@JUDGMENTTAG-ORDER
Judgement Pronounced by Shivaraj Patil, J.@mdashThese cases are placed before us for disposal on reference made by a Division Bench of this
Court on 10.1.1996.
2. The question that came up for consideration before the Division Bench was, whether the canteen run in the second respondent factory, which is
statutorily obligatory, can be treated as part and parcel of the establishment of the management, or it can be treated as an independent entity, not
coming under the management, and thereby the workmen working therein not becoming the members of the establishment of the management.
3. A Division Bench of this Court, in Workmen Employed in the Canteen Run by S.R.F. Ltd., Madras v. Government of Tamil Nadu and others,
1995 (1) L.L.N. 487 took the view that the canteen is run by the contractor or a co-operative society; the employer in relation to the workers
engaged in the canteen will be the contractor or the society, as the case may be, and not the proprietor of the factory, and in such cases all the
claims of the canteen employees have to be met by the contractor or the co-operative society as the case may be; and the mere fact that the
S.R.F. company has the responsibility to provide and maintain a canteen for their workmen u/s 46 of the Factories Act, will not make them
automatically the employer of the canteen employees in all cases and for all purposes.
4. The Apex Court in Parimal Chandra Raha and others v. Life Insurance Corporation of India and others, 1995 Suppl. (2) S.C.C. 611 in para 25
has held that:-
What emerges from the statute law and the judicial decisions is as follows:- (i) Whereas under the provisions 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 employer to provide a canteen, the
canteen becomes 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.
(iii) 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 agreement or an award, etc. it may be inferred from the circumstances and the provision of the canteen may be held to have become a
part of the service conditions of the employees. 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.
Where to provide canteen service 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 employees 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 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 the controlling the
service, the contribution made by the management in the form of infrastructure and funds for making the service available etc..
5. Before the Division Bench, in this case, the learned counsel representing the workmen relying on the aforementioned decision of the Supreme
Court contended that the Division Bench of this Court in the case of S.R.F. Ltd., 1995 (1) L.L.N. 487 did not lay down the law correctly; on the
other hand the learned counsel appearing for the management argued that in the case of Parimal Chandra Raha, 1995 Suppl. (2) S.C.C. 611 the
Supreme Court has not taken into consideration the provisions contained in the Contract Labour (Regulation and Abolition) Act, 1970, and
therefore the said case does not govern the cases on hand.
6. The Division Bench apparently felt that the proposition laid down in the case of S.R.F. Limited did not square with the proposition made in
Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611. Hence the Division Bench of this Court by the order dated 10.1.1996 referred the
cases to Full Bench. Thereafter on the constitution of Full Bench by the honourable the Chief Justice, these cases have come up before us.
7. Briefly stated, the facts leading to the filing of W.P. No.193 of 1990 are the following:-
The petitioner is a registered Union represented by its General Secretary. In the writ petition it is prayed to issue a writ of declaration declaring the
17 canteen workers mentioned in paragraph 2 of the affidavit filed in support of the writ petition as workers of the Tamil Nadu Electricity Board,
and consequently direct the respondents 1 to 3 to treat them on par with other permanent employees of them, including the service conditions.
8. It is stated that these workers are working in the canteen of the third respondent under the contract of the fourth respondent; the third
respondent has a contract with fourth respondent to run the canteen. For the said purpose the first respondent supplies, vessels, brooms, tables
and chairs free of cost to the fourth respondent; the premises in which the canteen is run is part of the plant of the Board, and the building meant for
the purpose is given to the fourth respondent without any rent, and the electric supply to the canteen is also at the expense of the respondent
Board; even the fuel gas is supplied by the Board free of cost to the fourth respondent; and the cost of food items are subsidised by the Board.
9. The Thermal Power Plant at Ennore is a factory within the meaning of the Factories Act, and they are bound to maintain canteen for the workers
under the Act. Though for the purpose of running the canteen the respondents 1 to 3 have an arrangement with the fourth respondent, the workers
in the canteen are the workers of the Board. The inter-mediary i.e., the fourth respondent is merely a facade to deny the workers in the canteen, of
their legitimate due under the various labour legislations. It is also submitted that the respondent Board employs contract labour, far in excess of
what they are entitled under the Certificate of Registration issued u/s 7 of the Central Act 37 of 1970.
