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CASE NO.:

Appeal (civil) 6410 of 2000

PETITIONER:

Hindalco Industries Ltd

RESPONDENT:

Association of Engineering Workers

DATE OF JUDGMENT: 14/03/2008

BENCH:

Tarun Chatterjee & P. Sathasivam

JUDGMENT:

JUDGMENT

CIVIL APPEAL NO. 6410 OF 2000

P. Sathasivam, J.

1) Hindalco Industries Ltd., aggrieved by the judgment and

order dated 20.01.2000 of the High Court of Bombay in L.P.A.

No. 58 of 1999 confirming the order of the Industrial Court

accepting the case of the Association of Engineering Workers'

Union, has filed the above appeal.

2) The respondent herein namely, Association of

Engineering Workers' Union (hereinafter referred to as "the

Union") filed a complaint of unfair labour practice under Item

9 of Schedule IV of the Maharashtra Recognition of Trade

Unions and Prevention of Unfair Labour Practices Act, 1971

(hereinafter referred to as "the MRTU and PULP Act, 1971")

against Hindalco Industries Ltd. \026 appellant herein (hereinafter

referred to as "the Company") before the Industrial Court at

Thane. According to the Union, the complainant is a trade

union recognized as a representative union of the appellant-

company. The Company has engaged employees in unfair

labour practices on and from 1971 on a continuous basis from

month to month, therefore, the period of limitation is not

applicable. However, as a measure of abundant precaution,

the Union has filed a separate application for condonation of

delay. The Company has engaged about 500 workmen in the

manufacture of aluminium and aluminium products. The

complainant-Union (respondent herein) is a recognized Union

for the establishment of the appellant-Company. In terms of

Section 46 of the Factories Act, 1948, the Company is duty

bound to maintain a canteen for the benefits of workmen

working in an establishment. Accordingly, the Company is

maintaining a Canteen at its Kalwa establishment. In order to

avoid giving the workmen working in the canteen, permanency

and benefits which are applicable to permanent workmen of

the Company, the Company is illegally treating the workmen

working the canteen as contract workmen. It is the specific

case of the complainant-Union that the contract is sham and

is a mere arrangement made for the purpose of avoiding

permanency and giving wages and benefits as are applicable to

permanent workmen of the company.

3) On the date of filing of the complaint, out of 27 workmen

who have worked for various periods, 23 workmen have

worked for more than ten years continuously the maximum

being for 25 years. The remaining four workmen have also

worked for more than 3 = years and as such are permanent

workmen of the Company. The Company has been making

arrangement showing on papers that the contract is being

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given to someone or the other whereas in fact, the canteen is

engaged and run by the Company itself. It is, therefore, the

case of the Union that 27 workmen whose names are

mentioned in the complaint are, in fact, the workmen of the

Company. As per the various decisions of this Court, the

workmen who are working in the statutory canteen are treated

as workmen of the principal employer. On the same analogy,

all the 27 workmen are workers of the Company.

4) The Company has engaged and is engaging in unfair

labour practices by treating its own workmen as workmen on

contract. The workmen are entitled for a declaration that they

are the workmen of the Company. In order to comply with the

technicalities that are required to be done, the Union is

simultaneously making an application to the State Contract

Labour Advisory Board to abolish the contract system as far as

the canteen is concerned in the appellant-Company. The

Union is also raising a demand that all the 27 workmen

should be absorbed in the Company from the initial date of

their employment in the Company and pay them wages and

other benefits that are applicable to permanent workmen of

the Company.

5) The Company filed the reply in the Industrial Court

stating that the complaint is time barred since filed beyond the

prescribed time limit laid down under the provisions of the

MRTU & PULP Act, 1971, hence the same is to be dismissed in

limine. Further the dispute under reference is pertaining to

employees employed under the contract i.e., contract labour,

there is a specific remedy and relief available under the

Contract Labour (Regulation & Abolition) Act, 1971, which is a

specific forum available to redress the grievances, if any.

