* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision : 25.03.2009
+ LPA No.1836-96 of 2006
BADARPUR POWER ENGINEERS &
WORKERS UNION AND ORS. ...APPELLANTS
Through: Ms. Richa Kapoor, Advocate.
Versus
THE GENERAL MANAGER,
BADARPUR THERMAL POWER STATION & ORS. ...RESPONDENTS
Through: Mr. Raj Birbal, Sr. Advocate with
Ms. Raavi Birbal &
Ms. Pinki Talukdar, Advocates
for Respondents 1 & 2.
Mr. Amit Khemka &
Mr. Sanjay Rohtgi, Advocates
for Respondent No.3.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA
1. Whether the Reporters of local papers
may be allowed to see the judgment? No
2. To be referred to Reporter or not? No
3. Whether the judgment should be
reported in the Digest? No
SANJAY KISHAN KAUL, J. (Oral)
1. The appellant Union and its workers filed a Civil Writ
Petition in this Court bearing No.610/1995 against
respondents 1 & 2 herein alleging that they were the
canteen workers of the canteen of respondents 1 & 2
located at Badarpur. It is alleged that the canteen was run
through its contractors for twenty (20) years and though
the contractors used to change, the workers in the canteen
LPA No.1836-96 of 2006 Page 1 of 11
remained the same. Approximately 60 workers are stated
to have put in service in the canteen for various posts such
as cook, canteen boy, cash clerk, etc. and the service
period is alleged to be from 6 to 15 years. The appellants
alleged that the wages were being paid by the respondents
and even provident fund was being deducted from the year
1990. The appellants alleged that on 14.2.1995 they came
to know that their services were going to be terminated and
on 16.2.1995 they were prevented from entering the
premises. The appellants claimed that their termination is
illegal and invalid, their retrenchment was in violation of
the provisions of Section 25-B of the Industrial Disputes Act,
1947 (hereinafter referred to as the ID Act) and that they
have put in continuous service ranging from 6 to 15 years.
On these allegations the appellants filed the writ petition
seeking restraint against the respondents from terminating
their services or interfering in the functioning of the
appellants with the prayer to regularize their services. The
appellants have also prayed for giving details of the
accounts of deductions made on account of provident fund
and for directions to the Regional Provident Fund
Commissioner (for short ‘RPFC’) to initiate penal action
against respondents 1 & 2, respondent No.3 being the
RPFC.
2. Respondents 1 & 2 resisted the writ petition alleging that
the appellants were contract workers who were engaged by
the contractor. It is pleaded that there can be no
regularization in such a case and there was no relationship
LPA No.1836-96 of 2006 Page 2 of 11
of employer and employee. The counter affidavit stated
that the wages were being paid by the contractor and the
contractor had not even been made a party to the
proceedings. It is further pleaded that the contractor was
given a license under the Contract Labour (Regulation &
Abolition) Act, 1970 (hereinafter referred to as the Contract
Labour Act). It is, thus, pleaded that the liability of
respondents 1 & 2 as principal employer would only arise in
case the contractor failed to pay wages of the appellants.
The writ petition is alleged to be raising disputed questions
of fact.
3. Respondents 1 & 2 admitted that the provident fund was
being deducted but by the contractor and there was some
dispute about the allocation of the Provident Fund Code
Number. The Indian Coffee House is stated to have taken
over the running of the canteen and had brought in its own
employees to run the canteen.
4. The RPFC took a stand that the liability for the provident
fund was of the principal employer being respondents 1 &
2.
5. The writ petition was decided vide impugned order dated
1.8.2006. The learned single Judge of this Court relied upon
the pronouncement of the Supreme Court in National
Thermal Power Corporation Ltd. Vs. Karri Pothuraju & Ors.
