Indian Overseas Bank vs Indian Overseas Bank Staff Canteen Workers' Union and Another

These three writ petitions arise from a common question between the same parties.

Ale main relief sought for is to quash the Award of the second respondent dated May 27, 1994 whereby it declared that the workmen of the

Indian Overseas Bank Staff Canteen be treated as employees of the Bank and they be paid on par with Class IV staff.

The material facts which necessitated the filing of these writ petitions are as follows :

The Central Office of the Indian Overseas Bank at Madras has got canteen for its employees. As per Ex. M-1, on November 25, 1972, the -

Indian Overseas Bank, petitioner herein, acceded to the request of All India Overseas Bank Employees'' Union to float a society in the name of

''I.O.B. Staff Co-Operative Canteen''. As regards the terms and conditions, the Bank agreed to supply free of cost, premises, furniture, utensils,

electricity (other than fuel), upto a maximum of Rs. 500 per mensem to meet the cost of fuel against production of relative bills, and water supply.

It also informed the Union that it had issued notice to the contractor to vacate the canteen premises on December 30, 1972 and. wanted the Union

to open the canteen positively on January 2, 1973. As per Ex. M-2, the Indian Overseas Bank Staff Co-operative Canteen, under the signature of

its Chief Promoters, wrote to the petitioner/Bank that the canteen will be run by the Staff of the Bank under the name and style of ''Indian

Overseas Bank Staff Co-operative Canteen''. At that time the name was under registration. They wanted to start the canteen from January 2, 1973

and also requested the petitioner to make the available premises suitable for the same. The Union, as per letter dated April 23, 1988 (marked as

Ex. M-4 in the case) also informed the petitioner-Bank the names of the promoters under whose supervision the canteen is to run. From that date,

the canteen was being run by the employees till it was closed on April 26, 1990. The employees of the canteen, totalling 33 in number, raised a

dispute that though they are canteen workers, they should be treated as employees of the Bank.

The case of the petitioner is that none of these workmen were appointed by the Bank and they were not subject to the control of the petitioner.

They were neither recruited through the Banking Services Recruitment Board, the recruiting agency for Employment in Bank. They are also not

covered by any bipartite settlement and other conditions of service applicable to Bank employees. It is also said that there is no statutory obligation

on the part of the petitioner to run a canteen; except for giving subsidy, provisions and other facilities in the form of utensils, etc., the petitioner-

Bank has nothing to do with the@running of the canteen. It was purely the responsibility of the Local Implementation Committee appointed by the

Trade Union. Even in the matter of grant of bonus, it was the responsibility of the committee and not that of the Bank. It is alleged that the 1st

respondent-Union raised an Industrial Dispute demanding that staff of the canteen run by the Local Implementation Committee should be treated

as workmen of the Indian Overseas Bank, giving them the same status, pay and facilities as are available to other Class IV employees of the Bank.

The dispute was referred in November, 1990 by Central Government for adjudication by the 2nd respondent-Tribunal under Industrial Disputes

Act, 1947. The Tribunal numbered the dispute as I.D. No. 72 of 1990. The terms of reference are as follows :

Whether the demand of the workmen of the Indian Overseas Bank Staff Canteen represented by the Indian Overseas Bank Staff Canteen

Workers'' Union, Madras, for treating the staff of such canteens which are run by the Local Implementation Committee, as workmen of Indian

Overseas Bank for giving the same status, pay and facilities as are available to other Class IV employees of the Bank is justified ? If so, to what

relief the workmen concerned are entitled ?

In the meanwhile, the Employees'' Union which was running the canteen requested the Bank to raise the subsidy, by their letter dated April 10,

1989 (marked as Ex. M-5 before the Tribunal). The Union informed the petitioner that the canteen was being run on heavy loss and the Local

Implementation Committee had decided to close the canteen with effect from April 26, 1990. The 33 workmen employed in the canteen raised a

dispute demanding reinstatement in the service of the petitioner - Bankas a result of the closure of the Canteen by the Local Implementation

Committee. The dispute was referred for adjudication by order dated December 17, 1991, and the 2nd respondent-Tribunal numbered the same

as I.D. No. 83 of 1991. The point for reference reads as follows :

Whether the demand of the Indian Overseas Bank Staff Canteen Workers'' Union, Madras, for reinstatement of 33 canteen employees whose

names are given in the Annexure into the services of the Indian Overseas Bank, as a result of the closure of the canteen by the Local

Implementation Committee, is justified ? If so, to what relief, the workmen. are entitled to ?