Inasmuch as the Complainant-Union has already approached

the appropriate authority for abolition of contract labour, the

present complaint before the Industrial Court is liable to be

dismissed on the principle of res judicata. With regard to the

merits, it is stated that the practice of giving contract to run

the canteen is in vogue right from inception. The complainant

is very well aware of the contract and the canteen contractor

who is managing the canteen. There are several decisions of

this Court holding that employing contract labour cannot be

agitated within the forum under MRTU & PULP Act 1971,

when there is specific remedy available in Contract Labour

(Regulation & Abolition) Act, 1971. Moreover, since it is a

disputable point such dispute is required to be resolved

through the machinery provided under the Industrial Disputes

Act, 1947, hence, any complaint to that effect under MRTU &

PULP Act, 1971 is not maintainable. It is further reiterated

that working of the canteen is distinct and separate which is

neither incidental nor connected with the manufacturing

process of the factory. The canteen is exclusively run and

managed by the contractor which is an outside agency.

6) On the above pleadings and on the basis of the oral and

documentary evidence, the Industrial Court, by order dated

15.10.1998, allowed the complaint and declared that the

Company has committed unfair labour practice under Item 9

of Schedule IV of the MRTU & PULP Act, 1971 and further

directed the Company to cease and desist such unfair labour

practice. In the same order, the Industrial Court directed the

Company to absorb and make the canteen employees referred

to in the Annexure as permanent employees of the Company

from the date of its order. In addition to the same, the

Industrial Court directed the Company to pay them the wages

and other benefits like the last category of unskilled workmen

in the Company.

7) Aggrieved by the aforesaid order of the Industrial Court,

the Company preferred Writ Petition No. 6181 of 1998 before

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the High Court of Bombay. The learned single Judge, by order

dated 25.01.1999, confirmed the order of the Industrial Court

and dismissed the writ petition. The said order of the learned

single Judge was challenged before the Division Bench of the

High Court in L.P.A. No. 58 of 1999. By order dated

22.03.1999, the said L.P.A. was summarily dismissed.

Questioning the same, the Company filed an appeal before this

Court in Civil Appeal No.6120 of 1999 (@ S.L.P.(C) No. 9244 of

1999). By order dated 25.10.1999, this Court allowed the

appeal of the Company, set aside the order passed by the High

Court and remitted the matter to the High Court for deciding

the same on merits. Pursuant to the said direction, L.P.A. No.

58 of 1999 was restored on its file and heard afresh and the

Division Bench by the impugned order dismissed the Letters

Patent Appeal and confirmed the order of the Industrial Court.

Aggrieved by the aforesaid order of the Division Bench of the

High Court dated 20.01.2000, the Company has filed the

present appeal.

8) Heard Mr. P.P. Rao, learned senior counsel for the

appellant-Company and Mr. S.F. Deshmuk, learned counsel

for the respondent-Union.

9) The points for consideration in this appeal are (i) whether

the Industrial Court is justified in issuing direction to absorb

all the employees of the canteen in the company's employment

and pay them wages and other benefits to the extent of last

category of unskilled workers in the company; (ii) whether the

High Court is right in affirming the said order?

10) Since, the Union has filed a complaint under item 9 of

Schedule IV of the MRTU and PULP Act, 1971, before going

into the merits, let us refer the Preamble and relevant

provisions of the Act. The preamble of the MRTU and PULP

Act, 1971 reads as under:-

"An Act to provide for the recognition of trade unions for

facilitating collective bargaining for certain undertakings; to

state their rights and obligations; to confer certain powers on

unrecognized unions; to provide for declaring certain strikes

and lock-outs as illegal strikes and lock-outs; to define and

provide for the prevention of certain unfair labour practices;

to constitute courts (as independent machinery) for carrying

out the purposes of according recognition to trade unions

and for enforcing the provisions relating to unfair practices;

and to provide for matters connected with the purposes

aforesaid.

WHEREAS, by Government Resolution, Industries and

Labour Department, No. IDA.1367-LAB-II, dated the 14th

February, 1968, the Government of Maharashtra appointed

a Committee called "the Committee on Unfair Labour

Practices" for defining certain activities of employers and

workers and their organizations which should be treated as

unfair labour practices and for suggesting action which

should be taken against employers or workers, or their

organizations, for engaging in such unfair labour practices;

AND WHEREAS, after taking into consideration the report of

the Committee the Government is of opinion that it is

expedient to provide for the recognition of trade unions for

facilitating collective bargaining for certain undertakings; to

state their rights and obligations; to confer certain powers on

unrecognized unions; to provide for declaring certain strikes

and lock-outs as illegal strikes and lock-out; to define and

provide for the prevention of certain unfair labour practices;

to constitute courts (as independent machinery) for carrying

out the purposes or according recognition to trade unions

and for enforcing provisions relating to unfair practices; and

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to provide for matters connected with the purposes

aforesaid; It is hereby enacted in the Twenty-second Year of

the Republic of India as follows:-"

Among the various definitions, we are concerned about Section

3(16) which refers to "unfair labour practices" means unfair

labour practices as defined in section 26. Chapter-VI, Section

26 speaks about Unfair labour practices. It reads:

"26. Unfair labour practices

In this Act, unless the context requires otherwise, 'unfair

labour practices' mean any of the practices listed in

Schedules II, III and IV."