10. It is submitted that all the canteen workers are really the workers of the Board for the following reasons:-
(a) All the necessary ingredients for running of the canteen are supplied by the Board; (b) The canteen premises belong to the Board and is within
the plant; (c) The running of the canteen is integral to the main operation of the plant and caters to only the workers of the plant; (d) The quality of
the food is supervised by the respondent Board; (e) The food items are subsidised by the Board; (f) The plant being a factory is statutorily obliged
to run the canteen under the provisions of the Factories Act; and (g) If the Board were to terminate the services of the 4th respondent, the canteen
workers would be terminated.
Under the circumstances the writ petition is filed for the relief as stated above.
11. Briefly stated, the facts leading to the filing of Writ Appeal 425 of 1991 are the following:-
W.P. No.4896 of 1988 was filed by the very petitioner in W.P. No.193 of 1990 against the very respondents in the said writ petition, pleading the
cause of 19 similarly placed workers in the canteen, raising similar contentions.
12. The respondents 1 to 3 filed counter affidavit in W.P. No.4896 of 1988 contending that in Ennore Thermal Power Station, running a
vegetarian canteen is let on contract basis; the contract for running the canteen is awarded for a continuous period of not more than six months; the
contractor engages his own workers; the contract is awarded in limited tender system; the contract for the period from 1.10.1987 was awarded in
favour of the fourth respondent; the tenure of this contract expired on 31.3.1988; pending finalisation of fresh contract the contract period was
extended by a month till 30.4.1988; some of the workers engaged by the fourth respondent contractor in the canteen have approached the High
Court and filed writ petition and obtained interim injunction restraining the respondents from terminating the services of the canteen workers on the
expiry of the contract of the fourth respondent.
13. It is further submitted that a fresh contract has been awarded to one O. John. This contractor performs the contract by engaging the same
workers who worked under the fourth respondent; the workers mentioned in the writ petition are the workers of the fourth respondent; as per the
agreement, the workers of the fourth respondent are given free food; running of the canteen is not part of the plant. There is no agreement with
respondent No.4 to run the canteen as alleged. The building, tables, chairs, vessels, and all materials belong to the respondent Board including
supply of provisions. Fourth respondent is supplying labour by contract for a stipulated period, and all the inventories and tools and plants etc. at
Ennore Thermal Power Station canteen will be kept under his custody to avoid theft, damage, etc. The workers employed by the fourth
respondent are preparing food for 125 to 150 staff for lunch, preparing drinks for 750 to 900 staff, and preparing tiffin for 300 staff of the Power
Station.
14. It is further stated that the canteen is maintained under the supervision of the Canteen Committee, and under the direct supervision of Secretary
and joint Secretary; calling for tenders and fixing of lowest tender is being done by the Superintending Engineer; the workers mentioned by the
petitioner are attending to the work under the direct control of the contractor; the contractor has full discretion to engage the workers of his choice,
and the respondents 1 to 3 are not having any powers to insist the contractor to use the same old workers engaged by the previous contractor. It is
denied that all the workers in the canteen are the workers of the Board. In the counter affidavit some more details are given which are not
considered necessary for the purpose of disposal of these cases. Under the circumstances the respondent had prayed for dismissal of the writ
petition.
15. The said writ petition was dismissed by the learned single Judge on 19.3.1991. Aggrieved by the said order of the learned single Judge, the
petitioner in the Writ Petition No.4896 of 1988 has filed the Writ Appeal No.425of 1991.
