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PETITIONER:

PARIMAL CHANDRA RAHA & ORS.

Vs.

RESPONDENT:

LIFE INSURANCE CORPORATION OF INDIA & ORS.

DATE OF JUDGMENT29/03/1995

BENCH:

SAWANT, P.B.

BENCH:

SAWANT, P.B.

MAJMUDAR S.B. (J)

CITATION:

1995 AIR 1666 1995 SCC Supl. (2) 611

JT 1995 (3) 288 1995 SCALE (2)518

ACT:

HEADNOTE:

JUDGMENT:

SAWANT, J.:

1. The appellants - 42 workmen -working in the canteens

at four different offices of the respondent-Corporation

in Calcutta, are involved in the present proceedings. In

1985, they had approached this Court for certain reliefs by

a writ petition under Article 32 of the Constitution. By

its order of 19th July, 1986, this Court had directed them

to approach. the High (Court. hence they had withdrawn die

writ petition with liberty to move the High Court under

Article 226 of the Constitution, which they did and the

present appeal arises out of the said proceedings. Since on

behalf of the respondents an objection is raised that the

appellants have been claiming in these proceedings relief

which they had never prayed for in the writ petition before

the High Court, we may at the outset summarise the contents

of the writ petition filed by them in the High Court.

2. In para 2 of the writ petition, the appellants have

averred that they are canteen employees of the Corporation

and working in the canteens managed by the Corporation. In

para 3, they have stated that they are employed in the

canteens of the Corporation and some of them for decades,

since the inception of the Corporation and others for a

minimum of seven years, and are holding the designations

variously of Canteen General Manager, Canteen Manager-cum-

Salesman, Kitchen Clerk, Canteen Clerk, Halwai, Assistant

Halwai, Cook, Bearer, Wash-boy and Sweeper etc. In para 4

they have specified the four departmental canteens of the

Corporation where they have been working. In para 5, they

have averred there that they are paid at the rate much below

the rate at which canteen employees working under different

Government departmental canteens including those run by

statutory Corporations and Railways are paid. They have

also stated there that the employees of the canteens in

different Government offices and Railways throughout the

country are enjoying at least the pay-scales which are

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enjoyed by the peons of the respective offices. In para 6,

they have given the emoluments which the Class-IV employees

of the Corporation get which are between Rs.700/- and 800/-

per month against the wages they get as canteen employees

ranging from Rs. 100/- to Rs.200/per month. In paras 7 and

16 of the writ petition, to quote them verbatim, it is then

averred as follows:

"Your petitioners state that the employees and

the staffs of the respondent no. 1 at all its

establishments axe provided with facilities of

canteen by the respondents for more than few

decades and as such providing of canteen

facilities forms a condition of service of the

employees and staffs of the respondent no. 1.

Your petitioners state that by usage and cus-

tomary benefits, canteen facilities has become

the condition of service of the employees of

the respondent no. 1 and as such running of

the Canteen is incidental to the running

business and/or industry of the Life Insurance

Corporation of India [Respondent No. 1].

x x x x x

Your petitioners state that they are engaged

in the work of the canteen which

292

is incidentally connected with the main

industry of the respondent no.1 and as such

they are workmen working under the respondent

no. 1"

3. It is against the background of the said averments in

the main body of the writ petition that in paragraph 18

thereof they have averred that the respondent-Corporation

being an instrumentality of the State and being the State

within the meaning of Article 12 of the Constitution, cannot

deny them equal pay-scales with other canteen employees of

the Government departments/Railways and other statutory

Corporations or take a stand or policy different from that

followed by the Government department, Railways and other

instrumentalities of the State. With regard to pay-scales

of the canteen employees, they have stated there that till

date the respondent-Corporation has not framed any pay-scale

for the canteen employees and as such have acted in a

discriminatory manner violating Article 14 of the Constitu-

tion. Thereafter, in ground No.2 of the petition they have

stated that the canteen workers of the respondent-

Corporation being engaged in operation incidentally

connected with the industry carried on by the respondents,

the respondents cannot deny them the minimum wages given to

their employees. In ground No.3, it is alleged that the

canteen facility being condition of service of the staff and

employees of the respondent-Corporation as per usage and

custom, the appellants, being canteen employees and engaged

in operation incidentally connected with the industry

carried on by the respondent, "automatically become the

direct employees under the respondents and as such they

cannot be discriminated against and denied the minimum wages

that is prevalent in the Life Insurance Corporation. In

ground No.4,they have stated that the appellants are working

under the respondents through the agencies, and being

engaged in work incidentally connected with the industry

carried on by the Corporation, they are entitled to get the

pay that is admissible to regular employees of the

Corporation. It is with these averments in the main body of

the petition and the grounds that the appellants have in

prayer [b] of the petition, claimed the relief of the

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issuance of the writ of mandamus commanding die respondent-

Corporation to comply with the policy of "equal pay for

equal work" and pay them the minimum salary that is enjoyed

by the staff of the Corporation and also to follow the

policy that is prevalent for canteen workers in other

Government departments, Railways and statutory Corporations.

It is thus clear from the writ petition filed by the

appellants before the High Court that they have prayed for

the relief of minimum wages paid to the employees of the

respondent-Corporation on the ground that they are the

regular employees of the Corporation. In other words, it is

implicit in the said relief claimed by them that they are to

be deemed to be the regular employees of the Corporation and

paid the minimum salary that is paid to its other regular

employees.

4.The case of the respondent-Corporation before the learned

Single Judge of the High Court as made out in their counter

to the writ petition was that the canteens did not belong to

it nor were they run by it. The Corporation only gave its

employees the facilities to run the canteens. The canteens

were run during different periods either by the canteen-

committees of the staff or their cooperative society through

the contractors, and the appellants were engaged by the

contractors or the- coop-

293

erative society. It has no connection much less contract of

employment with the appellants. Nor does it have any

control over their working, conditions of service or the

termination of their services. They are, therefore, not the

employees of the Corporation and cannot be deemed- to be so.

Hence they are not entitled to the relief claimed by them.

5.The learned Single Judge by his decision of 27th

September, 1989 allowed the writ petition and directed the

respondent-Corporation to implement the policy of equal pay

for equal work and pay the appellants minimum salary as is

enjoyed by the regular staff of the Corporation or such pay

as is enjoyed by regular canteen workers in the other

Government establishments or public undertakings. The

learned Judge also directed that the appellants shall be

treated as direct workers under the Corporation and shall be

given all service benefits accordingly.

6.Against the said decision of the learned Single Judge, the

respondent-Corporation preferred a Letters Patent Appeal

before the Division Bench of the High Court which by the

impugned decision dated 10th October, 1991, allowed the ap-

peal, set aside the decision of the learned Single Judge and

dismissed the appellants writ petition. It is this decision

of the Division Bench which is under challenge in the

present appeal.

7.The questions to be answered in this appeal, therefore,

are: [i] whether the appellants are or should be deemed to

be the regular employees of the respondent Corporation, and

if the answer is in the affirmative, [ii] what pay-scales

and other service conditions should be made available to

them.