AIR 2003 SC 3647 where it was observed that in cases
where there was a statutory liability on the company
concerned to run a canteen in the factory, the employees
working in the canteen would be covered by the definition
LPA No.1836-96 of 2006 Page 3 of 11
of the word “employee” as per the obligations of an
industrial establishment under the Factories Act, 1948
(hereinafter referred to as the Factories Act). In such
situations the contract labour working in the canteen was
treated as the workers of the principal employer. The
learned single Judge, thus, observed that since there was a
statutory obligation to run the canteen, the establishment
of a relationship of employees-employer between the
appellants and respondents 1 & 2 was established. It was,
however, simultaneously noted that these appellants were
no more working with respondents 1 & 2 as their services
had been terminated and thus they could raise an industrial
dispute in terms of Section 2 (k) of the ID Act which would
be liable to be referred under Section 10 of the ID Act to the
Industrial Tribunal if the termination of the appellants was
illegal and unjustified. It was held that the Court while
exercising writ jurisdiction under Article 226 of the
Constitution of India could not entertain disputed questions
of fact. Since the workers were not working with the
respondent establishment, it was held that the Court
cannot direct regularization of contract workers and in any
case such a direction could not be made merely because
they were held to be covered under the definition of
“employee”.
6. Insofar as the aspect of deduction of provident fund is
concerned it was noticed that respondent No.3 had held
proceedings under Section 7A of the Employees Provident
Fund and Miscellaneous Provisions Act, 1952 (hereinafter
LPA No.1836-96 of 2006 Page 4 of 11
referred to as the EPF Act) against respondents 1 & 2
establishment and vide order dated 6.8.2004 determined a
sum of Rs.12,75,238.00 as due in respect of canteen
workers for the period January 1978 to December 1994.
After adjusting a sum of Rs.5,20,878.00 already paid by
respondent establishment, the balance amount of
Rs.7,54,360.00 was paid by respondent establishment to
respondent No.3 on 15.9.2004.
7. We have heard learned counsels for the parties.
8. Learned counsel for the appellants contends that once a
finding has been arrived that the appellants are employees
of the respondent establishment nothing more is required
to be adjudicated by reference of a dispute under the ID Act
and the writ court was competent to issue directions in this
behalf. It has been further pleaded that the respondent
management has failed to furnish the bifurcation of the
amount deposited towards provident fund in respect of
each of the employees. Learned counsel referred to the
judgement of a Division Bench of the Andhra Pradesh High
Court in A.P. Dairy Development Co-operative Federation
Ltd. Vs. Shivdas Pillai & Ors. 1992 (1) LLJ 153 where
directions were issued in writ appeal to the effect that once
a canteen was established, the workers of the canteen
would be treated as employees of the establishment under
the Factories Act. This arises from the obligation of an
establishment to provide for a canteen under Section 46 of
the Factories Act. A similar view has been taken again by
the Andhra Pradesh High Court in WA No.385/1996.
LPA No.1836-96 of 2006 Page 5 of 11
9. Learned counsel also invited our attention to the judgement
in Civil Appeal No.5990/1997 titled NTPC Vs. Karri Pothuraju
& Ors. decided on 13.8.2003 by the Supreme Court where it
was held that the respondent establishment was under a
statutory obligation to provide and maintain a canteen for
the benefit of all those serving in the union and the workers
of the canteen would be the employees of the company.
10. Learned counsel emphasized that in Bombay Telephone
Canteen Employees’ Association Vs. Union of India & Anr.
AIR 1997 SC 2817 it was held that the powers conferred
under Article 226 of the Constitution of India could be well
utilized to protect the security of a tenure against arbitrary
action of an employer and no reference was liable to be
made for that purpose under Section 10 of the ID Act.
11. Learned counsel for respondents 1 & 2, on the other hand,
emphasized that the appellants have been held to be
employees only within the meaning of the Factories Act and
in this behalf has referred to the subsequent judgement of
the Supreme Court in Haldia Refinery Canteen Employees’
Union & Ors. Vs. M/s. Indian Oil Corporation Ltd. & Ors.