Since the employees of the Union wanted a canteen, the Bank decided to let out canteen to a contractor, namely, Hotel Palimar. At that

juncture, the 1st respondent-Union filed a complaint under Sec.33A of the Industrial Disputes Act that the petitioner had arrangement with a third

party for running a canteen after the closure on April 26, 1990, and the canteen was expected to start by March 15, 1992. The allegation was that

if the petitioner was allowed to enter into a contract for running the canteen, the members of the Union who claimed permanent status in the Bank

will be aggrieved and their claim would be defeated. The complaint was taken on file by the second respondent as Complaint No.4 of 1992.

The Industrial Dispute Nos. 72 of 1990, 83 of 1991 and Complaint No. 4 of 1992 were all tried together and the second respondent passed

the impugned award whereby it declared that the members of the 1st respondent-Union, i.e., 33 canteen workmen were to he treated as Staff of

the bank, and also directed that they should be paid on a par with Class IV employees of the petitioner-Bank. It also directed for reinstatement of

the 33 canteen workers in the service of the petitioner. Complaint No. 4 of 1992 was also allowed. It is against the Common Award, these writ

petitions are filed to quash the Award passed by the second respondent.

In this connection, it is worthwhile to note the demands made by the 1st respondent-Union.

On November 27, 1989, the 1st respondent-Union wrote a letter (marked as Ex. W-1) to the Regional Labour Commissioner (Central),

Madras, stating that the canteen is owned and managed by the Indian Overseas Bank. It was also stated therein that the Bank provided

infrastructure facilities like gas, water, electricity, premises, utensils, etc. It was further stated that the day-to-day affairs were entrusted to the

employees of the Bank nominated by the recognised Union of the Bank. It is further stated in that letter that the Railway and other Nationalised

Banks including the State Bank of India were treating their canteen employees as their employees and were paying salary and other allowance as

applicable to the employees of their Institution in the respective cadre. But, since the Indian Overseas Bank denied the same, they wanted the

Commissioner to initiate conciliation proceedings and help them to secure their legitimate rights. On receipt of the demands, petitioner-Bank wrote

on December 28, 1989 a letter (marked as Ex. W-2) to the Assistant Labour Commissioner stating that the 33 workers were not the staff of the

Bank and they (Bank) had no control over those workmen. It was also mentioned in that letter that staff canteen was being managed by the All

India Overseas Bank Employees'' Union from January 2, 1973, and except for the fact that the Bank had provided premises, furniture, utenils,

etc.,it has nothing to do with the workers of the canteen. The Bank further said that in addition to the above, it provides a subsidy of Rs. 12.50 per

month towards the cost of food per month per employee working at Central Office, and that the subsidy was credited to Savings Bank Account in

the name and style of I.O.B. Staff Canteen operated by the promoters. It also said that there is no employer or employee relationship between

them, nor was there any industrial dispute.

For the said reply, a rejoinder was sent, evidenced by Ex. W-3 on February 28, 1990 whereby the first respondent reiterated its claim. It also

cited certain legal precedents, justifying its claim.

When conciliation proceedings failed the matter was referred, as stated above.

Before the second respondent on behalf of the workmen, one witness was examined, and on behalf of the petitioner, its Law Officer was

examined. On the side of the workmen, Exs. W-1 to W 18 were marked, and on the side of the petitioner Exs. M-1 to M-7 were marked. It is on

the basis of the above materials, the second respondent passed the above award.

In these writ petitions under Art.226 of the Constitution of India, this Court is only to consider whether the award calls for interference. The

jurisdiction under Art.226 of the Constitution is limited. It is not appellate jurisdiction; nor can it appreciate the evidence. Merely because a

different finding can be arrived at, it will not be a ground for interference under Art.226 of the Constitution. The question is, whether there was any

material before the second respondent to come to the conclusion reached by it. By considering the materials it should not be misunderstood that

this Court is to consider the sufficiency of evidence or appreciation of the evidence. If there is no evidence at all, the finding can be said as without

jurisdiction. There it is not the question of sufficiency of evidence. If on the available materials, such a finding cannot be arrived, the same can be

considered as perverse, in the sense that under no circumstances such a finding can be arrived at. This Court is also entitled to interfere if the

award is against settled principles of law. In short, this Court will be justified in interfering with the award which is based on no evidence or is such

that no one properly instructed in law could have given it the same being in the teeth of some statutory provision or in ignorance of binding

precedents.

For the said purpose alone, I have to consider what materials were placed before the second respondent.