8. A preliminary objection was raised to the framing of

the first issue by Shri Sanghi appearing for the respondent-

Corporation, as pointed out at the outset, that be

appellants had not claimed any such relief in the writ

petition itself and hence they cannot widen the scope of the

petition and ask for the relief in question in this appeal.

We have referred in extenso to the averments made in the

writ petition, earlier. They show in unmistakable terms

that the appellants approached the High Court with a

specific plea that they are the employees of the respondent-

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Corporation and as such, they should be paid the minimum

wages which are being paid to it other regular employees.

The relief of minimum wages paid to the other regular

employees of the Corporation on the basis of the principle

of equal pay for equal work is thus claimed on the ground

that they are also the regular employees of the Corporation.

Thus, the relief claimed includes in it the basis of the

relief, viz., their status as the regular employees of the

Corporation. It is unnecessary to restate here the law

regarding the interpretation of the pleadings. They have to

be read as a whole and construed accordingly. Thus con-

strued, the relief claimed leaves no doubt that it is based

on the claim for the status of the regular employees of the

Corporation. We, therefore, find no substance in the

preliminary objection.

9. Coming now to the main question as to whether the

appellants should be deemed to be the regular employees of

the Corporation, we may first refer to the statutory

provisions with regard to the canteen.

10. Section 46 of the Factories Act,

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1948 which is a Central enactment reads as follows:

"46. Canteens. - [1] The State Government may

make rules 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 user 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 therefor;

[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 foodstuffs and

which shall be borne by the employer;

[e] the delegation to the Chief Inspector,

subject to such conditions as may be pre-

scribed, of the power to make rules under

clause [c]."

11.This provision has to be read with the relevant

provisions of Section 47 [1] of the said Act which are as

follows:

"47. Shelters, rest rooms and lunch rooms. -

[1] In every factory wherein more than one

hundred and fifty workers are ordinarily

employed, adequate and suitable shelters or

rest rooms and a suitable lunch room with

provision for drinking water where workers can

cat meals brought by them shall be provided

and maintained for the use of be workers;

Provided that any canteen maintained in

accordance with the provisions of Section 45

shall be regarded as part of the requirements

of this sub-section:"

12.There is no dispute that the Factories Act is not

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applicable to the offices of the respondent-Corporation.

What is applicable is the West Bengal Shops and Es-

tablishments Act which is a State enactment. However, there

is no provision in the said Act with regard to canteens.

13.We may now refer to the law on the subject as is evolved

through various judicial decisions.

14.In the Ahmedabad Manufacturing and Calico Printing

Company, Ltd[ Calico Mills] v. Their Workmen [(1953) II LLJ

647] which is a decision of the Labour Appellate Tribunal of

India and which is quoted approvingly in Saraspur Mills Co.

Ltd. v. Ramanlal Chimanlal and Ors. [infra], the facts were

that by notifications issued by the State Government, the

provisions of Section 46 of the Factories Act, 1948 were

made applicable to a large number of textile mills including

the appellants before the Tribunal. As a result, it was

compulsory for the mills to maintain suitable canteens for

the use of their workmen. The contention of the appellant-

Mills was that assuming that the canteens were run through

the contractors, the canteen was not a part of the

undertaking so as to render the management respon-

295

sible for the wages and dearness allowance of the staff of

the canteen and that the maintenance of the canteen was not

in the course of, or for the purpose of conducting the

undertaking. The Tribunal held that in view of the

statutory obligation cast on the mills to run the canteen,

the running of the canteen was a part of the undertaking.

For this purpose, the Tribunal also relied upon the decision

of its Special Bench in Elphinstone Spinning and Weaving

Mills Company Ltd. v. SM. Sable and nine other clerks [the

Bombay Textile Clerks' Union] [1953 ) LLJ 7521 where the

Tribunal had considered the case of employees of the grain

shops run in the Mills by the contractors. The Special

Bench had held there that the employees of the grain shops

were entitled to be regarded as the employees of be 1516

since the running of the grain shop had become a part of the

undertaking within the meaning of the definition of

'employer' in subsection [14] (e) of Section 3 of the Bombay

Industrial Relations Act. The Tribunal held that there was

a considerable similarity between the grain shop and the

canteen for the purposes of the said definition. The

Tribunal overruled the contention that the earlier decision

of the Special Bench was erroneous and needed further

consideration.

15.In Dharangadhara Chemical Works Lsd v. State of

Saurashtra [(1957) SCR 1521, the question was whether the

agarias who were engaged by the manufactures of salt were

the workmen of the manufactures or whether they were inde-

pendent contractors. The facts were that the appellant

manufacturers were the lessees holding licences for the

manufacture of salt on the demised land. The salt was

manufacture by a class of professional labourers known as

agarias from rain water that got mixed up with the saline

matter in the soil. The work was seasonal in nature and

commenced in October after the rains and continued till

June. Thereafter, the agarias left for their own villages

for cultivation work. 'The demised lands were divided into

plots called pattas and allotted to the agarias with a sum

of Rs.400/- for each patta to meet the initial expenses.

The same patta was generally allotted to the same agaria

every year and if the patta was extensive in area, A was

allotted to two agarias. After the manufacture of salt,

they were paid 5 as. 6 pies per maund. At the end of each

season, accounts were settled and they were paid the.

balance due to them. They worked with the members of their

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families and were free to engage extra our on their own

account and the manufacturer had no concern therewith. No

hours of work had been prescribed, no muster rolls main-

tained nor were working hours controlled by the appellants.

There were, no rules as regards leave or holidays and they

were free to come out of the works after making arrangements

for manufacture of salt. On these facts, the Industrial

Tribunal found that the agarias were workmen ,within the

meaning of the Industrial Disputs Act 1947. This finding

was confirmed by the High Court which also held that the

reference of the dispute made by the Government under

Section 10 of the Industrial Disputes Act was competent.

This Court while confirming the finding of the Industrial

Tribunal and of the High Court, held that it was well-

settled that the prima facie test of the relationship of

master and servant was the existence of the right in the

employer not merely to direct what work was to be done but

also to control the manner in which it was to

296

be done, the nature and extent of such control varying in

different businesses and being by its very nature incapable

of being precisely defined. The correct approach is to

consider whether having regard to the nature of the work,

there is due control and supervision of the employer. A

person could be workman even though he did piece work and

was paid not per day but by the job, or employed his own

workmen and paid them for it. The Court noted the

observations of Somervell, LJ., in Cassidy v. Ministry of

Health [(1951) 1 T.L.R. 5391 which had taken the view that

it was not necessary for holding that a pep son was an

employee that the employer should be proved to have control

over his work. The test of control was not one of universal

application and there were many contracts in which the

master could not control the manner in which the work was

don, the correct approach would be to consider whether

having regard to the nature of the work, there was due

control and supervision by the employer. The Court quoted

the opinion of Fletcher Moulton, L.J, in Simmons v. Health

Laundry Company (1910) 1 K.B. 5431 where the learned Judge

has observed as follows:

"In my opinion it is impossible to lay down

any rule of law distinguishing the one from

the other. It is a question of fact to be

decided by all the circumstances of the case.