2005 LLR 529. The Supreme Court observed that what had
been held in the earlier judgements was that the
employees working in a canteen were the employees of the
management for the purposes of Factories Act alone and
did not ipso facto become the employees of the
establishment for any other purpose. Learned counsel also
referred to the judgement of Indian Petrochemicals
Corporation Ltd. & Anr. Vs. Shramik Sena & Ors. (1999) 6
LPA No.1836-96 of 2006 Page 6 of 11
SCC 439, which expounded the same principal and
observed as under:
“22. If the argument of the workmen in regard to the
interpretation of Raha case is to be accepted then the
same would run counter to the law laid down by a
larger Bench of this Court in Khan case. On this point
similar is the view of another three-Judge Bench of this
Court in the case of Reserve Bank of India v.
Workmen. Therefore, following the judgment of this
Court in the cases of Khan and R.B.I. we hold that the
workmen of a statutory canteen would be the
workmen of the establishment for the purpose of the
Factories Act only and not for all other purposes.
23. Having held that the workmen in these appeals are
the respondent’s workmen for the purposes of the
Factories Act, we will now deal with the next question
arising in this appeal as to whether from the material
on record it could be held that the workmen are, in
fact, the employees of the Management for all
purposes.
24. Before answering this question, we would like to
observe that, normally, this being a question of fact,
this Court would have been reluctant to examine this
question which in the ordinary course should be first
decided by a fact-finding tribunal. However, as stated
above, in this case parties have filed detailed affidavits
and documents which, in our opinion, are sufficient for
us to decide this question without the need for any
oral evidence.”
12. It was, thus, submitted that the learned single Judge had
rightly directed that such a dispute to be decided by the
Industrial Tribunal. To the same effect are the observations
in Hari Shankar Sharma & Ors. Vs. M/s. Artificial Limbs
Manufacturing Corporation & Ors. 2001 (8) SCALE 282.
Learned counsel for respondents 1 & 2 further referred to
the judgement of the Supreme Court in Steel Authority of
India Ltd. & Ors. Vs. National Union Waterfront Workers &
Ors. (2001) 7 SCC 1 to contend that the Parliament never
intended absorption of contract labour on issuance of
abolition notification under Section 10 (1) of the Contract
LPA No.1836-96 of 2006 Page 7 of 11
Labour Act as also for the proposition that such matters are
to be decided by the industrial adjudicator as it required an
inquiry into disputed questions of fact which cannot be
conveniently decided by the High Court in exercise of
jurisdiction under Article 226 of the Constitution of India.
Learned counsel referred to the observations of the
Supreme Court in VST Industries Ltd. Vs. VST Industries
Workers’ Union & Anr. (2001) 1 SCC 298 in para 9 stating
that the workmen of statutory canteen would be the
workmen of the establishment only for the purposes of
Factories Act and thereafter other material on record would
have to be considered to show that the workmen are
employees of management for all purposes and adopting
certain tests as set out therein.
13. A reference is also being made to the judgement of the
Supreme Court in Secretary, State of Karnataka & Ors.Vs.