16. Mr.V. Prakash, learned counsel for the appellant in Writ Appeal No.425 of 1991 and the petitioner in W.P. No.193 of 1990 representing the
interest of the workmen, submitted that the decision of the Apex Court in Parimal Chandra and Others Vs. Life Insurance Corporation of India
and Others, helps the case of the workmen, and in the light of the said decision the petitioners are entitled for the relief sought for; the respondent
Board has statutory obligation to provide Canteen facilities u/s 46 of the Factories Act, 1948 read with Rules 65 to 71 of Tamil Nadu Factory
Rules, and this being the position, it falls under clause (1) of Paragraph 25 in Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611; hence
the petitioners are the employees of the Board; although the effect of provisions of the Contract Labour (Regulation and Abolition) Act, 1970 (Act
37 of 1970), hereinafter referred to as the Contract Labour Act, was not expressly stated in Parimal Chandra Raha''s case, 1995 Suppl. (2)
S.C.C. 611 there was need to consider the effect of the same; even though the effect of the provisions of the Contract Labour Act was not
considered by the Apex Court in the said case, there being more than 250 workers in the respondent Board, Parimal Chandra Raha''s case, 1995
Suppl. (2) S.C.C. 611 governs the case of the petitioners; there is no conflict between the provisions of the Factories Act and the Contract Labour
Act, and even otherwise Section 119 of the Factories Act over-rides the provisions of Contract Labour Act; the principle of stare decis supports
the case of the workmen; by virtue of the interim order the workmen concerned in both the writ petitions are continuing in service and the canteen
is run by the canteen committee of the respondent Board for all these years; the decisions relied on by the respondent Board relate to non-
statutory canteens, and as such there is no need for the petitioners to go before the Labour Court; the respondents have stated before the Apex
Court in Contempt Application No.357 of 1993 that they are considering to absorb the workers in the canteen in the service of the Board.
17. Per contra, Shri K.V. Venkatapathy, learned Advocate General urged that the workers cannot seek declaration of their status or seek writ of
mandamus to abolish contract labours; if at all, the workmen are aggrieved, they can go before the Labour Court or Tribunal as the case may be,
and no relief can be granted in the writ petitions. He further submitted that the decision of the Supreme Court in Parimal Chandra Raha''s case,
1995 Suppl. (2) S.C.C. 611 should be taken as confined to the facts of that case; moreover the said case did not examine the issue with reference
to the contract Labour (Regulation and Abolition) Act, 1970; the statutory obligation to run the canteen is neither fixed nor permanent; and when
number of employees employed in a factory falls below 250, the statutory obligation also ceases. He also cited a few authorities in support of his
submissions.
18. We have considered the submissions made by the learned counsel for the parties.
19. It is not disputed that the respondent Board has statutory obligation to provide canteen facilities for the workers as per Section 46 of the
Factories Act, 1948 read with Rules 65 to 71 of the Tamil Nadu Factories Rules; the premises in which the canteen is run is part of the plant of the
Board, meant for the canteen purpose given to the contractor without any rent; the electric supply to the canteen is also at the expense of the
respondent Board; even the fuel gas is supplied by the Board free of cost; the cost of food items are subsidised; and quality of the food is
supervised by the respondent Board; and the tables, chairs, vessels, and all materials belong to the respondent Board. The workers employed in
the canteen prepare lunch, tiffin, etc. for the staff members and workers of the power station.
20. Providing and maintaining a canteen is a statutory obligation placed on the respondent Board which fact is not disputed. As a matter of fact
also the canteen is provided and maintained for long number of years, and the position continues to be so even today. The workers in the canteen
could not be treated as casual labourers as the services of workers were needed all along. It is also stated that the workers whose cause is
espoused in both the writ petitions have been working in the canteen for long number of years, except those who are not continuing.
21. In Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611 the facts were that the 42 workmen employed in the canteens at four different
offices of the Life Insurance Corporation of India had contended that they were the canteen workers of the respondent Corporation engaged in the
operation incidentally connected with the industry carried on by the respondents; they should be treated on par with the other employees; they also
stated that they being engaged in work incidentally connected with the industry carried on by the Corporation, they were entitled to get the pay that
was admissible to regular employees of the Corporation; the case of the respondent Corporation was that the canteens did not belong to it nor
they were run by it; the corporation only gave its employees the facilities to run the canteens; it has no connection, much less contract of
employment; nor did it have any control over their work, conditions of service, or termination of their service; therefore they were not the
employees of the Corporation; and they could not be deemed as employees of the Corporation.
22. Two questions that arose for consideration before the Apex Court were (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?