The greater the amount of direct control

exercised over the person rendering the

services by the person contracting for them

the stronger the grounds for holding it to be

a contract of service, and similarly the

greater the degree of independence of such

control the the probability that the services

rendered WV of the-nature of professional

services and that the contract is not one of

service."

16.The Court then observed that the broad distinction

between a workman and an independent contractor lies in this

that while the former agrees himself to work, the latter

agrees to get other persons to work. A person who himself

agrees to work and does so work and is, therefore a workman,

does not ceases to be such by reason merely of the fact that

he gets other persons also to work along with him and those

persons are under his control and arc paid by him. What

determines whether a person is a workman or an independent

contractor is whether lie has agreed to work personally or

not. If he has, then he is a workman and the fact that he

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gets the assistance from other persons would not at feet Ms

swum.

17.hi Basti Sugar Mills Ltd. v. Ron Ujagar and Others

[(1963) 2 SCR 838], the case of the appellant-employer was

that the work of the remove of the press mud had been given

by it to a contractor and the respondent-workmen were

employed by that contractor to do that work. It is the

contractor who had terminated their services and the

management had nothing to do with the workmen who had ap-

proached the Court for relief against the termination of

their services and also for paying them the minimum wages

prescribed under the Government notifications. This Court

held that the workmen were persons employed in the industry

to do manual work for reward. Further, the appellant-

Company was their employer as the workmen were employed by

the contractor with whom the company had contracted in the

course of conducting the industry for the execution by the

said contractor, of the work of removal of press mud which

is ordinarily part of the industry. The Court also held

that the expres-

297

sion "employed by the factory" which occurred in the

definition of 'workman' in the Standing Orders applicable to

the company, included every person who was employed to do

the work of the factory and was wide enough to include the

workmen employed by the contractor of the factory also.

18. In Saraspur Mills Co. -Ltd. v. Ramanlal Chimanlal &

Ors. [(1974) 3 SCC 66], the facts were that the appellant-

Company which was responsible for maintaining the canteen

under the provisions of Section 46 of the Factories Act and

the rules made thereunder, had entrusted the task of running

the canteen to a co-operative society. The society employed

the respondent-workmen in the canteen. The workmen filed an

application before the Labour Court under the Bombay In-

dustrial Relations Act, 1946 making a grievance that they

were not paid wages and dearness allowance in accordance

with the award of the Industrial Tribunal. In support of

their claim, the workmen alleged that they become workers of

the appellant who -was bound to pay images and dearness

allowance as per the award. Since the appellant was running

the canteen under an obligation to do so under the Factories

Act, the running of the canteen was ordinarily a part of the

undertaking although the appellant did not itself run the

canteen but handed over the premises to the co-operative

society to run it for the use and welfare of the company's

employees and to discharge its legal obligation. The

appellant had resisted the claim by contending that the

workmen had never been employed by it or by its agent or

contractor They were, in fact, employed by the co-operative

society which was in licensee. The Labour Court dismissed

the workers' claim. However, in appeal, the Industrial

Court allowed the claim by holding that the employees of the

co-operative society were the employees of the appellant.

This Court referred to the amended definition of 'employee'

and employer' in Sections 3 [13] and 3 [14] of the Bombay

Industrial Relations Act which read as follows.

"[13] 'employee' means any person (including

an apprentice) employed in any industry to any

skilled or unskilled manual, supervisory,

technical or clerical work for hire or reward

whether the terms of employment be express or

implied and includes-(a) a person employed in

the execution of any work in respect of which

the owner of an undertaking is an employer

within the meaning of sub-clause (e)of clause

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(14).

x x x x x x

(14) 'employer' includes-

x x x x x x

(e) Where the owner of any undertaking in the

course of or for the purpose of conducting the

undertaking entrusts he execution of the whole

or-any part of any work which is ordinarily a

part of the undertaking to any person

otherwise than as the servant or agent of the

owner, the owner of be undertaking"

19.The Court also referred to the definition of 'worker'

under the Factories Act, 1948. The Court then referred to

its earlier decision in Basti Sugar Mills Ltd. v. Ram Ujagar

and Others [(1963) 2 SCR 8381 and held that since under the

Factories Act, it was the duty of tic appellant to run and

maintain the canteen for use of its employees, the ratio of

the decision in Ahmedabad Mfg & Calico Printing Co.

298

Ltd. & Others v. Their Workmen (1953 II LLJ 647] would be

fully applicable in which the very same provisions of the

Act were considered and confirmed the finding of the

Industrial Court.

20. In Hussainbhai, Calicut v. The Alath Factory Thozhilali

Union, Kozhikode and Others [ (1978) 4 SCC 257], the facts

were that the petitioner was a factory owner manufacturing

ropes. A number of workers were engaged by him to make

ropes. According to the petitioner, they were hired by

contractors who had executed agreements with the petitioner

to get the work done. Out of the workmen engaged by the

contractor, 29 were denied employment. They raised an

industrial dispute which was referred by the State Govern-

ment to the Industrial Tribunal. The Tribunal upheld the

contention of the workmen that they were the employees of

the petitioner and directed their reinstatement. The award

of the Tribunal was upheld by the learned Single Judge of

the High Court as well as by the Division Bench in appeal.

This Court while dismissing the employer's petition at the

admission stage itself with an elaborate judgment, held that

the work done by the workmen was an integral part of the

industry. The raw material was supplied by the management

The factory premises as well as the equipment used belonged

to the management and even finished product was taken by the

management for its own trade. Defective articles were

directed to be rectified by the management. The workmen

were broadly under the control of the management On these

facts, the Court held that where a worker or a group of

workers labours to produce goods or services and these goods

or services are for the business of another, that other is

in fact, the employer. He has economic control over the

workers' subsistence, skill and continued employment. If he

for any reason, chokes of the workers are virtually laid

off. The presence of intermediate contractors with whom

alone the workers have immediate or direct relationship ex

contractu is of no consequence, when on lifting the veil or

looking at the conspectus of factors governing employment,

we discern the naked truth, though draped in different

perfect paper arrangement that the real employer is the

Management, not the immediate contractor. Myriad devices,

half-hidden in fold after fold of legal form depending on

the degree of concealment needed, die type of industry, the

local conditions and the like may be resorted to when labour

legislation casts welfare obligations on the real employer,

based on Articles 38, 39,42,43 and 43-A of the Constitution.

The Court must be astute to avoid the mischief and achieve

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the purpose of be law and not be misled by the maya of legal

appearances. If the livelihood of the workmen substantially

depends on labour rendered to produce goods and services for

the benefit and satisfaction of an enter prise, the absence

of direct relationship or the presence of dubious

intermediaries or to make-believe trappings of detachment

from the management cannot snap the real life-bond. The

liability cannot be shaken off. The Court, however, added

that if there is totaldissociation in fact between the

disowning management and the aggrieved workmen,the

employment is in substance and in real-life terms by

another. The management's adventitious connections cannot

ripen into real employment. On this reasoning, the Court

con firmed the finding of the High Court and dismissed the

petition.