Sections 4 and 5 refer Industrial Court and its duties. As per

Section 27, no employer or union and no employees shall

engage in any unfair labour practice. Section 28 provides

elaborate procedure for dealing with complaints relating to

unfair labour practices. Section 30 speaks about powers of

Industrial and Labour Courts. Section 32 mandates the Court

shall have the power to decide all matters arising out of any

application or a complaint referred to it for the decision under

any of the provisions of the Act. Section 59 makes it clear that

if any proceeding is initiated under the the MRTU and PULP

Act, 1971, no proceeding shall be entertained by any authority

in respect of those matters under the Bombay Industrial

Relations Act, 1946 (Bombay Act) and Industrial Disputes Act,

1947 (in short "the I.D. Act"). Section 60 prohibits filing of

suits in any civil court in respect of the subject-matter of a

complaint or application to the Industrial Court or Labour

Court under this Act.

11) Though an objection was raised as to limitation in filing

complaint before the Industrial Court in view of reasons

adduced and accepted by the Industrial Court and the High

Court, we are of the view that there is no need to elaborate the

same. We also reject the supplementary objection, namely,

the complaint is hit by the principle of res judicata since

according to the Industrial Court, no sufficient material was

placed to throw the complaint on the ground of earlier/parallel

proceeding in any other forum.

12) Coming to the main issue, according to the Union, the

Company is having 500 employees working in the

manufacturing and other activities. It is their specific case

that there is a canteen inside the campus of the

manufacturing unit and it is a statutory canteen and,

therefore, the employees working in the canteen numbering 27

are the employees of the company. It is not in dispute that the

provisions of Factories Act, 1948 are applicable to the

Company. Section 46(1) mandates that the State Government

may make rules requiring that in any specified factory wherein

more than 250 workers are ordinarily employed, a canteen or

canteens shall be provided and maintained by the occupier for

the use of the workers. The presence of a canteen within the

Company premises and statutory provision as referred above

are not disputed. However, it is the case of the Company that

the employees in the canteen are working through a contractor

and, therefore, they are not entitled for status of permanent

employees of the Company. Mr. P.P.Rao, learned senior

counsel appearing for the appellant-Company, by drawing our

attention to various decisions of this Court would submit that

unless relationship of employer and employee exists, the

present issue/claim cannot be gone into by the Industrial

Court under the provisions of the MRTU and PULP Act, 1971.

In other words, according to him, in view of the

objection/stand taken in the reply statement before the

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Industrial Court, the issue raised by the Union cannot be

adjudicated and it is for the Union or workmen to get an order

under the provisions of the I.D. Act and thereafter, approach

the Industrial Court for necessary relief, if any. On the other

hand, Mr. Deshmuk, learned counsel appearing for the

respondent-Union vehemently contended that in view of the

object of the enactment and all other details such as existence

of a canteen from several years, control and supervision by the

company, the contractor is only a name-lender and the

Industrial Court has jurisdiction to go into the issue raised in

the complaint. He further contended that based on the

relevant acceptable materials, the Industrial Court granted

relief in favour of the Union which was rightly affirmed by the

High Court and the same cannot be lightly interfered under

Article 136 of the Constitution of India.

13) In the earlier part of our judgment, we have referred to

the claim of both parties as well as relevant provisions of the

the MRTU and PULP Act, 1971. Now let us consider various

pronouncements on the point in issue. The earliest decision

relied on by the Company is General Labour Union (Red

Flag), Bombay vs. Ahmedabad Mfg. & Calico Printing Co.