I have already stated that the oral evidence consists of W.W.I and M.W.l. In the oral evidence let in on behalf of the workmen, the General

Secretary of the Union was examined. He said that the canteen was started in the year 1973. In his deposition, he has stated thus : The premises,

electricity, water, furniture and utensils were all given by the Bank at its expense and responsibility. A Committee nominated by the Bank supplied

the grains, Vegetables, etc. and the amount therefore was paid by the Bank. Some permanent employees of the Bank were members of the

Committee. The Bank used to finance in the nature of subsidy. There will be change in the Committee Members. If there is any deficiency in funds,

the Committee Members were not taking any personal responsibility. The Bank alone was supplying the necessary funds. The canteen workers

have not invested any funds. For the services rendered, they are getting their salary from 1973 onwards. He also said that only the staff of the

Bank were allowed to make use of the canteen. The canteen staff used to spend the entire time in the canteen. In the canteen, food is supplied at

much reduced rate. Food is supplied not only to staff of the Head Office of the Bank but also to many sections of the Bank situated in separate

buildings, and for this purpose, the Bank has provided cycle, tricycle and van also. The Bank is also providing funds for the purpose of getting

cooking gas, and the Committee is also treating the canteen workers as full-time employees, and they have no other employer, nor will there be

any time for them under any other employer. They demanded higher wages in parity with Class IV Employees of the Bank and, therefore,

Industrial Dispute No. 72 of 1990 was raised. Now the canteen has been closed without disclosing any reason, and I.D. No. 83 of 1991 has also

been raised. A contractor has now been appointed for distributing the food to the Bank staff, and the contractor is ""Hotel Palimar"". In his evidence

which was continued on November 25, 1992, he has stated further in chief that on November 27, 1989, as per Ex. W-1, a demand was made

claiming salary on par with Class IV employees, and Ex. W.2 is the reply by the Bank, for which a rejoinder has been given as per Ex. W-3. Exs.

W-4, 6, 7 and 8 were also marked through him. Ex. W-6 is the closure notice. The demand petition given by the Union is Ex. W-7. Conciliation

Failure Report is Ex. W-8. He also said that the canteen was opened through contractor. The Reports regarding that are Exs. W-12 and W-13.

Exs. W-14 and W-15 Provident Fund Formats were also marked through him. He has said that so in Ex. W-16 compliant, all the details of the

employees have been given. Photo copies of certain cheques issued by the Bank to the Committee Members subsequent to the closure were also

marked as Ex. W-18 series. In cross-exarnintion on December 24, 1992, the witness has said that from 1983 onwards, he had been working in

the canteen. Originally he was being paid wages every week. There was no appointment order issued to him. He was interviewed in the canteen.

He also said that he was not recruited either through the Banking Service Recruitment Board or Employment Exchange. The authorities of the

Bank did not appoint him. Balasubramaniam, Sekar and others are permanent employees of the Bank. They are members of the Managing

Committee. There is no direct control by the Bank over the canteen and the Committee alone has got the control. He was not given bonus like a

Bank employee. He pleaded ignorance regarding any talks between the Eployees'' Union and the Head Office of the Bank. He also pleaded

ignorance whether the Union was responsible for forming the canteen committee. He also pleaded that he did not know whether the Union

demanded enhancement of subsidy. He also denied the suggestion that the canteen employees are only under the control of the Employees Union.

He said that I.O.B. is his employer, and a suggestion to the contrary put to him was denied.

In the oral evidence, the Law Officer of the petitioner-Bank has said that till 1972 a contractor was running the canteen in question. He has

further stated thus : from January 1, 1973, employees'' Union ran the canteen. In reply to the Union''s letter, the Bank wrote Ex. M-1 permitting

the Union to run the canteen. The Union Officers selected some of the employees called Promoters, who in turn, ran the canteen. Exs. M-2 to M-

5 are correspondence between two sides as to the running of the canteen. Ex. M-6 is regarding the Account in the name of I.O.B. Staff canteen

operated by the Promoters. The Union voluntarily closed the canteen on April 26, 1990. Workers of the canteen were not employed by the Bank.

They are not Bank employees. Bank is not obliged under law to run any canteen. The Union alone is the employer of the canteen workers. The

Union was not a party-respondent to the Industrial Dispute. According to him. The Union cannot get any relief from the Bank because they were

never the Bank employees. During cross-examination on February 1, 1993, he has stated that in 1982 he joined the Bank Service as Law Officer,

that he has no personal knowledge about the facts of the case, and that he does not know the contents of Ex. M-1, letter from the President. He

has stated that the terms and conditions with which the Union must run the canteen are stated in Ex. M-1. He said that except Ex. M-1, he has not

produced any other document to show that a contractor was running the canteen. He pleaded ignorance as to who paid wages to the promoters of

the canteen. He has said that Bank staff cannot draw wage or salary from any fund other than Bank funds. He pleaded ignorance whether

Promoters who were Bank employees got any special remuneration for the running of the canteen. He has said that the Bank was paying only the

agreed subsidy and nothing more than that. He has further stated that the canteen is infant only for the staff of the Bank, and that the canteen will

remain closed on bank holidays. According to him, as seen from Ex. M-7, the canteen was closed by the promoters on April 26, 1990, that the

Bank came forward to wipe off the debt incurred by the union promoters by allotting money to the canteen''s account, as per Ex. W-18. He

denied the suggestion that all the moneys needed to run the canteen were completely borne by the respondent therein (Bank). He has said that the

procedure for recruitment of Bank staff does not apply to canteen employees. He pleaded ignorance whether the canteen workers were admitted

to Provident Fund Scheme. He said that the canteen workers were not the employees of the Bank. He denied the suggestion that the promoters

were appointed by the Management of the Bank.