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21.In Workmen of the Food Corporation of India v. Food

Corporation of India [(1985) 2 SCC 136], initially the work

of handling foodgrains at Siliguri depot of the respondent-

Corporation was entrusted by it to a contractor. The

contractor engaged handling-mazdoors for the purposes of the

work. The mazdoors received the wages from the contractor

as determined by him or as agreed between the contractor and

the workmen. From January 1973, pursuant to an agreement

between the Corporation and the workers working in the

Corporation's godown, the direct payment system to the

workmen was introduced in place of the existing contract

labour system. Under this system, the bills for the piece-

rate wages payable to the handling mazdoors were to be

prepared by the depot staff and the Sardar/Mondal was to

accept the payment after giving acquittance and signed bills

on their behalf and distribute the wages to the handling-

mazdoors. The bill with acquittance in the original would

remain with the Corporation. The Union of the workmen was

informed to advise local representative of the workmen to

submit the wage bill in time mentioning therein particulars

'per head outturn by name' till January 1975. This system

of payment man in vogue till January 1975 when the

Corporation superseding the direct payment system

reintroduced the contract labour system without giving any

notice to the affected workmen. Consequently, 464 workmen

attached to the Siliguri depot were treated as employed by

the contractor. An industrial dispute was raised by the

union against this action of the Corporation and a reference

was made to the Tribunal for adjudication. The Tribunal

justified the corporation's action and held that

reintroduction of the contractor system did not constitute

discontinuance of the services of the affected workmen.

The questions for determination were whether as a result of

the introduction of the direct payment system, the concerned

workmen had become direct workmen of the Corporation and

whether the reintroduction of the contractor system of

payment resulted in discontinuance of the services under the

Corporation for which notice under Section 9A of the

Industrial Disputes Act, 1947 was essential, The Court while

allowing the workmen's appeal held that the essential

condition for a person to be a workman within the meaning of

the Industrial Disputes Act is that he should be employed to

do the work in an industry, and there should be an em-

ployment of his by the employer and that there should be a

relationship of the employer and employee as between master

and servant. Where the contractor em ploys a workman to do

the work which he contracted with a third person to accom-

plish, the workmen of the contractor would without something

more become the workman of that third person. When the con-

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tractor system was in vogue, the contractor was being paid

in lump sum arrived at by multiplying the rate per bag to

total number of bags. Thus, the Corporation was solely

concerned with the number of bags handled by the contractor.

It was not a contract for supply of labour, but specifically

a contract for handling bags of foodgrains. Therefore, when

the contractor system was in vogue, the workmen employed by

the contractor were not workmen of the Corporation. But

introduction of the direct payment system, brought about a

basic qualitative change in the relationship between the

Corporation and the workmen engaged for handling foodgrains

in that on the disappearance of the intermediary contractor,

a direct relationship of

300

master and servant came into existence between the

Corporation and the workmen. It was obligatory on the

Corporation to arrange for handling the bags of foodgrains.

The workmen handled the foodgrains for the Corporation and

none else. For this service rendered, the Corporation

agreed to pay and paid wages at piece rate to each workman

whose name appeared in the register maintained for the

purpose as per the directions given by the District Manager.

If the pay packets were actually distributed by

Sardars/Mondals, they can be said to be doing clerical work

on behalf of the Corporation. Thus since the introduction

of the direct payment system, the workmen became the

workmen of the corporation and a direct master-servant

relationship came into existence. When workmen working

under an employer are told that they have ceased to be the

workmen of that employer and have become workmen of another

employer, viz., the contractor in this case, in legal

parlance such an act of the first employer constitutes

discharge, termination of service or retrenchment by

whatsoever name called, and a fresh employment by another

employer, viz., the contractor. If the termination of

service by the first employer is contrary to the well-

established legal position, the effect of the employment by

the second employer is wholly irrelevant. The introduction

of a contractor so as to bring about a cessation of contract

of employment between the workmen and the Corporation and a

fresh contract of employment between the workmen and the

contractor, if motivated to effect retrenchment, ex facie

the action is contrary to Section 25-F of the Industrial

Disputes Act. Viewed from either angle, the action of

reintroducing the contractor so as to displace the contract

of service between the Corporation and the workmen would be

illegal and invalid and ab initio void and such action would

not alter, change or have any effect on the status of die

affected workmen who had become workmen of the Corporation.

Even assuming that the scheme of the Food Corporation Act,

1964 permits the Corporation to engage a contractor, the Act

would not permit the Corporation, which is an

instrumentality of the State comprehended in the expression

'other authority' in Article 12, to act in a manner

thoroughly arbitrary by first keeping a contractor, removing

him and reinducting him without a semblance of consideration

for the fate of the workmen working for it for its benefit

or for some work connected with the functions of the

Corporation. By cancelling the direct payment system and

introducing the contractor, both the 'wages' and the 'mode

of payment' within the meaning of Item 1 of the Fourth

Schedule to the Industrial Disputes Act are being altered to

the disadvantage of the workmen. Therefore, a notice of

change under Section 9-A was a must before introducing the

change, otherwise it would be an illegal change which would

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attract penalty under Section 31 (2). Such an illegal

change would be wholly ineffective.

22. In M.M.R. Khan & Ors. v. Union of India & Ors. [(1 990)

Supp. SCC 191 J, the facts were that the canteens run by

different railway establishments were classified into three

categories, viz, [i] statutory canteens, i.e., canteens

required to be provided compulsorily in view of Section 46

of the Factories Act, 1948, [ii] nonstatutory recognised

canteens set up as a staff welfare measure with the prior

approval and recognition of the Railway Board as per the

procedure detailed in the

301

Railway Establishment Manual, and [iii] non-statutory non-

recognised canteens, i.e., those which were established

without the prior approval or recognition of the Railway

Board. The Government of India notification. dated 11th

December, 1979 had declared the employees of the depart-

mental canteens/tiffin rooms as holders of civil posts. The

Division Bench of the Calcutta High Court had directed the

Union of India to recognise the workers of the statutory

canteen at Kharagpur as employees of the Railway

administration under the Factories Act but had rejected the

workers' demand to pay salary and allowances to them as if

they were railway employees. The appeal preferred by the

Union of India against the said decision was disposed of by

this Court by its order of October 27, 1990 in the following

words:

"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. "

23.On December 4, 1984, a Division Bench of the Madras High

Court relying upon the aforesaid order of this Court held in

a case that canteen employees will have to be treated as

Railway employees for die purpose of the Factories Act in

view of the concessions made by the Railways before this

Court and also the concessions' made by the counsel

appearing for the Railways before the High Court. Against

this background, writ petitions under Article 32 and appeals

by. special leave were filed by the employees of all the

three types of railway canteens claiming that they should be

treated as railway employees and should be extended all

service conditions available to the railway employees.