Umadevi (3) & Ors. (2006) 4 SCC 1 where certain
observations are made in para 43, which read as under:
“43. Thus, it is clear that adherence to the rule of
equality in public employment is a basic feature of our
Constitution and since the rule of law is the core of our
Constitution, a court would certainly be disabled from
passing an order upholding a violation of Article 14 or
in ordering the overlooking of the need to comply with
the requirements of Article 14 read with Article 16 of
the Constitution. Therefore, consistent with the
scheme for public employment, this Court while laying
down the law, has necessarily to hold that unless the
appointment is in terms of the relevant rules and after
a proper competition among qualified persons, the
same would not confer any right on the appointee. If it
is a contractual appointment, the appointment comes
to an end at the end of the contract, if it were an
engagement or appointment on daily wages or casual
basis, the same would come to an end when it is
discontinued. Similarly, a temporary employee could
not claim to be made permanent on the expiry of his
term of appointment. It has also to be clarified thatLPA No.1836-96 of 2006 Page 8 of 11
merely because a temporary employee or a casual
wage worker is continued for a time beyond the term
of his appointment, he would not be entitled to be
absorbed in regular service or made permanent,
merely on the strength of such continuance, if the
original appointment was not made by following a due
process of selection as envisaged by the relevant
rules. It is not open to the court to prevent regular
recruitment at the instance of temporary employees
whose period of employment has come to an end or of
ad hoc employees who by the very nature of their
appointment, do not acquire any right. The High
Courts acting under Article 226 of the Constitution,
should not ordinarily issue directions for absorption,
regularisation, or permanent continuance unless the
recruitment itself was made regularly and in terms of
the constitutional scheme. Merely because an
employee had continued under cover of an order of
the court, which we have described as “litigious
employment” in the earlier part of the judgment, he
would not be entitled to any right to be absorbed or
made permanent in the service. In fact, in such cases,
the High Court may not be justified in issuing interim
directions, since, after all, if ultimately the employee
approaching it is found entitled to relief, it may be
possible for it to mould the relief in such a manner that
ultimately no prejudice will be caused to him, whereas
an interim direction to continue his employment would
hold up the regular procedure for selection or impose
on the State the burden of paying an employee who is
really not required. The courts must be careful in
ensuring that they do not interfere unduly with the
economic arrangement of its affairs by the State or its
instrumentalities or lend themselves the instruments
to facilitate the bypassing of the constitutional and
statutory mandates.”
14. Learned counsel, thus, submitted that no direction for
regularization could be made in view of the aforesaid
observations.
15. Learned counsel also pleaded that the writ petition was
predicated on the plea of regularization while the fact
remains that no interim orders were passed and the
services of the appellants stood terminated. The appellants
never even amended the writ petition to challenge their
termination and thus no relief beyond what was claimed
could be granted.
LPA No.1836-96 of 2006 Page 9 of 11
16. A consideration of the legal principles set out aforesaid
leave no manner of doubt that there is unanimity on the
aspect that workers in a statutory canteen are employees
of the establishment only for the purposes of the Factories
Act. The issue whether they are to be otherwise treated as
workers of the establishment can be best addressed by the
Industrial Tribunal. The findings in respect of the aforesaid
especially in Haldia Refinery Canteen Employees’ Union &
Ors. case (supra) and Indian Petrochemicals Corporation
Ltd. & Anr. case (supra) can be usefully referred to.
17. It is also a fact that the services of the appellants stand
terminated for a long period of time. It is to be adjudicated
whether such termination was in accordance with law or
not. A question also arises whether the appellants could be
treated as employees of the respondent establishment
even for other purposes. All this would require a factual
inquiry to be made which cannot be conveniently made in
the proceedings under Article 226 of the Constitution of
India and as observed by numerous judgements referred to
aforesaid of the Supreme Court can be best addressed in
proceedings in the Industrial Tribunal. This is exactly what
the learned single Judge has directed in terms of the
impugned order and we can find no fault with the course of
action so adopted.
18. We also find that the only plea of the appellants is seeking
regularization and permission to work and it is stated that
the termination occurred soon after the writ petition was
filed. If the appellants wanted to challenge such a
LPA No.1836-96 of 2006 Page 10 of 11
termination, the first step in the direction ought to have
been to amend the writ petition. This was never done. We,
thus, find that the correct course of action has been
adopted by the learned single Judge.
19. The aspect of the provident fund to be deposited stands
addressed by respondent No.3 taking proceedings under
Section 7A of the EPF Act. The full amount stands
deposited with respondent No.3. It is always open to the
appellants to approach respondent No.3 for necessary
financial relief by giving details of their period of
employment and the consequent provident fund deposited
for each of such employee. Such an exercise cannot be
carried out in the writ proceedings and the grievance of the
appellants really stands redressed in view of the
proceedings undertaken under Section 7A of the EPF Act
and the consequent deposit of the amount.
20. We find no merit in the appeals, which are dismissed
leaving the parties to bear their own costs.
SANJAY KISHAN KAUL, J.
MARCH 25, 2009 SUDERSHAN KUMAR MISRA, J.
b'nesh
LPA No.1836-96 of 2006 Page 11 of 11