23. The Apex Court, having extracted Section 46 of the Factories Act, 1948, and referred to various decisions including the case of K.J. John,
Assistant Public Prosecutor, Grade-I, Palai Vs. The State of Kerala and others, in paragraphs 13 to 24 of the said judgment, has stated in
paragraph 25 the position that emerged from the Statute law and the judicial decisions, which are already extracted in paragraph 4 of this
judgment. Paragraph 29 of the same judgment of the Apex Court reads:-
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
Co-operative 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 in organising the canteen committees. It is further the Corporation 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 be 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, whatever 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 premises, 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 employees and of the offices of the Corporation. In fact, by controlling the hours during which the counter and floor
service will be made available to the employees by the canteen, the Corporation has also tried 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. The service is available to all the employees in the premises
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 inadequate 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 co-operative society of the employees and the contractors engaged from time to time are in reality the agencies of the Corporation
and are, only 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.
24. It is not disputed before us that the Ennore Thermal Power Station, the third respondent, is a factory within the meaning of Section 46 of the
Factories Act. The Tamil Nadu Factories Rules, 1950 are operating. It is not necessary for us to reproduce Rules 65 to 71 of the Rules. However,
these rules clearly show that the substantial control and supervision statutorily lies with the respondent Board, right from providing the premises to
fixing the prices of food-stuffs and other items in canteens, including providing proper dining hall, equipment, medical examination of canteen staff,
and the occupier appointing from among the persons nominated by him, a Chairman, of the Canteen Managing Committee, etc. Thus, it is
statutorily obligatory on the respondent Board to provide and maintain a canteen for the use of its employees, and the canteen becomes a part of
the establishment, and therefore the workers in the canteen are the employees of the respondent Board. In other words the case of the petitioners
is clearly and fully covered by sub- paragraph (i) of paragraph 25 of the Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611.
25. Added to this, in the light of the undisputed facts, it is clear that the canteen is run for the benefit of the employees and staff in the premises
belonging to the Board, giving all facilities required for running the canteen, and the services of the workers is required on permanent basis. Under
the circumstances the canteen in question being statutory, it must be held that they are incidental to or connected with the manufacturing process or
subject of the manufacturing process. In this regard, we consider, it is appropriate to extract paragraph 22 of the Parimal Chandra Raha''s case,
1995 Suppl. (2) S.C.C. 611 which reads:-
On 4.12.1984, 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 the 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 Railway 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 petitions
and the appeals of the employees of the statutory canteens and of the nonstatutory recognised canteens, this court held as follows: (S.C.C.
Headnote, pp.192-93)
''Since in terms of the Rules made by the State Governments u/s 46 of the Factories Act, it is obligatory on the railway administration to provide a
canteen, and the statutory canteens have 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 deemed by the statute as a
necessary concomitant of the manufacturing activity. Even where the employees are appointed by the staff committee/co-operative society, their
appointment is made by the department through the agency of the committee/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 are 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
establishment Manual the legal responsibility for running 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.
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 nonstatutory 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 then 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 Establishment of the Government'' are applicable to both statutory and nonstatutory 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 nonrecognised canteens are not entitled to claim the status of the railway servants. These canteens are
run more or less on ad hoc basis, the railway administration having no control on their working. Neither is there a record of these canteens non of
the contractors who run them who keep on changing, much less of the workers engaged in these canteens.''
Accordingly, this court held that the workers engaged by the statutory canteens as well as those engaged in nonstatutory recognised canteens in the
railway establishment were railway employees and they were entitled to be treated as such.
26. A division bench of this Court in The Canteen Employees rep. by The Secretary, Rodier Mills Canteen Employees Union, Pondicherry v. The
Management of M/s.Anglo French Textiles Ltd., and others, Writ Appeal No. 1092 of 1984 disposed of on 20.3.1990 in similar circumstances,
after referring to section 46 of the Factories Act which created a statutory obligation on the part of the management to maintain a canteen,
observed that though a contract was made to run the canteen, the canteen work was of permanent nature and that the employees in the canteen
could not be stamped as casual workers unconnected with the working of the Textile Mill. Paragraphs 10 and 11 of the said judgment read:
There can be no dispute at all on the point that the 19 employees of the canteen had been the workmen of the 1st respondent. The 2nd
respondent has considered this question at length and held that the 19 employees are workmen of the 1st respondent. Reference has been made to
Section 46 of the Factories Act which creates a statutory obligation on the part of the 1st respondent to maintain a canteen in the premises of the
textile mill and also the definition of ''industry'' under the Industrial Disputes Act and other relevant provisions and the Judgments of the Supreme
Court and High Courts and it has been held by the 2nd respondent that the 19 employees must be held as the workmen of the textile mill, though a
contractor was made to run the canteen. It has been observed that the canteen work is of a permanent nature and that the employees in the
canteen cannot be stamped as casual workers unconnected with the working of the textile mill.