While allowing the writ petition#, and the appeals of the

employees of the statutory canteens and of the non-statutory

recognised canteens, this Court held as follows:

"Since in terms of the Rules made by the State

Governments under Section 46 of the Factories

Act, it is obligatory on the railway

administration to provide a canteen, and the

statutory, canteens love been established

pursuant to the said provision, it must be

held that the canteens are incidental to or

connected with the manufacturing process or

the subject of the manufacturing process. The

provision of the canteens is demmed by the

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statute as a necessary concomitant of the

manufacturing activity. Even where the

employees are appointed by the staff

committee/cooperative society, their

appointment is made by the department through

the agency of the comnuttee/society as the

case may be. The statutory canteens have been

in existence at their respective places

continuously for a number of years. The

premises as well as the entire paraphernalia

for the canteens is provided by the railway

administration and belong to it. The

employees engaged in the canteens have also

been in service uninterruptedly for many

years. Their wages axe reimbursed in full by

the railway administration. 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

administration whether the agency is the staff

committee or the society. In the Establish-

302

ment Manual the legal responsibility for

runnig the canteen ultimately rests with the

railways, whatever the agency that may

intervene. The number and the category of the

staff engaged in the canteen is strictly

controlled by the administration.

x x x x x

No distinction can be made between the

employees of statutory canteens and those of

non-statutory canteens. The only difference

is that 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 Factories

Act while non-statutory canteens are required

to be established under paragraph 2831 of the

Railway Establishment Manual where the

strength of the staff is 100 or more. The

employees who otherwise do the same work and

work under the same conditions and under a

similar management cannot be treated

differently merely because the canteen happens

to 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. 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. The

"Administrative Instructions on Departmental

Canteens in Offices and Industrial

Establishments of the Government" are

applicable to both statutory and non-statutory

recognised canteens. The Instructions do not

make any difference between the two so far as

their applicability is concerned.

However, the employees of the nonstatutory

non-recognised canteens am not entitiled to

claim de status of the railway servants.

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These Canteens are run more or less on ad hoc

bask, the railway administration having no

control on their working. Neither is there a

record of these canteens nor of the

contractors who run them who keep on changing,

much less of the workers engaged in these

conteens. "

24. Accordingly, this Court held that the workers engaged

by the statutory canteens as well as those engaged in non-

statutory recognised canteens in the railway establishment

were railway employees and they were entitled to be treated

as such.

25. In All India Institute Employees' Association v. Union

of India [JT 1990 (1) S.C. 319] the writ petition was filed

in this Court by an Association of about 2000 employees

working in 500 different Railway institutes and clubs in

various parts of the country. Their grievance was that they

were not treated as railway employees. It was their case

that although the institutes and clubs in which they worked

were not statutory, they were on par -with the employees in

the statutory canteens run in the railway establishments

proper. It was further their case that the institutes and

clubs were set up to provide recreational facilities to the

railway employees and they were managed by committees

consisting of representatives of all the members of the

institutes/clubs elected periodically. The institutes/clubs

had about 10 categories of employees. The employees were

appointed by the committees and the salaries were paid out

of the contributions received from the members of the

respective institute/club and the grants-in-aid given by the

Railway Board to them. The committee of management was pre-

sided over by the President who was the concerned Railway

Divisional Manager or his nominee. The railway

administration

303

had the right to dissolve or to form the ad hoc committees

for running the institutes/ clubs. It was also the case of

the workmen that the Railway Board had always treated the

institutes/clubs as an integral part of the railways since

not only they received grants-in-aid but also other fa-

cilities from the Railway.-,. The Railway Establishment

Manual made a special provision for the institutes and clubs

and it stated that a railway institute should be looked upon

as a club provided by the railway, rent-free for the benefit

of its employees and, therefore, the railways should provide

everything which a landlord ordinarily would, and the

institute should pay for all that a tenant should usually be

liable to pay. The Manual stated that th railway

administration will bear [a] the first cost of the building

including the cost of electric installations- necessary

furniture, roads, fancies, tennis court and other play-

grounds and wherever possible, the garden was also to be

provided and [b] the cost of maintenance and alterations.

This Court distinguished the canteens run in the railway

establishments and the railway institutes and clubs by

pointing out the material difference between the two.

Firstly, the canteens were invariably a part of the

establishment concerned and they were run to render services

during the hours of work since the services by their very

nature were expected directly to assist the staff in dis-

charging their duties efficiently. The lack of canteen

facilities is ordinarily bound to hamper and interfere with

the normal working of the staff and affect their efficiency.

The Court also held that the canteen services are today

regarded as a part and parcel of every establishment so much

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so that they have been made statutorily mandatory under the

Factories Act in establishments governed by the said Act

where more than 250 workers are employed. The canteen

services are thus no longer looked upon as a mere welfare

activity but as an essential requirement where sizable

number of employed work and that is why the Railway

Establishment Manual made a provision for canteens even

where the Factories Act did not apply. However, the same

cannot be said of the institutes and clubs. Although the

Railway Establishment Manual makes provisions for them, the

provisions are of a materially different nature and pattern.

There is no provision either for subsidy or loan directly

from the funds of the railway administration. They have to

run on the membership fees and fixed grants received from

the Staff Benefit Fund which consists of receipts from the

forfeited provident fund and bonus and of fine. The grant

further is made to each institute/club at the rate of Rs.

14/- per capita of the non-gazetted staff employed at the

relevant railway establishment. Out of this contribution,

only Rs.4/ - per capita are spent on activities of the

institutes/clubs, the rest of the amount being spent on

education etc. The wages and allowances of die staff the

institutes/clubs are paid by the institutes/clubs themselves

and they arc not subsidised by the railway administration as

in the case of the statutory and non-statutory recognised

canteens. Further, by their very nature the services of the

institutes/clubs are availed of beyond working hours only

and not all the members of the railway staff avail of them.

One had to be a member by paying fees to do so. The member-

ship was further optional. That is why most of the staff

employed in the institutes/clubs was part-time. Out of

about 1741 employees engaged in 449 institutes and 332 clubs

nerely half were part-time employees. The sorvices rendered

by the

304

employees were also not of a uniform nature. They were

engaged for different services with service conditions

according to the requirement. The institutes/clubs also do

not engage in any uniform activities, the activities

conducted by them varying depending upon the infrastructure

and the facilities available at the respective places. What

is more important is that the provision of the

institutes/clubs is not mandatory. They are established as

a part of the welfare measure for the railway staff and the

kind of activities they conduct depend, among other things,

on the funds available to them, the activities having been

tailored to the budgets. If the cost of activities goes

beyond the means, they have to be curtailed. On these

facts, this Court held that the staff members employed by

the railway institutes/clubs are not the employees of the

Railways.