The documentary evidence Ex. M-1 shows that the Bank agreed to provide the infrastructure for running the canteen free of cost. It also said

that the present Contractor who was running the canteen had been asked to close down, when the Employees'' Union started the same on January

1, 1993. Ex. M-2 is a letter written by the Promoters of the Indian Overseas Bank Staff Co-operative Canteen (which was under registration) with

affect from January 2, 1973, and further says that they intend to formally open the canteen on January 1, 1973, the day being an auspicious day. It

claimed certain facilities to be provided on or before January 2, 1973. Ex. M-3 is a letter dated April 24, 1974. It is a request by the Precedent of

the Employees Union to the Assistant General Manager of the Bank for subsidy of Rs. 2,000. He requests that the same may be, paid to the

canteen by means of a pay order in favour to the promoters of the canteen until further advice. Ex. M-4 is the information by the General Secretary

of the canteen about the change of names of the Promoters and also their specimen signature. Ex. M-5 is a letter dated April 10, 1989 whereby

the Union requested the Bank for enhancement of the subsidy. In that letter, it is stated : ""We are finding it extremely difficult to run the canteen at

this rate of subsidy and fuel reimbursement. We have raised the prices of various items twice from 1986"". In that letter, it is also stated that the

Management has not taken into account the number of members of staff who take food from the canteen attached to CCO Madras, the staff who

come for the clearing, the staff who come to Cathedral Currency Chest for remittance/withdrawal, staff who attend training at Staff Training

College etc. It also said that ever since the construction of the new building started, workers, technical personnel of the construction company are

also making use of the canteen. It is further stated therein that the wage bill of the employees (cooks, cashiers and suppliers) have gone from Rs.

9,415 in 1986 to Rs. 12,460 despite any increase in the strength, and that the canteen is also supplying uniforms to the suppliers to have a decent

outfit. The letter further says that the supply of various stationery items like paper, carbon, etc. had also been stopped. It also mentions that the

total fuel expenses for cooking gas and firewood incurred by the canteen runs to the tune of Rs. 8,000 whereas the Management reimburses only

Rs. 6,000. In view of the above, they request the Bank to enhance the subsidy from Rs. 12.50 to Rs. 20 per head taking the consumers strength at

least as 2,000 wet 1986. They wanted to consider the request on a ''crisis basis''. It was this demand that was rejected by the Bank and thereafter

a demand was made by the Employees as evidenced by Ex. W-1. Exs. W-1 to W-4 are only the demand and refusal, and the Report of failure of

conciliation. Ex. W-5 is an intimation by the promoters stating that the key of the canteen premises has been handed over to the Bank. Ex. W-6 is

the closure order by the promoters. Ex. W-7 is the letter of the Union to the conciliation officer regarding the closure of the canteen. Ex. W-8 is

the letter by the bank stating the reason for the closure. Ex. W-9 is the conciliation failure report. Exs. W-12 and W-13 are intimations by the

Bank that the canteen will function from October 21, 1992 and certain items of food will be provided by the canteen contractors. The timing if, of

the working of the Canteen is also stated therein. It also requests for the co-operation of all the Officers of the Bank for the smooth functioning of

the Bank. These are all the materials placed before the 2nd respondent to arrive at a to finding whether the canteen staff are employees of the

Bank.

I have extracted the evidence for one more purpose. The argument of learned counsel for the respondent is on the basis that canteen

employees of every establishment have to be considered as part of the establishment and they must be treated as other employees of the same. I

cannot agree with the said submission. In The Employees in relation to Punjab National Bank Vs. Ghulam Dastagir, , in paragraph 4 of the

judgment, a similar argument was put forward and the same was rejected. (I may have to deal with this decision once again later). But in applying

every principle, their Lordships cautioned the said approach thus : at p 314

.... It is quite conceivable that the facts in the case of employment of other drivers may be different."" If other materials are available regarding the

terms and conditions of service, regarding the direction and control of the drivers and regarding other indicia of employment, the conclusion may be

different. We cannot, therefore, dogmatise generally as to the nature of employment of the other driers under this Bank or other industry even

where features of allowance may be present. We mention this, because, as Lord Macmilan pointed out in the case we have already referred to,

facts vary from case to case. Evidence is shaped in each case and conclusions are reached on the basis of the facts and evidence of each case.