11. The learned single Judge has also accepted the above view of the 2nd respondent as correct and has observed as follows:-
''In my considered view unaided by any authority the law should be stated as where there is a statutory obligation on the part of the mills to
maintain a private canteen u/s 46 of the Factories Act or at any rate to provide a canteen under the Pondicherry Factories Rules that liability cannot
cease by providing a canteen through the medium of a contractor or agency...... I am of the view that where the statutory provision imposed an
obligation to provide a canteen having regard to the language of the Pondicherry Factories Rules, 1964 that obligation can be discharged either by
the mill themselves providing a canteen or through an agency, namely contractor. By a provision of a canteen through an agency or a contractor,
the mill cannot turn round and say as well that what he has provided is what is required under law and no further liability arises. That will amount to
diluting a beneficial legislation like this.
27. The cause for referring this case to the Full Bench was that in Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611 the Supreme Court
had not taken into consideration the provisions contained in the Contract Labour (Regulation and Abolition) Act, 1970. The Division Bench in the
order of reference dated 10.1.1996, in paragraph 2 of the said order also expressed thus:-
Whatever it may be, apparently it looks that the proposition laid down in the workmen employed in the Canteen run by S.R.F. Ltd.,''s case, 1995
(1) L.L.N. 487 does not square with the proposition made in Parimal Chandra Raha''s case, and therefore, the correctness of the said decision
requires to be reconsidered, which is possible only by a larger Bench, as we being the Coordinate Bench cannot declare as not laying down the
law correctly and thereby overrule the decision of another co-ordinate bench.
28. In our view, not expressly referring to and considering the provisions of the Contract Labour Act in Parimal Chandra Raha''s case, 1995
Suppl. (2) S.C.C. 611 does not make any difference as to the ratio and the emerging position in law stated by the Apex Court in paragraph 25 (1)
with which we are concerned in this case, for the reasons more than one. The Apex Court having referred to various decisions in paragraphs 13 to
24 of the judgment, dealing with different types of canteens run by the contractors or co-operative societies, both in statutory and nonstatutory
canteens, in clear terms, without any rider or restriction so far it relates to the statutory canteens, has held that where it is statutorily obligatory
under the provisions of the Factories Act 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.
29. This being the position, there is no scope to go into the question as stated in the case of Workmen Employed in the canteen run by S.R.F. Ltd.,
v. Government of Tamil Nadu and others, 1995 (1) L.L.N. 487 whether there existed the employer employee relationship between the Proprietor
of the factory and the canteen employees is not a matter of presumption, but it is a question of fact which has to be decided in each case on the
facts and circumstances of such cases. Merely because a contractor brought the workers to work in a statutory canteen, that does not make the
employees as the workers of the contractor. The Contract Labour Act and the Factories Act have different objects and they serve different and
specific purposes. prima facie it appears to us, there is no conflict between the provisions of the Factories Act and the Contract Labour Act. Even
otherwise, Section 119 of the Factories Act takes care of the situation. The said Section reads:-
119. Act to have effect notwithstanding anything contained in Act 37 of 1970. The provisions of this Act shall have effect notwithstanding anything
inconsistent therewith contained in the Contract Labour (Regulation and Abolition) Act, 1970 (37 of 1970) or any other law for the time being in
force.
As can be seen from the aforementioned Section of the Factories Act, it has the over-riding effect, notwithstanding anything contained in the
Contract Labour Act, or any other law for the lime being in force. We may also notice that reference is specifically made to the Contract Labour
Act in section 119 of the Factories Act. Once a statutory canteen, as held by the Apex Court in Parimal Chandra Raha''s case,1995 Suppl. (2)
S.C.C. 611 becomes a part of the establishment, the workers employed in such canteen become employees of the management, notwithstanding
whether they were engaged by the contractor or were engaged by co-operative society.