Ltd. and Others, 1995 Supp (1) SCC 175. In that decision,

General Labour Union (Red Flag), Bombay had filed a

complaint before the Industrial Court under the MRTU and

PULP Act, 1971 complaining of the breach of Items 1(a), (b),

4(a), (f) and 6 of Schedule II and Items 7, 9 and 10 of Schedule

IV of the said Act. The case of the complainant-union was

that the 21 workmen who were working in one of the canteens

of the respondent-company, were not given the service

conditions as were available to the other workmen of the

company and there was also a threat of termination of their

services. It is an admitted fact that these workmen were

employed by a contractor who was given a contract to run the

canteen in question. The complaint was filed on the footing

that the workmen were the employees of the company and,

therefore, the breach committed and the threats of

retrenchments were cognizable by the Industrial Court, under

the said Act. The complaint proceeded on the basis as if the

workmen were a part of the work-force of the company. The

facts on record reveal that the workmen were never recognised

by the respondent-company as its workmen and it was the

contention of the company that they were not its employees.

The Industrial Court dismissed the complaint holding that

since the workmen were not the workmen of the respondent-

company, the complaint was not maintainable under the said

Act. The High Court in writ petition confirmed the said finding

and dismissed the petition on the same ground. Hence, the

Labour Union approached this Court by filing appeal. This

Court has concluded as under:-

"2. As pointed out both by the Industrial Court and the

High Court, it was not established that the workmen in

question were the workmen of the respondent-company. In

the circumstances, no complaint could lie under the Act as

is held by the two courts below. We, therefore, find nothing

wrong in the decision impugned before us. The workmen

have first to establish that they are the workmen of the

respondent-company before they can file any complaint

under the Act. Admittedly, this has not been done. It is open

for the workmen to raise an appropriate industrial dispute in

that behalf if they are entitled to do so before they resort to

the provisions of the present Act."

14) In Vividh Kamgar Sabha vs. Kalyani Steels Ltd. and

Another, (2001) 2 SCC 381, similar claim under the MRTU

and PULP Act, 1971 was considered. The two-Judge Bench

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following the General Labour Union (Red Flag), Bombay

case (supra) dismissed the appeal filed by the workers-Union

on the ground that the complaint was not maintainable.

Similar direction as issued in General Labour Union (Red

Flag), Bombay case (supra) has been issued in this case also.

15) The next decision which is also under the MRTU and

PULP Act, 1971 is Cipla Ltd. vs. Maharashtra General

Kamgar Union and Others, (2001) 3 SCC 101. When similar

claim was made by the trade-Union against the Management \026

Cipla Ltd., the same was negatived by the Labour Court.

However, the Division Bench of the High Court took a different

view of the matter and allowed the complaint. While

considering the appeal filed by Cipla, the two-Judge Bench

accepted the case of the Management and rejected the stand

taken by the trade-Union. The argument of learned senior

counsel appearing for the Union that in view of Section 32 of

the Act incidental question can be considered by the Industrial

Court was not acceptable and this Court concluded:

"11. Next decision relied upon by Shri Singhvi is Central

Bank of India Ltd. v. P.S. Rajagopalan AIR 1964 SC 743 to

contend that even in cases arising under Section 33-C(2) of

the Industrial Disputes Act the scope, though very limited,

certain incidental questions can be gone into like a claim for

special allowance for operating adding machine which may

not be based on the Sastry Award made under the provisions

of Chapter V-A. The learned counsel pointed out that in the

event we were to hold that it is only in clear cases or

undisputed cases the Labour Court or the Industrial

Tribunal under the Act can examine the complaints made

thereunder, the whole provision would be rendered otiose

and in each of those cases provisions of the Bombay

Industrial Relations Act, 1946 or the Industrial Disputes Act

will have to be invoked. We are afraid that this argument

cannot be sustained for the fact that even in respect of

claims arising under Section 33-C(2) appropriate dispute can

be raised in terms of Section 10 of the Industrial Disputes

Act and that has not been the position in the present case.

Nor can we say that even in cases where employer-employee

relationship is undisputed or indisputably referring to the

history of relationship between the parties, dispute can be

settled and not in a case of the present nature where it is

clear that the workmen are working under a contract. But it

is only a veil and that will have to be lifted to establish the

relationship between the parties. That exercise, we are

afraid, can also be done by the Industrial Tribunal under the

Bombay Industrial Relations Act, 1946 or under the

Industrial Disputes Act. Therefore, we are afraid that the

contention advanced very ably by Shri Singhvi on behalf of

the respondents cannot be accepted. Therefore, we hold that

the High Court went far beyond the scope of the provisions of

the Act and did not correctly understand the decisions of

this Court in Gujarat Electricity Board, Thermal Power Station

v. Hind Mazdoor Sabha (1995) 5 SCC 27 and General Labour

Union (Red Flag) v. Ahmedabad Mfg. & Calico Printing Co. Ltd.