There is no invariable proposition where fluid facts are involved"".

So, their Lordships pointed out that everything depends upon the fluid facts that are involved in the particular case.

In the said decision, viz., The Employees 10 in relation to Punjab National Bank v. Ghulam Dastagr, (Supra), V. R. Krishna lyer, J., speaking

for the Bench, considered a similar question. To be a workman, certain guidelines were stated therein. Their Lordships accepted the principle

enunciated in Mersey Docks & Harbour Board v. Coggins & Griffith (Liverpool) Ltd., 1947 1 A.C. 1, wherein it was held thus :

Many factors have a bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is

employed, have all to be kept in mind. The expressions used in any individual case must always be considered in regard to the subject-matter

under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any

particular time, is to ask who is entitled to tell the employee the way in which he is to do the work upon which is engaged"".

In that case, the Area Manager of the Bank was given the liberty to appoint a driver. The Bank provided petrol, oil, maintenance, etc., and it also

gave a personal allowance to the Manager to enable him to employ a personal driver. The question was, whether the driver was a driver of the

Bank or the Manager. While considering the same, it was held thus :

... On the other hand, the evidence adduced before the Tribunal, oral and documentary, leads only to one conclusion that the Bank made available

a certain allowance to facilitate the Area Manager, Shri Sharma privately to engage a driver. Of course, the jeep which he was to drive, ''its petrol

and oil requirements and maintenance, all fell within the financial responsibility of the Bank. So far as the driver was concerned, his salary was paid

by Shri Sharma as his employer who drew the same granted to him by way of allowance from the Bank. There is nothing on record to make out a

nexus between the Bank and the driver. There is nothing on record to indicate that the control and direction of the driver vested in the Bank"".

In Pun Urban Co-operative Bank v. Mad-husudan Sahu , gold appraiser was engaged by the Bank to weigh the ornaments is brought for the

purpose of pledge and to appraise the quality, purity and value. The Bank was hang a list of approved appraisers and the appraisers were paid

commission depending upon the loan amount subject to a minimum of Rs. 2 per appraisal. The Bank was also not obliged to give work to the

appraisers and the Bank had no control over the manner in which the appraiser''s work had to be done. The question was whether the appraiser

was an employee of the Bank. While considering the same in paragraph 5 of the judgment, their Lordships said thus :

... It stands established that Industrial Law revolves on the axis of master and servant relationship and by a catena of precedents it stands

established that the prima facie test of relationship of master and servant is the existence of the right in the master to supervise and control the work

done by the servant (the measure of supervision and control apart) not only in the matter of directing what work the servant is to do, but also the

manner in which he shall do his work ...

Considering the control of the employer, their Lordships said that appraiser is not an employee of the Bank.

In the same volume i.e., T.N. Agricultural University Vs. Socialist Thozilalar Sangam, Coimbatore and Another, , a decision of this Court is

reported. The question was, whether the employees of a mess attached to the Tamil Nadu Agricultural University are staff members of the

University. There, the purchase & amenities committee consisting of students were supervising the mess. The warden, an employee of the

University, was in overall control of the mess. While considering the same, this Court held thus : atp.200

... No proof was forthcoming that any cooks, assistant cooks or cleaners were appointed by that purchase and amenities committee. It is also not

established that the committee had the power of superintendence and control in cluding disciplinary control over the said employees. It is proved

on evidence that the warden who was an employee of the University, was in overall control of the mess ...

There also, taking into consideration the control and power of superintendence over the staff, the question of employer and employee relation-ship

was determined.

A division Bench of this Court had occasion to Consider a similar question and the decision rendered thereon is reported in The Management

of Indian Bank Vs. The Presiding Officer, Industrial Tribunal (Central), Madras and M. Seethalakshmi Ammal, . The question in that case was,

whether Tiny Deposit Collectors of the Indian Bank can be considered as Bank staff. It also considered whether the appointment otherwise than

by Banking Service Recruitment Board or Employment Exchange has any relevance in considering the relationship. After discussing the entire law,

the Bench said that deposit mobilisation is one of the chief functions of the Bank and it is to augment the deposit, the Tiny Deposit Scheme has

been initiated by the Bank. While discussing the evidence, this Court held that the Tiny Deposit Collector is rally a Branch of the Bank, who goes

to the doorsteps of the customers and gets the collection. The Deposit Collector has to deposit the amount collected within 24 hours in a branch of

the Bank and the same has to be reported. Even for opening an Account, it can be done only in the presence of an authorised official of the Bank..

The Tiny Deposit Agent was engaged in the business of the Bank and the remuneration was paid in the nature of commission. In paragraph 9, this

Court held that since the Bank had sufficient control over the work of the Agent, the Agent is not an independent contractor, but part of the

organisation. Their Lordships also took into consideration the fact that whenever an agent was not in a position to collect the amount and wanted

to delegate the duty, the same can be done only with the permission of the Bank, and the Agent was also bound to do some clerical work.