26. In Surendra Prasad Khugsal v. Chairman, MMT

Corporation of India Ltd. [JT 1993 (5) SC 80], the workers

employed in non-statutory recognised canteens in the

respondent-Corporation had approached this Court by a writ

petition under Article 32 of the Constitution, relying upon

the decision of this Court in M.M.R. Khan case [supra]. The

Court found that the said decision which had decided the

claim of the non-statutory recognised canteens was decided

on the facts of that case including the provisions of the

Railway Establishment Manual, the notifications and

circulars issued by the Railway Board from time to time and

other documents. On the other hand, there were disputed

facts in the case in hand which could not be resolved in a

writ petition under Article 32. The Court, therefore,

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referred the matter to the Industrial Tribunal for adjudica-

tion.

27. What emerges from the statute law, and the judicial

decisions is as follows:

[i] Where, as under the provision of the Factories Act, it

is statutorily obligatory on the employer to provide and

maintain canteen for the use of his employees, the canteen

becomes a part of the establishment and, therefore, the

workers employed in such canteen are the employees of the

management.

[ii] Where, although it is not statutorily obligatory to

provide a canteen, it is otherwise an obligation on the

employeer to provide a canteen, the canteen become a part of

the establishment and the workers working in the canteen,

the employees of the management. The obligation to provide

a canteen has to be distinguished from the obligation to

provide facilities to run canteen. The canteen run pursuant

to the latter obligation, does not become a part of the

establishment.

[iiij The obligation to provide canteen may be explicit or

implicit. Where the obligation is not explicitly accepted

by or cast upon the employer either by an agree ment or an

award etc., it may be inferred from the circumstances, and

the provision of the canteen may be held to have be, come a

part of the service conditions of the employe". Whether the

provision for canteen services has become a part of the of

service conditions or not is it question of fact to be

determined on the facts and circumstances in each case.

Where to provide canteen services has become a part of the

service conditions of the employees, the canteen becomes a

part of the establishment and the workers in such canteen

become the em-

305

ployees of the management.

[iv] Whether a particular facility or service has

become implicitly a part of the service conditions of the

employees or not, will depend, among others, on the nature

of the service/facility, the contribution the service in

question makes to the efficiency of the employees and the

establishment, whether the service is available as a matter

of right to all the employees in their capacity as employees

and nothing more, the number of employees employed in the

establishment and the number of employees who avail of the

service, the length of time for which the service has been

continuously available, the hours during which it is

available, the nature and character of management, the

interest taken by the employer in providing, maintaining,

supervising and controlling the service, the contribution

made by the management in the form of infrastructure and

funds for making the service available etc,

28. We may now examine the facts in the present case in the

light of the above tests.

29. There is no dispute that the respondent-Corporation has

not explicitly undertaken to provide canteen services to its

employees working in the offices in question. The only

obligation that it had explicitly accepted was to provide to

the employees facilities to run canteen, such as premises,

furniture, electricity, water etc. However, the facts on

record show that the Corporation had implicitly accepted the

obligation to provide canteen services and not merely the

facilities to run the canteen. These facts are:

[a] In para 6 of the counter-affidavit filed on behalf of

the Corporation before the learned Single Judge in the High

Court, it is stated that at the time the Corporation was

established, i.e., 1st September, 1956, all the Insurers

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carrying on life insurance business in India both inland and

foreign were merged and/or vested in the Corporation. Some

of the merged offices of the erstwhile Insurers had canteens

which were used to be run or managed by different employees'

unions. After the establishment of the Corporation, those

canteens continued to be run and managed by the particular

employees' unions. While being so run there were complaints

to the Corporation from the employees about the quality and

nature of food supplied as is evident from the letters of

several employees' unions written in or about 1972. Hence,

in or about 1973, the Corporation was obliged to appoint a

committee to examine the alleged complaints and to find out

ways and means as to how best such canteens could be run and

managed. The Committee made its recommendations and in

pursuance of the recommendations, the responsibility to run

and manage the canteens was entrusted to contractors obvi-

ously by the Corporation, though the counter has not stated

the latter fact in so marl, words. The contractors started

managing the canteens and this practice continued till 1979.

It is stated in the counter that one of the employees'

unions was the Life Insurance Corporation Employees'

Association [Calcutta Division] of which one Shri Sukumar

Mukherjee was the General Secretary and the said Mukherjee

is also the President of the Employees' Unions of the

appellants herein. Although it is also averred there that

the said Mukherjee who represented the appellants at all

material times also did not come out with a case that the

appellants were the

306

employees of any departmental canteens run or managed by the

Corporation and that it was for the first time that before

this Court in the writ petition filed under Article 32 of

the Constitution that the appellants had sought to make out

the purported case that they were the employees of the

departmental canteens belonging to and/or run and/or managed

by the Corporation, these facts are not relevant for the

purpose of examining whether, in fact the relationship of

employer and employee existed between the Corporation and

the appellants.

[b] The counter further goes on to say that in the

meanwhile, the workers working in the canteens started

agitating for higher emoluments and/or other benefits and as

such, the contractors abandoned their entrustment and the

facilities of canteen available to the employees suddenly

came to a stop. Thereafter, a cooperative society of the

employees of the Corporation known as LIC Employees Coopera-

tive Society Ltd., was formed and it started managing

canteens at different offices of the Corporation in Calcutta

w.e.f 1st September, 1979. While such management was

continuing, the workers in the canteens in or about 1981

started agitation for enhancement of their salary and other

benefits and submitted a charter of demands both to die said

cooperative society and to the Corporation. The dispute was

referred to the Assistant Labour Commissioner [(Ventral] and

in pursuance of a notice dated 15th April, 1982 issued by

the Assistant Labour Commissioner, a me was held at his

behest on 10th May, 1982 with a representative each of the

cantee workers' union and of the Corporation. The

employees' cooperative society, ever, did not participate in

the conciliation proccedings. By a notice dated 14th Au-

gust, 1982 the canteen workers notified that they would go

on strike if the demands were not met. Thereafter, the As-

sistant Labour Commissioner called the Zonal Manager of the

Eastern Zonal Office of the Corporation at Calcutta and oth-

ers concerned, for a discussion on 10th September, 1982.

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The canteen workers went on strike w.e.f 1st December, 1982

and the conciliation proceedings were held for the last time

on 15th December, 1982. As a result of the said strike, the

canteen facilities available to the employees of the

Corporation were again stopped. Thereupon, the LIC

Employees' Association complained against the stoppage of

the said facilities. Pursuant to the said complaint, the

Labour Commissioner [Central] took up the matter and issued

notice to the respective parties which of course included

the respondent-Corporation, for discussion. The central

office of the Corporation was also eager to make some

alternative arrangement for running the said canteen. The

discussions were held at the conciliation level and the

Conciliation Officer submitted his failure report. Cut 26th

March, 1983, the Corporation addressed a letter to the then

Zonal Labour Commissioner explaining the entire position.

The canteen workers continued their strike and the

Corporation had to find out some other alternative,

management with a view to continue the canteen service

rendered to the employees. The Corporation, therefore, by a

notice dated 14th March, 1983 called for appointment of

contractors to run the canteens and in pursuance thereof,

contractors were appointed -who in turn took over the

responsibility of the canteen workers who were till that

tine working in the canteens.