1995 Supp (1) SCC 175. The correct interpretation of these

decisions will lead to the result, which we have stated in the

course of this order."

By saying so, allowed the appeal filed by Cipla Ltd.

15) The next decision heavily relied on the side of the

appellant-Company is Sarva Shramik Sangh vs. Indian

Smelting & Refining Co. Ltd. and Others, (2003) 10 SCC

455. Here again, this Court considered the very same

provisions of the MRTU and PULP Act, 1971. Similar

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contentions were raised by the Union and the Management.

Basing reliance on General Labour Union (Red Flag) Bombay

(supra) and Cipla Ltd. (supra), this Court concluded:

"24. \005 \005. In order to entertain a complaint under the

Maharashtra Act it has to be established that the claimant

was an employee of the employer against whom complaint is

made under the ID Act. When there is no dispute about such

relationship, as noted in para 9 of Cipla case the

Maharashtra Act would have full application. When that

basic claim is disputed obviously the issue has to be

adjudicated by the forum which is competent to adjudicate.

The sine qua non for application of the concept of unfair

labour practice is the existence of a direct relationship of

employer and employee. Until that basic question is decided,

the forum recedes to the background in the sense that first

that question has to be got separately adjudicated. Even if it

is accepted for the sake of arguments that two forums are

available, the court certainly can say which is the more

appropriate forum to effectively get it adjudicated and that is

what has been precisely said in the three decisions. Once the

existence of a contractor is accepted, it leads to an inevitable

conclusion that a relationship exists between the contractor

and the complainant. According to them, the contract was a

facade and sham one which has no real effectiveness. As

rightly observed in Cipla case it is the relationship existing

by contractual arrangement which is sought to be

abandoned and negated and in its place the complainant's

claim is to the effect that there was in reality a relationship

between the employer and the complainant directly. It is the

establishment of the existence of such an arrangement

which decides the jurisdiction. That being the position, Cipla

case rightly held that an industrial dispute has to be raised

before the Tribunal under the ID Act to have the issue

relating to actual nature of employment sorted out. That

being the position, we find that there is no scope for

reconsidering Cipla case the view which really echoed the

one taken about almost a decade back."

16) In Oswal Petrochemicals vs. Govt. of Maharashtra

and Others, (2005) 12 SCC 433 which is also a two-Judge

Bench, while considering the very same Act, namely, the

MRTU and PULP Act, 1971 following the judgment of this

Court in Cipla Ltd. (supra) disposed of the appeal on the

same terms.

17) Though Mr. Deshmuk, learned counsel for the Union

relied on several decisions and also highlighted that all the

above referred decisions are distinguishable, it is useful to

refer to a three-Judge Bench decision of this Court in Indian

Petrochemicals Corporation Ltd. and Another vs. Shramik

Sena and Others, (1999) 6 SCC 439. This is an appeal

preferred by M/s Indian Petrochemicals Corporation Limited

and another (Management) against an order dated 29-8-1997

made by the High Court of Judicature at Bombay in W.P. No.

2206 of 1997 filed by the Shramik Sena and another

(workmen). Against the very same judgment, the workmen

also filed appeal being C.A. No. 1855 of 1998. Both the

appeals clubbed together, heard and disposed of by the said

common judgment. The workmen therein filed a writ petition

before the High Court of Bombay for a declaration that the

workmen whose names are shown in Ex. 'A' annexed to the

said petition, are the regular workmen of the Management and

are entitled to have the same pay scales and service conditions

as are applicable to regular workmen of the Management. It

was further prayed that a direction be given to the

Management to absorb the workmen listed in the said Ex. 'A'

with effect from the actual date of their entering into the

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service of the canteen of the Management and to pay them all

consequential benefits including arrears of wages etc.

18) According to the workmen, the workers listed in Ex. 'A' to

the petition are working in the canteen of the Management in

its factory at Nagothane, District Raigad in the State of

Maharashtra, and the Management was treating them as

persons employed on contract basis through a contractor

named M/s Rashmi Caterers, who was impleaded in the writ

petition as Respondent 5. It was contended on behalf of the

above workmen that the factory of the Management where the

workmen are employed, is governed by the provisions of the

Indian Factories Act, 1948 and the canteen where the said

workmen are employed is a statutory canteen established by

the Management as required under the said provisions of the

Act. It was further contended that the said canteen is

maintained for the benefit of the workmen employed in the

factory and the Management had direct control over the said

workmen and that Respondent 5, though shown as a

contractor, has no control over the Management,

administration and functioning of the said canteen. The

canteen is a part of the establishment of the Management and

the workers working in the canteen are the workmen of the

said Management. The further contention of the workmen was

that the work carried on by them in the said canteen is

perennial in nature and the canteen is incidental to and is

connected with the establishment of the Management. It is

their further case that the Management is denying the said

workmen the status of its regular employees and was treating

them as contract employees contrary to the statutory

provisions and judicial pronouncements of this Court.