Evidence in that case disclosed that the Tiny Deposit Agent was not a free Agent, but his activities were completely controlled by the Bank.

In Ahmedabad Mfg. and Calico Ptg. Co. Ltd. Vs. Ram Tahel Ramnand and Others, , the question that arose for consideration was, whether a

gardener employed in a textile mill can be treated as an employee and considered as part of the establishment. Their Lordships relied on the

decision reported in J. K. Cotton Spg. and Wvg. Mills Co. Ltd. v. Labour Appellate Tribunal of India, 1963 II LLJ 436 (SC), wherein their

Lordships said that while considering industrial adjudication cases, the approach, should not be narrow or one-sided or pedantic. It was held thus :

at p. 444 :

... The concept of social justice is not narrow, or one-sided, or pedantic, and is not confined to industrial adjudication alone. Its sweep is

comprehensive. It is founded on the basic ideal of socio-economic equality and its aim is to assist the removal of socio-economic disparities and

inequalities; nevertheless, in dealing with industrial matters, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions,

but adopts a realistic and pragmatic approach. It, therefore, endeavors to resolve the competing claims of employers and employees by finding a

solution which is just and fair to both parties with the object of establishing harmony between capital and labour, and good relationship. The

ultimate object of industrial adjudication is to help the growth and progress of national economy and it is with that ultimate object in view that

industrial disputes are settled by industrial adjudication on principles of fair play and justice. That is the reason why on several occasions, industrial

adjudication has occasions thought it fit to make reasonable provision for leave in respect of the workmen who may I not strictly fall within the

purview of the I Factories Act or the Shops and Commercial I Establishments Act ...

On that basis, their Lordships in Ahmedabad Manufacturing and Calico Ptg. Co. Ltd v. Ram Tahal Ramanand (Supra), remanded the matter

for fresh consideration without setting out any precedent.

In M.M.R. Khan and others etc. Vs. Union of India and others, etc., , their Lordships considered a case of employees in statutory and non-

statutory recognised Railway canteens and employees in non-statutory, nonrecognised canteens. In so far as the Statutory canteens are concerned,

their Lordships took the analogy of Sec. 46 of the Factories Act and said that it was a statutory obligation on the part of the Railways to provide a

canteen. Being a statutory obligation, wherever there is a canteen run by a contractor or a co-operative or other intermedary, that will not make

any difference. Their Lordships said that employees of the Statutory canteens run by the Railways form part of the establishment. In so far as non

statutory recognised Railway canteens are concerned, their 1 Lordships said that the Rules of the Railway Manual are similar to the running of

statutory canteens, except for the number of the emploees in the rolls and, therefore, all the employees of that canteen also form part of the

establishment. While considering the non-statutory non-recognised canteens, their Lordships said, that they cannot form part of the establishment.

While considering the statutory as well as non-statutory recognised canteens, their Lordships gave importance to the control of the Railway

Administration over the staff. It was held in that case that the entire running of the canteens including the work of the employees is subject to the

administrative control of the agency of the Railway administration, whether the agency is a staff committee or society. Their Lordships said, that the

legal responsibility for running the canteen ultimately rests with it, whatever be the agency that may intervene. The number category of the staff

engaged in the canteen are strictly controlled by the administration. It is further held that in respect of non-statutory recognised canteens, even

Recruitment Rules were framed by Railway administration, as regards minimum qualification, age, superannuation, and the Managing Committee of

the Railway Administration was the appointing authority. In respect of wages there were revisions from time to time by the Railway administration.

Even though the same has got something to do with the subsidy, importance was that even regarding payment, the Railway administration had

something to do with it. In paragraph 28 of the judgment, it was further pointed out that the Managing Committee was appointing the employees,

and was supervising and controlling the canteen. There also, their Lordships were taking into consideration the aspect of management and control

over the employees. But, while considering the case of non-statutory, non-recognised canteens, their Lordships said that there was no obligation

on the part of the Railways to provide any such canteen, and they are not governed by any Rules, and even the local officers of the Railway

Administration had no control over the canteen or its staff, as the canteen was run more or less, on an ad hoc basis. Their Lordships gave

importance to the fact that since there was no allegation on the part of the Railways to run such canteen, the staff employed therein cannot claim

that they are part of the establishment.

The entire law has now been discussed and considered in the latest decision of the Supreme Court in Parimal Chandra and Others Vs. Life

Insurance Corporation of India and Others, , their Lordships summarised the entire law thus at p 350 :

From the statute law and the case law, the following principles emerge :

(i) Canteens maintained under obligatory provisions of the Factories Act for the use of the employees become a part of the establishment and the

workers employed in such canteens are employees of the management.