30. Reading of the Apex Court Judgment in Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611 in its entirety, clearly shows that the
Supreme Court was fully aware as to the position of employees engaged by a contractor and the Labour Contract Act, 1970 was very much on
the statute book for several years, when the Apex Court rendered the Judgment. Merely because reference is not made to the provisions of the
Contract Labour Act expressly, that itself cannot be a ground to say that the position of law explained and the ratio of the decision has no
application to the facts of the case on hand.
31. The Supreme Court in Ballabhadas Mathurdas Lakhani and Others Vs. Municipal Committee, Malkapur, , has stated thus:-
The first question is concluded by the judgment of this Court in Bharat Kala Bhandar Ltd. Vs. Municipal Committee, Dhamangaon, . That case
arose under the C.P. and Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy u/s 66(1)(b) a tax on bales of
cotton ginned at the prescribed rate was challenged by a tax payer. This Court held that levy of tax on cotton ginned by the tax payer in excess of
the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the
rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a suit for refund of tax
in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not
ignore it because they thought that ''relevant provisions were not brought to the notice of the Court''.
32. The Supreme Court in Anil Kumar Neotia and Others Vs. Union of India (UOI) and Others, , has held that it was not open to the petitioner to
contend that certain points had not been urged and the effect of the Judgment could not be collaterally challenged. In the said paragraph, reference
is also made to the case of T. Govindaraja Mudaliar Vs. The State of Tamil Nadu and Others, .
In the light of what is stated above, the view expressed by the Division Bench of this Court in the Workmen Employed in the Canteen run by
S.R.F. Ltd.,''s case, 1995 (1) L.L.N. 487 not being consistent on the point, with the view expressed by the Apex Court in Parimal Chandra
Raha''s case, 1995 Suppl. (2) S.C.C. 611 we have no hesitation to hold that the Division Bench did not lay down the law correctly, and hence it is
over-ruled.
33. The decisions relied on by the learned Advocate General, in our view, do not help the respondent Board as those decisions are not directly on
the point dealing with the statutory canteen. On the facts of those cases, dealing with nonstatutory and nonrecognised canteens, the said decisions
were rendered.
34. We are not impressed by the argument of the learned Advocate General that the petitioners should go before the Labour Court or Tribunal for
the remedy, for two reasons, viz., (a) it may not be necessary for the petitioners to go to Labour Court or Tribunal as the case may be, as on
admitted facts it is found that they are working in a canteen which is statutorily obligatory on the part of the respondent Board to run. The position
would have been different where the disputed facts were to be examined in relation to nonstatutory or nonrecognised canteens falling in other
categories of paragraph 25 of the Judgment in Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611 other than clause (1); and (b) the writ
petitions have been pending since 1990. At this length of time it is unnecessary to drive the petitioners to Labour Court or Tribunal as the case may
be when there is an authoritative pronouncement of the Apex Court dealing with the controversy raised between the parties.
35. It is also brought to our notice that by virtue of the interim order granted in these cases, the workers are continuing to work in the canteens
even as on today, managed by the canteen committee.
36. After hearing the parties, we reserved the case for orders. During the course of dictation of the judgment, we came across with a copy of the
additional affidavit filed on behalf of the respondent Board before the Supreme Court in W.P. No.555 of 1990. In paragraph 6 of the said affidavit
it is stated thus:-
It is submitted that in G.O.Ms. No.2082, Labour and Employment Department dated 19.9.88, this Government issued orders abolishing contract
labour system in the processes of sweeping and scavenging wherever 50 or more such contract labourers are engaged. This is also applicable to
the Tamil Nadu Electricity Board. Apart from this, it is submitted that this Government is examining the recommendations of the sub-committee and
the question of abolition of contract labour in respect of eight other occupations in the additional affidavit of the petitioner, and that orders will be
issued u/s 10(1) of Contract Labour (Regulation and Abolition) Act, 1970 after a decision is taken in the following processes of work in the Tamil
Nadu Electricity Board:
(i) Service connection in the distribution side; (ii) Transportation of materials; (iii) Laying of lines cables (construction side), pit digging and pole
creation (in distribution side); (iv) Material stock yard in other areas than notified only for Mettur Work shop; (v) Loading and unloading of day-
to-day works; (vi) Canteen staff; (vii) Pole manufacturing and fabrication work including transportation (partially recommended); (viii) Other works
connected with refractory lining, insulation, lagging and sheet cladding; (ix) Cleaning and security.