19) On behalf of the Management, it was contended before

the High Court that it was a public sector undertaking and it

cannot appoint any person in contravention of the recruitment

policy which requires the Management to follow a roster

system. Therefore, apart from the fact that the workmen were

not in the regular employment of the said Management, the

absorption or regularisation of the services of the said

workmen would contravene Article 16(4) of the Constitution,

and would also contravene the reservation policy which is

applicable for recruitment in the establishment managed by it.

20) The High Court, following the decision in Parimal

Chandra Raha vs. LIC, 1995 Supp (2) SCC 611 allowed the

writ petition holding that since the workmen whose names

were found in Annexure 'A' to the petition are working in the

statutory canteen of the Management, they are entitled to be

absorbed in the employment of the said Management and also

issued directions in regard to absorption of the employees.

21) Being aggrieved by the said judgment and order of the

High Court, the Management has preferred C.A No. 1854 of

1998 and being aggrieved by the conditions imposed while

directing the absorption of the employees, on behalf of the

workmen C.A. No. 1855 of 1998 has been preferred before this

Court.

22) Para 10 of the said decision shows that while considering

at the SLP stage for granting leave, a two-Judge Bench of this

Court observed that the questions involved in these appeals

are of considerable importance and it will be desirable if the

same is decided by a Bench of three Judges. Consequently,

both the appeals were heard by a three-Judge Bench. Similar

contentions as raised in the case on hand were raised on

behalf of the Management and Workmen. No doubt, taking

note of the definition 2(l) of the Factories Act which defines

"worker", did not accept the workmen's contention that

employees of a statutory canteen ipso facto become the

employees of the establishment for all purposes. After

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considering Parimal Chandra Raha's case (supra) and

M.M.R. Khan vs. Union of India, 1990 Supp SCC 191 and

Reserve Bank of India vs. Workmen, (1996) 3 SCC 267, this

Court concluded that the workmen of a statutory canteen

would be the workmen of the establishment for the purpose of

the Factories Act only and not for all other purposes. Had the

three-Judge Bench stopped therein, we have no other option

except to apply the principle as stated in General Labour

Union (Red Flag) case (supra), Vividh Kamgar Sabha case

(supra), Cipla Ltd. case (supra), Sarva Shramik Sangh

case (supra) and Oswal Petrochemicals. However, from

para 23 onwards, the three-Judge Bench discussed the main

issue with which we are concerned, namely, "whether from the

material on record it could be held that the workmen are, in

fact, the employees of the Management for all purposes".

Since the factual details that arose in the Indian

Petrochemicals case (supra) are identical to the case on

hand, we reproduce the following discussion and the ultimate

conclusion:

"25. Though the canteen in the appellant's establishment is

being managed by engaging a contractor, it is also an

admitted fact that the canteen has been in existence from

the inception of the establishment. It is also an admitted fact

that all the employees who were initially employed and those

inducted from time to time in the canteen have continued to

work in the said canteen uninterruptedly. The employer

contends that this continuity of employment of the

employees, in spite of there being a change of contractors,

was due to an order made by the Industrial Court, Thane, on

10-11-1994 wherein the Industrial Court held that these

workmen are entitled to continuity of service in the same

canteen irrespective of the change in the contractor.

Consequently, a direction was issued to the Management

herein to incorporate appropriate clauses in the contract

that may be entered into with any outside contractor to

ensure the continuity of employment of these workmen. The

Management, therefore, contends that the continuous

employment of these workmen is not voluntary. A perusal of

the said order of the Industrial Court shows that these

workmen had contended before the said Court that the

Management was indulging in an unfair labour practice and

in fact they were employed by the Company. They specifically

contended therein that they are entitled to continue in the

employment of the Company irrespective of the change in the

contractor. The Industrial Court accepted their contention as

against the plea put forth by the Management herein. The

employer did not think it appropriate to challenge this

decision of the Industrial Court which has become final. This

clearly suggests that the Management accepted as a matter

of fact that the respondent workmen are permanent

employees of the Management's canteen. This is a very

significant fact to show the true nature of the respondents'

employment. That apart, a perusal of the affidavits filed in

this Court and the contract entered into between the

Management and the contractor clearly establishes:

(a) The canteen has been there since the inception of the

appellant's factory.