(ii) Even if there is a non-statutory obligation to provide a canteen, the position is the same so as in the case of statutory canteens. However, if

there is a mere obligation to provide facilities to run a canteen, the canteen does not become part of the establishment.

(iii) The obligation to provide canteen may be explicit or implicit. Whether the provision for canteen services has become a part of the service

conditions or not, is a question of fact to be determined on the facts and circumstances in each case.

(iv) Whether a particular facility of 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

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.

In that case, Life Insurance Corporation of India questioned the status of workmen in the various canteens run in its premises in Calcutta. The

question was, whether the canteen workers were regular employees of the Corporation and if so, what should be the pay-scale and service

condition. While considering that question, their Lordships took into consideration the conduct of the Corporation to the outside world. From the

various documents produced before court, it was proved that the canteen staff were directly under the control of the Life Insurance Corporation.

Even the contractor under whom the employees work had to execute an agreement with the Corporation wherein various conditions of service are

also incorporated. The terms of contract provided directions to the contractor about the manner in which the canteen so should be run and how

service should be, rendered to the employees. Even the prices for the items served, the place where they should be kept, the handling of food

grains, place where they should be kept, were all dictated by the Corporation. The Corporation had the right to modify the terms and conditions

unilaterally and the Contractor had no say in the matter. Workers in the canteens were supervised by the Corporation. The appellants in that case

and other canteen workers had been working continuously for a long time. Whenever there was any complaint about the service of the staff, the

complaint was made to the Corporation and it used to give directions for rectifying the same. In those circumstances, after declaring the law, their

Lordships said that the canteen staff of the Life Insurance Corporation are part of the establishment.

In that case, their Lordships also held that what meant by ''control'' At pages 619 and 620 of the Reports, it was held thus :

... This Court white 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 be done. The nature and extent of such control varying in different businesses and being by its very nature in

capable 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 a 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, L.J., in Cassidy v. Ministry of Health, which had taken the

view that it was not necessary for holding that a person 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 done. 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 Flectcher Moulton, L.J., in Simmons v. Heath Landry Co., 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 service 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

greater the probability that the services rendered are of the nature of professional services and that the contract is not one of service.

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 work and is, therefore, a

workman, does not cease 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 are paid by him. What determines whether a person is a workman or an independent contractor is whether he has agreed to

work personally or not. If he has, then he is a workman and the fact that he gets the assistance from other persons would not affect his status.

While dealing with the entire case-law. In that case, it was clear that the Court was giving importance to some act of control by the

Management over the so-called workmen.

Now that I have discussed the Law, let us consider whether the materials as disclosed before the second respondent will create an employer

and employee relationship. The witness for the workmen has not spoken anything about the control which the Bank has over the canteen staff. He

only says that some infrastructure has been provided by the Bank for running the canteen in the nature of utensils, furniture, tricycle, van, provisions

and also the premises. From Ex. M-1, it is clear it was the Union who wanted the opening of a canteen and requested the Bank to provide

necessary infrastructure. The Bank agreed for the same. From this, it can be inferred that there was no obligation on the part of the Bank to

provide such facility. It is also clear from Ex. M-1 that till that date, the canteen was run by all independent contractor and he was asked to vacate

the premises by December 30, 1992. From Ex. M-2, it is seen that it was the Union who took the responsibility of running the canteen under a

separate name. At that time the name was under registration. The evidence disclosed that the promoters of the Managing Committee are selected

by the Union, and we do not have ally evidence in this case to show that the Bank had any say in choosing the members of committee. The same is

clear from Ex. M-4 wherein the Bank was informed about the change of personnel. The information was given by the General Secretary of the

Union. Such information was given only for the purpose of making entries in the records of the Bank and not for its approval. Ex. M-5 letter dated

May 10, 1989, according to me, is all admission on the part of the Union to show that it was running the canteen at a heavy loss, and it wanted the

Bank to help the Union in solving the crisis. The statement made therein is :

We are finding it extremely difficult to run the canteen at this rate of subsidy and fuel reimbursement. We have raised the prices of various items

twice from 1986"".

It is clear there from that even the prices of the food articles are fixed by the Union, or by the Managing Committee, and not by the Bank. The

further statement made therein is that while providing subsidy, the bank has not taken into account the number of staff taking food in the canteen. It

is also clear there from that not only the members of the staff, but also workers from the construction company, technical personnel, etc. were

making use of the canteen. It is not for the exclusive use of the Bank staff is admitted in Ex. M-5 Ultimately, the Union compares the subsidy

ordered by Indian Bank, and requests the petitioner-Bank to increase the subsidy. The letter makes it clear that the Bank was only helping the

Union in the running of the canteen, and it was never part of its Establishment. Probably to retain good relationship between the Union and the

Management, the Bank used to help it. But it should not be taken as duty bound on the part of the Bank to run a canteen. Ex. W-6 dated April 26,

1990 is also a letter written by the Union informing the Bank that due to heavy loss incurred by it, it has decided to close down the canteen. We

must know that Ex. W-6 was written by the staff members, after the dispute began. The decision to close down the canteen is from staff members

of the canteen and not from the Bank.