307

It is, however, the case of the Corporation in the counter

that in spite of the failure report submitted by the

Regional Tabour Commissioner [Calcutta], the dispute was not

referred for adjudication and the Central Government

accepted that the canteen workers were not the employees of

the Corporation but were the employees of the contractors as

is evident from letter dated 6th February, 1984 addressed by

the Central Government to the Zonal Manager, Eastern Zonal

Office of the Corporation.

It is also the case of the Corporation in the said counter

that the Corporation at no point of time exercised any cow

Vol over the contractors except those covered by the

contracts in writing between the contractors and the

Corporation.

From the aforesaid averments in the counter, the following

facts emerge. Even from times much prior to the coming into

existence of the respondent-Corporation, canteen services

were available to the employees of the insurance companies

which were later merged with the Corporation in 1956.

Between 1956 and 1971 the canteens were being managed by the

canteen committees. Between 1973 and 1979, they were

managed by the contractors appointed by the Corporation. In

1979, the management was taken over by the cooperative

society of the employees. In 1981, there was an industrial

dispute raised by the canteen workers both with the

cooperative society and the Corporation. In the concilia-

tion proceedings it is only the Corporation which

participated. From 1983 onwards, the canteens were again

managed by the contractors appointed by the Corporation with

written agreements with them. The Central Government's

letter dated 6th February, 1984 refusing reference of the

dispute for adjudication to the Industrial Tribunal makes it

clear that the demand raised by the canteen workers was both

for increase of wages and for their absorption in the

Corporation. Ile parties to the dispute included the Zonal

Manager, Eastern Zonal Office as well as Senior Divisional

Manager of the Corporation at Calcutta. In the letter the

Central Government while refusing to refer the dispute for

adjudication gave the reason that the canteen employees were

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reported to have been employed by the cooperative society

and not by the LIC and, therefore, there was no employcr-

employee relationship between the canteen employees and the

LIC. In other words, the Central Government had taken the

stand that the employees concerned were not the employees of

the contractors but of the employee's cooperative society.

Although this cannot be taken as the conclusive finding on

the issue, it has relevance of its own in the context of the

facts which have emerged in the matter of the employment of

the canteen workers.

[c] We have then a copy of the agreement dated 15th June,

1983 entered into between the Corporation and the contrac-

tor, and the Corporation has admitted that similar

agreements were entered into with the later contractors from

time to time. The contents of the specimen of the agreement

are revealing for our purpose. [i] The agreement is entered

into exclusively between the contractor and the Corporation

and there is no other party to the contract. The preamble

of the agreement begins as follows:"Whereas the Life

Insurance Corporation of India, Calcutta Divisional

Office....is desirous of running a canteen by a contractor

on approved terms and conditions at ... and whereas the said

contractor

308

has accepted the said terms as offered to him... It is

hereby declared and agreed a,% follows:". It is, therefore,

clear from the preamble itself that it is the Corporation

and not the employees of the Corporation or their union or

cooperative society which was desirous of running the

canteen and which had engaged the contractors; [ii] The

Corporation was desirous of running the canteen through a

contractor on the terms offered to him by the Corporation.

In other words, the contractor is only an agent of the

Corporation; [iii] Clause [1] of the agreement shows that

contract deals with quality of foodstuff, tea coffee and

other permissible drinks to the employees of the Corporation

and the contract will remain operative for a period of one

year only from the date of the contract; [iv] by clause [2],

the Corporation undertakes to provide to the contractor free

of cost, space, tables, chairs, fans, lights and water,

although the cost of fuel or gas charges were not to be

borne by the Corporation; [v] Clause [3] makes it clear that

the foodstuff was to be cooked and prepared inside the

premises of the canteen and no outside foodstuff except cold

drinks would be sold in the canteen. Clause [4] makes it

obligatory on the contractor to maintain regular supply of

quality food while clause [5] provides that the existing

price of the foodstuff, tea coffee etc. should be continued

for a period of about six months from the date of the

contract and revision will be considered thereafter or even

before by discussion with the canteen committee as well as

with the contractor, [vi] Clause [6] makes it clear that the

fittings, furniture and fixtures of the canteen shall belong

to the Corporation's concerned office and removal of the

above in any circumstances was impermissible; [vii] Clause

[8] states that the caution money is to be kept with the

Corporation as interest free deposit and the question of

revision or adjustment of such deposit will arise either at

the time of the termination of the contract or at any time

earlier should the Corporation decide in the event of any

loss or damage; [viii] Clause [9] is important in that it

states that it is the Divisional Office of the Corporation

which reserves the right to add to, alter or rescind the

terms and conditions of the contract and also to advise on

any mater connected with the canteen; [ix] Clause [1] then

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stipulates that the canteen shall not be kept open for

counter service but only floor service shall be allowed and

no employee shall be allowed to use the canteen except

during the lunch hours.

The aforesaid terms of the contract further make it clear

that the Corporation has the dominating say in dictating the

terms and conditions of the contract and that apart from the

fact that the Corporation alone is a party to the contract

and neither the Corporation's employees nor any cooperative

society of the employees, it is the Corporation which has

the right to continue or terminate the contract and also to

modify and dictate the new terms of the contract. This is

the state of affairs which has been continuing at least from

1983.

[d] It is also apparent from the history of the management

of the canteen that it was managed through different mecha-

nisms such as the canteen committee, cooperative society and

the contractor. During the major period from 1973 to 1979

and thereafter from 1983 onwards, the contractors have been

on the scene. Although, we do not have the specimen of the

contract that was entered into with the contractors from

1973 to 1979, even if it is

309

presumed that the contractors were appointed during that

period by the canteen committees, it is not disputed that

even these canteen committees were controlled by the

Corporation and were manned by the Corporation 's officers.

[e] What is further in the rejoinder filed by the appellants

before the Division Bench of the High Court it was

specifically averred in paragraph 6 thereof that the job

done by the canteen employees was of perennial nature and

was incidental to the running of the main business of the

Corporation. It was being done by the Corporation through

their intermediaries - sometimes by contractors, sometimes

by cooperative society and sometimes by canteen employees

themselves. The intermediaries came and went but the

employment of the workers under the Corporation remained

constant. These averments have not been denied by the

Corporation.

[f] In the writ petition filed by the appellants, further,

it was averred that the employees of the Corporation at all

its establishments, are provided with facilities of canteen

by the Corporation for more than a few decades and as such

the provision of canteen facilities was a condition of

service of the employees of the Corporation and that by

usage and custom the benefits of canteen facilities had

became the conditions of service and that the running of

the canteen was incidental to the running of the business

of the Corporation. This is not controverted specifically

by the Corporation in its reply filed before the Court.