37. Due to the passage of time after filing of the said additional affidavit in November, 1991, we felt that the State Government must have some
decision at this length of time, and if not, to know the stand of the Government, and also to explore the possibility of settlement, we directed the
office to post this case for further hearing. Accordingly the case came up on 30.3.1998, and we passed the following order:-
We heard the learned counsel for the appellant and the learned Advocate General for the respondents further as to whether the Board is in a
position to absorb the appellant employees in the light of the undertaking given to the Supreme Court in Central Organisation of Tamilnadu
Electricity Employees and another v. State of Tamil Nadu and others, W.P. No.555 of 1990. The learned counsel for the parties submitted that
these workers are not covered by the said undertaking given in the Supreme Court. However, the learned Advocate General submitted that the
appellant workers can be absorbed, as it is, their absorption is consistent to the policy of the Government, within a period of one year. Reacting to
the submission of the learned Advocate General, learned counsel for the petitioners submitted that one year is too long a period and a reasonable
period may be fixed. After some arguments, learned counsel for the parties submitted that the period of six months could be good enough for
absorption. They agreed to file a joint memo in this regard. To enable them to file a joint memo and dispose of the case, office is directed to list this
case on 31.3.1998 at 2.15 p.m.
38. On 31.3.1998 again the case was adjourned to 21.4.1998 on which date the learned Advocate General submitted that it was not possible for
the respondent Board to file a memo undertaking to absorb the employees of the canteen within a given time. Under the circumstances we
reserved the case for orders.
39. One more technical contention of the learned Advocate General representing the respondent Board that the relief of declaration as sought for
by the petitioners cannot be granted, is only to be noticed to say ''no'', inasmuch as the relief can be moulded and granted in appropriate cases, that
too exercising jurisdiction under Article 226 of the Constitution of India in order to do substantial justice, having regard to the facts and
circumstances of the case between the parties in view of the well-settled and consistent pronouncements of the Apex Court as well as various High
Courts, unless there is a prohibition or impediment in law.
40. In the result, for the reasons stated, the writ petition No.193 of 1990, and the Writ Appeal No.425 of 1991 are allowed, and we grant the
following reliefs, keeping in view the reliefs granted in Parimal Chandra Raha''s case, 1995 Suppl. (2) S.C.C. 611 of the Apex Court
aforementioned:-(i) The workers concerned in the writ petition as well as writ appeal working in the canteen, shall be deemed to have become the
regular employees of the respondent Board from the date of filing the writ petition, and they shall be paid the arrears of salary and other monetary
benefits if any from the said date after adjusting the salary and monetary benefits the workers have already received; (ii) The continuous service put
by them even prior to the aforesaid date as canteen workers should however be taken into account for the purpose of calculating their retirement
benefits; and (iii) It is also made clear that the above direction to treat the workers of the canteen as regular employees will be subject to two
conditions, viz., (a) that they were above the minimum, and below the maximum age limit prescribed, on the date of filing of the writ petition, and if
they are medically fit as per the regulations of the Board; (b) that from the date of filing of the writ petitions and also during the pendency of the
proceedings they had put in a minimum of three years continuous service as canteen workers in the canteen in question. For the purpose of
calculating the said three years qualifying service and retiral benefits, the service prior to the attainment of the minimum qualifying age under the
Board''s regulations will be ignored.
41. The Writ Appeal No.425 of 1991 is allowed and the order of the learned single Judge dated 19.3.1991 made in Writ Petition No.4896 of
1988 is set aside. Both the writ petitions viz., W.P. No.4896 of 1988 and 193 of 1990 are allowed in the above terms.
42. After we pronounced the order, the learned counsel for the petitioners submitted that time for compliance may be fixed. The learned counsel
representing the respondent Board states that time may be given up to 1.10.1988 without prejudice to the rights and contentions of the Board to
take up the matter to the Apex Court. In our view it is appropriate to grant time for compliance of our order, up to 1.10.1998. Ordered
accordingly.