What is the control of the Bank over the staff members directly or remotely, is not stated by the witness. Documentary evidence also does not

disclose any such control. The Bank is not dictating the terms of employment, nor has it appointed any of the staff members. How the staff has to

work in the canteen is also not in any way controlled by the Management. Even the working hours are not dictated by it. It may be that the canteen

remained open during Banking hours, for the use of the staff members. But it is evident from Ex. M-5 that other persons were also making use of

the facility.

As held in Parimal Chandra Raha v. Life Insurance Corporation of India, (supra), their Lordships said that if there is a mere obligation to

provide facilities to run a canteen, the canteen does not form part of the establishment. It is true that in this case, their Lordships said that canteens

are invariably parts of the establishment concerned, and they were run to render service during hours of work since service by their very nature

were expected directly to assist the staff in discharging 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. According to me, the said observation by the Supreme Court should not be

read in isolation. If the Bank is discharging the same as a mere obligation, it permits to run a canteen and at the same time, it is not having any

control or right of supervision over the. staff the canteen will not form part of the establishment. In this connection, we must also take into

consideration whether the canteen service was available as a matter of right to all the employees in their capacity as employees and what was the

number of employees employed in the canteen and the exact number of persons employed in the canteen. There is no evidence regarding this.

Likewise, the nature and character of management, and the interest shown by the Management in having control and supervision over the running

of the canteen also has to be taken into consideration. The evidence is that the Bank has nothing to do with the working of the canteen. The only

contribution made by the Management is to provide infrastructure and also subsidy to the Union. If there is total lack of evidence on this point and

what the Bank discharged was only an obligation to provide a facility, under no stretch of imagination can it be said that the canteen staff is also

part of the establishment.

The second respondent, while passing the award, in paragraph 26, has stated that the infrastructure is provided by the Bank and the canteen is

meant for the exclusive use of the bank staff, and it is situated in the premises of the Bank. It is also said that wages for workmen are also paid only

from the funds provided by the Bank. It is also said that neither the Union nor the Managing Committee contributed for running the canteen.

Importance is given to these facts. According to me that is not the real state of affairs. What the Bank provided is only subsidy. It is for the

committee and not for the Bank to decide as to how it has to be utilised. That also shows that the Bank had nothing to do with the day-to-day

affairs or had any control or right of supervision over the working of the canteen. The committee is not liable to account to the Bank. Merely

because the debts incurred by the Committee had been discharged by the Bank, it does not create any employer or employee relationship. As

stated earlier, importance will have to be given to the control which the Bank had over the Bank staff. The tribunal has not entered any finding on

that point. If only the Labour Court had considered that question, it would not have entered such a finding. The Bank did not have even the

economic control over the workers'' subsistence, skill and continued employment, as was the case in Hussainbhai, Calicut Vs. The Alath Factory

Thezhilali Union, Kozhikode and Others, .

I have already said that I am not appreciating the evidence. I am only finding the legal consequences of the materials that were produced

before the Tribunal. On the basis of these materials, under no stretch of imagination, can it be said that the Bank had any control, either directly or

remotely, or any right of supervision in any sense, over the employees of the staff canteen. The Union or the Committee also cannot be treated as

its agent. The materials before the Court will not create an employer - employee relationship under any circumstance. That can be the only result of

the materials produced before the respondent. Any interpretation or any finding contra is according to me, is perverse.

The finding that the workers of the canteen are part of the Establishment is based on no evidence, and the finding rendered by the second

respondent is based on ignorance of binding precedents. According to me, no one properly instructed in law would have given such a finding. As

held in The Management of Indian Bank v. The presiding Officer, Industrial Tribunal (Central), Madras, (Supra), at paragraph 17, the finding of

the Tribunal can be interfered with if it is shown that it is fully unsupported by evidence.

In view of my finding that there is no employer and employee relationship between the parties, Writ Petition No. 21253 of 1994 is allowed by

quashing the award in I.D. No. 72 of 1990 dated May 27, 1994. Consequently, there cannot be any question of reinstatement of the 33 canteen

workers and also taking cognisance of the complaint under Sec. 33A of the Industrial Disputes Act. Therefore, W.P. Nos. 21251 and 21252 of

1994 are also allowed. There will be no order as to costs in all the writ petitions.