National Thermal Power Corporation Ltd vs Karri Pothuraju & Ors

The above appeal has been filed against the order dated 27.11.96 of a

Division Bench of the Andhra Pradesh High Court in Writ Appeal No.385 of 1996,

whereunder the Division Bench, while setting aside the order of the learned

Single Judge in Writ Petition No.3793 of 1992, allowed the claims in the writ

petition to the extent and subject to the conditions specified in the order. The

appellant, National Thermal Power Corporation Ltd., Ramagundam Super

Thermal Power Station, is a Public Sector Undertaking of the Government of

India. It started a canteen in the year 1983 for the benefit of the employees of

their unit, through a contractor and from that time onwards it was being run

through contractors engaged from time to time. The total number of employees,

at the relevant point of time, were said to be 2300 and about 54 persons were

said to have been working in the canteen in various capacities – cooks, servers,

cleaners etc. It is not in controversy that the appellant is a factory governed by

the provisions of the Factories Act and Section 46 of the said Act, 1948 casts a

mandatory duty and obligation on the appellant to provide and maintain a

canteen for the benefit of all those serving in the unit. Concedingly, the appellant

grants substantial subsidy and at one point of time, as found noticed in the order,

it was to the tune of Rs.1,95,000/-. The respondents, at least many of them,

were said to be working from the year 1983, though engaged by contractors.

The Deputy Manager – Administration and his subordinates were said to

supervise the working of the canteen in respect of preparation, service and

maintenance, to ensure quality of service as well as that it was carried on

beneficially to the workers. It is also claimed that the said authority issued

identity cards also to the workers for entering the factory premises. Apparently,

taking advantage of certain decisions of courts, including this Court, the

respondent-workers moved the High Court by means of the Writ Petition filed

under Article 226 of the Constitution of India seeking for a direction to the

appellant to regularize their services with attendant benefits.

Appellants disputed the claim, contending that the canteen was run as a

beneficial measure, to cater to the needs of workers in the unit, that contractors

used to be engaged periodically – at times different contractors for different

period, depending upon the successful offer made pursuant to invitation of

tenders, that they have nothing to do with the total strength of workers engaged

by such contractors, that they are neither workers relating to the manufacturing

activities of the appellant-Undertaking or they perform any work incidental thereto

or by any means could claim to be workers of the appellant within the meaning of

the Industrial Disputes Act, 1947. The control, if at all, was said to be to ensure

that there is no industrial unrest on account of the manner of running the canteen

and proper food articles are made available hygienically and at the rates

stipulated without sacrificing the quality of the food stuffs, eatables and

beverages and such supervision cannot make them workers under the control of

the appellant and that the relationship of Master and Servant and disciplinary

control over them was also with their employer–contractor, at all times.

The learned Single Judge was not prepared to accept the claim of the

workers and was of the view that the workers in the canteens run by Railways

and LIC stand on a different footing and there can be no comparison of the

workers in the canteen under consideration with those in the other institutions.

The writ petition, therefore, came to be dismissed and the workers were

constrained to file an appeal. The Division Bench, while allowing the appeal,

made the same subject to the following directions:

"Learned counsel for the first respondent has, however, urged before us

that while affirming the judgment of the Bombay High Court as above, the

Supreme Court has given some directions and in the instant case for the

obvious reasons of the existence of the canteen in the hands of the

contractors ever since the establishment of the canteen, the Court should

issue similar directions as issued by the Supreme Court in the said case.

While we do not have much information as to the type of the employees

the canteen is having and whether there are any employees in the

canteen who do not qualify within the minimum and the maximum age

limits prescribed under the policy of the first respondent or that they do

not fit in the minimum medical standards of minimum service period, it is

not possible, therefore, to specify, in the same terms as the Supreme

Court has done, in the instant case, but to observe generally that a

person who has crossed the age limit or a person who is below the age of

employment can obviously be not regularized or treated as employee of

first respondent. Similarly, a person who is not medically fit cannot claim

employment and if has so worked alright, but cannot by virtue of such

employment claim the benefits of the employees of the first respondent.

It would be advisable in such circumstances that the first respondent

corrects its mistakes and allows the cases of all the employees and treats

all those who are not unfit to continue in the employment of first

respondent as its employees."

Hence, this appeal.