(b) The workmen have been employed for long years and

despite a change of contractors the workers have continued

to be employed in the canteen.

(c) The premises, furniture, fixture, fuel, electricity, utensils

etc. have been provided for by the appellant.

(d) The wages of the canteen workers have to be reimbursed

by the appellant.

(e) The supervision and control on the canteen is exercised

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by the appellant through its authorised officer, as can be

seen from the various clauses of the contract between the

appellant and the contractor.

(f) The contractor is nothing but an agent or a manager of

the appellant, who works completely under the supervision,

control and directions of the appellant.

(g) The workmen have the protection of continuous

employment in the establishment.

26. Considering these factors cumulatively, in addition to

the fact that the canteen in the establishment of the

Management is a statutory canteen, we are of the opinion

that in the instant case, the respondent workmen are in fact

the workmen of the appellant Management.

27. At this stage, it is necessary to note another argument of

Mr Andhyarujina that in view of the fact that there is no

abolition of contract labour in the canteen of the appellant's

establishment, it is open to the Management to manage its

canteen through a contractor. Hence, he contends that by

virtue of the contract entered into by the Management with

the contractor, the respondent workmen cannot be treated

as the employees of the Management. This argument would

have had some substance if in reality the Management had

engaged a contractor who was wholly independent of the

Management, but we have come to the conclusion on facts

that the contractor in the present case is engaged only for

the purpose of record and for all purposes the workmen in

this case are in fact the workmen of the Management. In the

background of this finding, the last argument of Mr

Andhyarujina should also fail."

23) In the light of above background, let us consider the

factual details available and as asserted in the complaint of

the Union filed in our case. In order to establish the specific

plea raised in the complaint, the complainant has examined

one Dagdu Deshmukh and Shankar Nam Patil. Both of them

are working in the canteen. According to Deshmukh, he

joined the Company on 22.02.1982 and according to Shankar

he is in the service of the Company from 01.11.1989. The

Complainant has enclosed a list of the employees working in

the canteen in the Annexure to the complaint. The Industrial

Court, on perusal of the said list, found that they joined the

service in different years since 1978 till 1992. Most of them

have worked for more than 10 years. The Industrial Court has

also concluded that their dates of joining mentioned in

Annexure to the complaint have not been disputed by the

Company. It is also demonstrated before the Court that there

were number of contractors since 1971 till the contract was

taken by M/s Gambhir Caterers, since 1965 to 1968 one

Mehra was the canteen contractor. Thereafter, in 1968, one

S.S.Shetty worked as a Canteen Contractor. He was running

the said canteen for 14 years. Thereafter, the Universal

Caterer was the Canteen Contractor from 1981 to 1995. After

1995, Gambhir Caterer is the Canteen Contractor. It is

relevant to mention and in fact not disputed that in spite of

the changes in the Canteen Contractor the service of the

canteen employees continued and they were not issued fresh

appointment orders by any of the canteen contractors

including the last one, namely, Gambhir Caterer.

24) The Industrial Court analysed the evidence of

Complainant's witness and also the evidence of the Company.

From the evidence and other materials, the Court noted the

following information:

(a) Canteen has been in existence since 1965.

(b) Canteen employees were working in four shifts.

(c) Canteen is situated in the company premises.

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(d) The company has provided utensils, gas and other

articles like chair, table, etc.

(e) The company has also provided room to the canteen

employees for their residential complex.

(f) Seven to Eight employees who are bachelors are

residing in the said room.

(g) The company has provided electricity and water.

Respective charges are not being deducted from the

wages of the employees.

(h) The company has also supplied umbrellas for the

rainy season.

(i) The company is paying maintenance charge and

electricity charge and other expenses of the canteen.

(j) All the facilities including premises to the canteen

are provided by the company.

(k) The wages of employees of the canteen are

reimbursed by the company.

(l) The company is purchasing the food items.

(m) When ever there is rise in the wages of the

employees, it is the company who is to pay the

same.