[g] In addition, there are certain other facts which

indicate that it was the Corporation was taking interest in

not only managing the canteen but also in the constitution

of the committees for management of the canteens. The

appellants have produced a letter dated 14th -March, 1983

addressed by the Additional Zonal Manager of the Corporation

to the employees of the Corporation who were elected to the

canteen committee to inform them that they had been so

elected and hoping that their help and cooperation will

strengthen the committee in the discharge of its duties. If

the Corporation had nothing to do with the management and

the constitution of the committees and their election, there

was no reason for the said functionary to address such

letter to the elected members of the committee.The letter

shoos that even in organising and electing the canteen

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committees, the Corporation was playing its functional role.

[h] There is further a letter dated 22nd August, 1983

addressed by the very same functionary to one M/s. S.

Mistry in the matter of supply of three black-boards. The

letter shows that the quotations for the black-boards for

the canteen were invited by the Corporation and the order

for the supply of the same was also placed by it and the

bill was also to be paid by it.

30. In the face of the aforesaid facts, it is difficult to

support the findings of the Division Bench that [a] the

canteen is being run by a committee or cooperative society

of the staff members of the Corporation [b] the Corporation

only agreed to provide space to house the canteen and cer-

tain chairs and tables for the use of its staff members, [c]

an independent contractor has been appointed to run the

canteen [d] and since no letter of appointment has ever been

issued by the Corporation and no attendance register is

maintained and

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the salary of the canteen workers is being paid by the

independent contractor and not from the funds of the

Corporation, there is no employer and employee relationship

between the Corporation and the appellants.

31. The facts on record on the other hand, show in

unmistakable terms that canteen services have been provided

to the employees of the Corporation for a long time and it

is the Corporation which has been from time to time, taking

steps to provide the said services. The canteen committees,

the cooperative society of the employees and the contractors

have only been acting for and on behalf of the Corporation

as its agencies to provide the said services. The

Corporation has been taking active interest even irk

organising the canteen committees. It is further the Cor-

poration which has been appointing the contractors to run

the canteens and entering into agreements with them for the

purpose The terms of the contract further show that they are

in the nature of directions to the contractor about the

manner in which the canteen should be run and the canteen

services should be rendered to the employees. Both the

appointment of the contractor and the tenure of the contract

is as per the stipulations made by the Corporation in the

agreement. Even the prices of the items served, the place

where they should be cooked, the hours during which and the

place where they should served, are dictated by the

Corporation. The Corporation has also reserved the right to

modify the terms of the contract unilaterally and the

contractor has no say in the matter. Further, the record

shows that almost all the workers of the canteen like the

appellants have been working in the canteen continuously for

a long time what ever the mechanism employed by the

Corporation to supervise and control the working of the

canteen. Although the supervising and managing body of the

canteen has changed hands from time to time, the workers

have remained constant. This is apart from the fact that

the infrastructure for running the canteen, viz., the

promises, furniture, electricity, water etc. is supplied by

the Corporation to the managing agency for running the

canteen. Further, it cannot be disputed that the canteen

service is essential for the efficient working of the em-

ployees and of the offices of the Corporation, In fact, by

controlling the hours during which the counter and floor

service will he made available to the employees by the

canteen, the Corporation has also tied to avoid the waste of

time which would otherwise be the result if the employees

have to go outside the offices in search of such services.

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The service is available to all the employees in the pre-

mises of the office itself and continuously since inception

of the Corporation, as pointed out earlier, The employees of

the Corporation have all along been making the complaints

About the poor or in adequate service rendered by the

canteen to them, only to the Corporation and the Corporation

has been taking steps to remedy the defects in the canteen

service. Further, whenever there was a temporary breakdown

in the canteen service, on account of the agitation or of

strike by the canteen workers, it is the Corporation which

has been taking active interest in getting the dispute

resolved and the canteen workers have also looked upon the

Corporation as their real employer and joined it as a party

to the industrial dispute raised by them. In the

circumstances, we are of the view that the canteen has

become a part of the establishment of the Corporation. The

canteen committees,the

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cooperative society of the employees and the contractors

engaged from time to time are in reality the agencies of the

Corporation and am, on, a veil between the Corporation and

the canteen workers. We have., therefore, no hesitation in

coming to the conclusion that the canteen workers are in

fact the employees of the Corporation.

32. The next question is as to what relief the appellants

are entitled. As pointed out earlier, the appellants have

prayed for the relief of their absorption by the Corporation

as its regular employees and also for pay as is paid to the

other employees of the Corporation. In view of our finding

that the appellants who are the canteen workers in the four

offices of the Corporation in Calcutta are entitled to be

the employees of the Corporation, the appellants are

certainly entitled to the first relief they have claimed.

The question, however, is to what service conditions they

would be entitled, They have prayed for the minimum salary

paid to the employees of the Corporation which necessarily

means the minimum salary of the lowest paid employees of the

Corporation, i.e., of class IV employees. There would be no

difficulty in directing the payment to them of the minimum

of the salary paid to the Class IV employees of the

Corporation. However, there is distinction between the

present service conditions of the appellants and the other

Class IV employees of the Corporation. For example, the

appellants get free food, and free tea. Their hours of

service may also differ. There are also different

categories of canteen workers such as General Manager,

Canteen Managercum-Salesman, Kitchen Clerk, Canteen Clerk,

Halwai, Assistant Halwai, Cook Bearer, Wash-boy, Sweeper

etc. It is not possible for the Court to evaluate the work

done by each of the categories. Hence different service

conditions will have to be prescribed for the different

appellants. The Corporation may have, therefore, to

prescribe appropriate service conditions for the canteen

workers.

33. Pending the prescription of such service conditions,

the Corporation should pay to all the appellants the minimum

of the salary presently paid to its Class IV employees

taking into consideration and making allowance for the

special facilities, if any available to them and also their

special working conditions. In addition, the Corporation

should also give them the benefit of the other service

conditions available to its Class IV employees.

34. The question further is from which date the appellants

should be deemed to have become the employees of the

Corporation and should, therefore, be entitled to the

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minimum salary and ,he. other benefits. taking into

consideration the relevant facts and circumstances on

record, we are of the view that they should be deemed to

have become the regular employees of the Corporation from

the date of the filing of the writ petition before the High

Court and should, therefore, be paid the arrears of salary

and other monetary benefits, if any, from the said date

after adjusting the salary and monetary benefits that they

may have received. The years of continuous service put in

by them even prior to the aforesaid date as canteen workas

should, however be taken into account for the purpose of

calculating their retiral benefits.

35. We, however, make it clear that the above direction to

treat the appellants

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as the regular employees of the Corporation will be subject

to two conditions, viz, [a] that they were above the minimum

and below the maximum age limit and medically fit as per the

regulations of the Corporation on the date of the filing of

the writ petition and [b] that on the date of the filing of

the writ petition before the High Court, they had put in a

minimum of three years continuous service as canteen workers

in the canteens in question. For the purposes of

calculating the said three years qualifying service and the

retiral benefits, the service prior to the attainment of the

minimum qualifying age under the Corporation's regulations

shall be ignored.

36. The appeal is allowed in the above terms with no order

as to costs.

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