  confusion in  future and  therefore requires to be properly understood. Says the High Court that the Clinic  was not  a canteen  or a  hospital run  for  the welfare of the employees in the main industry and it was not opened as  an operation incidental to the main industry- The High Court  concluded that  for this  reason  the  employees working in  the  Clinic,  could  not  be  taken  to  be  the employees employed  i‘n the  Iron and Steel Industry carried on by  the Plant.  Unfortunately the  High Court  overlooked that family  planning scheme has to be implemented in larger national interest.  Public, Sector undertakings owned by the

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Government of  India may  be  directed  to  carry  out  this scheme. Probably  imbued with  this idea, the Clinic was set up under  the administrative  control of  the Chief  Medical Officer of  the Plant.  If a  hospital can be said to be run for the welfare of the employees of the plant as observed by the High  Court one  fails to understand, how a clinic which could also  be described  as a hospital for giving advice in family planning  could be  differentiated  from  a  hospital modern hospital  can as  well have a family planning clinic. The  distinction  drawn  by  the  High  Court  lacks  logic. Therefore also  one can  safely conclude that the clinic was an integral  department of  the, Plant  and had  hardly  any independent existence.  The independent  paper existence was found unworkable  in the  long run  and therefore the Public Enterprises Committee  directed public  enterprise to absorb the employees  of the  Clinic in  the establishment  of  the Plant. Accordingly  no other  view is  possible than the one taken by the Labour Court. 1056      Accordingly this  appeal is allowed and the decision of the learned Member of the Industrial Tribunal as well as the judgment of  the High  Court are set aside and the one given by the  Labour Court  is restored with costs throughout. The total costs is quantified at Rs. 5,000 A.P.J.                                       Appeal allowed. 1057