The learned Senior Counsel appearing on behalf of the appellant placed

strong reliance upon the decisions reported in Indian Petrochemicals

Corporation Ltd. & Another vs. Shramik Sena & Others [(1999) 6 SCC 439]

and other related decisions to contend that the Division Bench went wrong in

reversing the decision of the learned Single Judge and that the respondent-

workers, who are indisputedly the workers in the canteen engaged by the

contractor, cannot claim to be part of the appellants establishment and claim for

regularisation in the services of the appellant-Undertaking and consequently the

order under challenge is liable to be set aside. Per contra, learned Senior

Counsel appearing for the respondent-workers placed reliance upon the

decisions reported in Indian Overseas Bank vs. I.O.B. Staff Canteen Workers'

Union & Another [(2000) 4 SCC 245] as well as Steel Authority of India Ltd. &

Others vs. National Union Waterfront Workers & Others [(2001) 7 SCC 1] and

in VST Industries Ltd. vs. VST Industries Workers' Union & Another [(2001)

1 SCC 298] to contend that the decision of the Division Bench does not require

any interference in this appeal. Reliance was also placed on an earlier decision

of this Court in The Saraspur Mills Co. Ltd. vs. Ramanlal Chimanlal & Others

[(1974) 3 SCC 66] for sustaining the decision of the High Court under-challenge.

We have carefully considered the submissions of the learned counsel

appearing on either side. In (1974) 3 SCC 66 (supra), this Court held that where

there is a statutory liability on the company concerned to run a canteen in the

factory, then even though the canteen was run by a Co-operative Society, the

employees working in the canteen would be covered by the definition of the word

"employed" envisaged in Section 3(13) of the Bombay Industrial Relations Act.

In (2001) 1 SCC 298 (supra) dealing with the claim of workers of a canteen run

through a private contractor in pursuance of the obligation of the industrial

establishment under Section 46 of the Factories Act, 1948, this Court upheld the

claim of workers for being treated as the workers of the company itself. In (2001)

7 SCC 1 (supra), a Constitution Bench of this Court considered the claims of

contract labourers engaged by a contractor for absorption in the establishment of

the principal employer on issuance of the abolition notification under the

provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the

rules made thereunder. This Court, while adverting to the position of law in force,

has observed as follows:

"106. We have gone through the decisions of this Court in VST Industries

case, G.B. Pant University case and M. Aslam case. All of them relate to

statutory liability to maintain the canteen by the principal employer in the

factory/establishment. That is why in those cases, as in Saraspur Mills

case the contract labour working in the canteen were treated as workers

of the principal employer. These cases stand on a different footing and it

is not possible to deduce from them the broad principle of law that on the

contract labour system being abolished under sub-section (1) of Section

10 of the CLRA Act the contract labour working in the establishment of

the principal employer have to be absorbed as regular employees of the

establishment.

107. An analysis of the cases, discussed above, shows that they fall in

three classes: (i) where contract labour is engaged in or in connection

with the work of an establishment and employment of contract labour is

prohibited either because the industrial adjudicator/court ordered abolition

of contract labour or because the appropriate Government issued

notification under Section 10(1) of the CLRA Act, no automatic absorption

of the contract labour working in the establishment was ordered; (ii)

where the contract was found to be a sham and nominal, rather a

camouflage, in which case the contract labour working in the

establishment of the principal employer were held, in fact and in reality,

the employees of the principal employer himself. Indeed, such cases do

not relate to abolition of contract labour but present instances wherein the

Court pierced the veil and declared the correct position as a fact at the

stage after employment of contract labour stood prohibited; (iii) where in

discharge of a statutory obligation of maintaining a canteen in an

establishment the principal employer availed the services of a contractor

the courts have held that the contract labour would indeed be the

employees of the principal employer."

Consequently, we consider it to be too late in the day for the appellant,

which had an obligation under the Factories Act, 1948 to run the canteen to

contend to the contrary. So far as the case on hand is concerned, the Division

Bench has chosen to leave liberty to the appellant to consider the claims of the

workers as to whether they satisfy the requirements and whether they are

otherwise unfit for confirmations. In the light of all these, we are unable to

countenance the challenge to the decision of the High Court, as either legitimate

or valid one. The appeal, therefore, fails and shall stand dismissed. No costs.