(n) The company is providing three sets of uniforms to

the employees and also providing service

washermen.

(o) The employer's contribution P.F. is reimbursed by

the company.

(p) In the past the company has regularized some of the

employees working in the canteen.

From the above, it is clear that all the facilities to the canteen

are provided by the company.

25) It is true that Sridhar Bhandari, the Manager of Gambhir

Caterer, in his evidence has stated that the workers are

keeping the attendance card, muster roll (Ex.C-12 and C-13)

and payment details of Gambhir Caterer. In view of the above

statement, the Industrial Court ventured to find legitimate

control over the activities of the canteen employees. While

considering the said issue, the Court verified various terms of

agreement dated 28.11.1995. The relevant terms have been

reproduced in para 49 of the order of the Industrial Court

which clearly show that it is the duty of the company to

provide canteen premises free of rent along with free water,

electricity, fuel, furniture, fixtures, crockery and all cooking

utensils. It further shows that the company has fixed the rate

of meals, eatables, snacks, tea and beverages etc. As rightly

pointed out by the Industrial Court, apart from the evidence

let in on the side of the union and the company from the terms

of contract, it is clear that it is the duty of the company to

provide sufficient premises, furniture, fuel, gas, electricity,

water and also laid down several procedure as to how food

items to be supplied. As rightly concluded by the Industrial

Court, the company has clearly laid down the quality,

quantity, the rates and manner of supplying food articles.

After adverting to clause (d) (1)(2) of the agreement, the

Industrial Court has concluded that though responsibility is

cast upon the contractor to make payment of wages, P.F.

contribution etc. on submission of the bills, the amounts are

to be paid/reimbursed by the company. The above details

clearly show that though certain amounts are being paid by

the contractor, in the real sense, ultimately, it is the company

which pays all the amounts. From the evidence and the

materials, it is also clear that the activities of the workmen in

the canteen, their suitability to work, physical fitness are

ultimately controlled by the company. In those

circumstances, the Industrial Court is perfectly right in

arriving the conclusion that the evidence coupled with the

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terms of agreement show that the contract is nothing but

paper agreement. As stated earlier, in spite of change of

several contractors, neither the workmen were replaced nor

fresh appointments were made. On the other hand, same

workmen were continuing even on the date of filing of the

complaint. Taking note of all the above-mentioned relevant

materials, special circumstances and most of the employees

are working for more than 10-15 years and finding that there

is no valid reason for the company to deny their permanency,

the Industrial Court rightly concluded that the company has

committed unfair labour practice under Item 9 of Schedule IV

of the MRTU and PULP Act, 1971 and issued appropriate

directions. With the materials placed, we are also of the

opinion that even though the record shows that canteen is

being run by the contractor, ultimate control and supervision

over the canteen is of the Company. Inasmuch as the facts on

hand are identical to the decision in Indian Petrochemicals

Corpn. Ltd. case (supra) which is a three-Judge Bench

decision which was not cited before any of the decisions relied

on by the company, in view of the circumstances narrated in

the earlier paras, we accept the conclusion arrived by the

Industrial Tribunal.

26) Coming to the impugned order of the High Court, it is

argued that in spite of the earlier direction of this Court in SLP

(C) No. 9244 of 1999, the High Court has not adverted to the

relevant aspects and committed the same error in confirming

the order of the Industrial Court. In the light of the said

contention, we have gone through the impugned decision of

the High Court, which clearly shows that the High Court was

conscious about the observation of this Court. The High Court

order further shows that it has adverted to the relevant details

furnished before the Industrial Court and analysed the same

and finally after recording that the finding of fact arrived by

the Industrial Court cannot be termed as perverse and they

are based on proper appreciation of evidence and sound

reasoning dismissed the Letters Patent Appeal. We do not see

any error or infirmity in arriving such conclusion. On the

other hand, as discussed above, we are in entire agreement

with the conclusion arrived by the Industrial Court and

affirmed by the High Court.

27) In the light of what has been stated above and in view of

abundant factual details as mentioned in para 24 of this

judgment as well as the reasonings as laid down in Indian

Petrochemicals Corpn. Ltd. case (supra), we reject the

stand taken by the appellant-Company. Accordingly, the

appeal fails and the same is dismissed. Inasmuch as the

Industrial Court has issued directions as early as on

15.10.1998 and not implemented due to court proceedings, we

direct the appellant-Company to implement the same within a

period of three months from the date of receipt of copy of this

judgment. No costs.