# INDIAN OVERSEAS BANK ~-.m v. I.O.B. STAFF CANTEEN WORKERS' UNION AND ANR

- **Citation:** [2000] 2 S.C.R. 1212
- **Court:** Supreme Court of India
- **Decided:** 2000-04-11
- **Case number:** Civil Appeal Nos. 1407-1409 of 1998
- **Bench:** S. Saghirahmad, Doraiswamy Raju
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-overseas-bank-m-v-i-o-b-staff-canteen-workers-union-and-anr-17223
- **Pages:** 22

## Headnote

_.......,_
Labour Laws :
Industrial Disputes Act, 1947-Section 2(5), 25-0-Master servant re lac
tionship-Tests to determine-Cooperative canteen for pmviding services to
Bank staff-Bank providing all infrastructural facilities-Canteen being run
with funrb provided by Bank-Canteen workers were enlisted under a Welfare
Fund Scheme of the Bank-Claim of canteen workers to be treated as employees of the Bank-Whether sustainable-Held, Yes.
D
Constitution of India-A11icle 226-Writ jurisdiction-Scope to interfere
with pure finding of fact.
Canteen facilities have been provided to the staff employees and the
departments of the Central Office of the Indian Overseas Bank. Initially,
the canteen was run through a contractor engaged by the management of
'
....
E
the bank but subsequently with effect from 3.1.1973, a co-operative can-
""
teen was promoted. The Central Office agreed to provide all infrastructural
--
facilities such as premises, furniture, utensils, electricity, oven and burners, wash-basin, gas and cylinders and a subsidy@ Rs. 12.50 per member
of the staff using the canteen. All the promoters were actually the serving
F
members of the staff of the bank. A separate account was opened in the
name of the canteen which was operated by the promoters and periodically funds were credited to the said account by the Central Office to carry
on the day to day administration of the bank. The staff required were
employed by the promoters. The amount of contribution of funds and the
subsidy was being increased from time to time depending upon the escalaG
tion of the costs of maintenance. The canteen was being run only with the
funds provided by the Central Officer and the amounts realised from day
to day receipts and neither the promoters nor any of the employees using
the canteen otherwise had either contributed any capital or was obliged to
_..,
make any such contribution to make the canteen economically viable.
H
However, the canteen was closed \\ith effect from 26.4.1990 as the persons
1212
INDIAN OVERSEAS BANK v. l.O.B. STAFF CANTEEN WORKERS
1213
~
incharge of the Canteen declaring their inability to continue the canteen in
A
...
the absence of further increase in the subsidy and grant to make up the
vast difference but the bank remaining indifferent. With the closure of the
canteen as the workers engaged were thrown out of employment, they
claimed that the canteen employees have to be treated as the employees of
the bank and restored to work. However, their claim was negatived by the
B
Central Officer, stating that except providing the facilities as well as funds
in the nature of grant and subsidy, the staff canteen was operated only by
the promoters and that there was no nexus or any relationship of an
employer - employee between the management of the bank and the workers of the canteen, consequently they could not be considered to be the
c
employees of the management. The conciliation proceedings having failed,
the dispute was referred for adjudication by the Industrial Tribunal. An
arrangement to run through a contractor was once again made by the
Bank from 21.10.1992.
The Tribunal held that there had been violation of Section 25-0( 6) of
D
the Industrial Disputes Act, the closure of the canteen shall be deemed to
be illegal from the date of the closure and the workmen shall be
entitled to all the benefits under the law for the time being in force, as if the
canteen had not been closed and that the arrangement made by the bank
entrusting the work to a contractor, and that also during the pendency of
E
the disputes before the Tribunal, it constituted an alteration in the service
conditions of the canteen employees. The bank filed Writ Petition against
the Award. The High Court quashed the award holding that there was
no employer-employee relationship between the bank management
and the canteen employees and consequently the question ofreinstatement
F
of the 33 canteen workers did not arise. In appeal, the Division Bench
restored t

## Text

_Characters 0–39,704 of 53,557. This is a partial read: ask again with offset=39704 for what follows._

T
A
INDIAN OVERSEAS BANK
~-.m
v.
I.O.B. STAFF CANTEEN WORKERS' UNION AND ANR.
APRIL 11, 2000
4!11
B
[S. SAGHIRAHMAD AND DORAISWAMY RAJU, JJ.]
_.......,_
Labour Laws :
Industrial Disputes Act, 1947-Section 2(5), 25-0-Master servant re lac
tionship-Tests to determine-Cooperative canteen for pmviding services to
Bank staff-Bank providing all infrastructural facilities-Canteen being run
with funrb provided by Bank-Canteen workers were enlisted under a Welfare
Fund Scheme of the Bank-Claim of canteen workers to be treated as employees of the Bank-Whether sustainable-Held, Yes.
D
Constitution of India-A11icle 226-Writ jurisdiction-Scope to interfere
with pure finding of fact.
Canteen facilities have been provided to the staff employees and the
departments of the Central Office of the Indian Overseas Bank. Initially,
the canteen was run through a contractor engaged by the management of
'
....
E
the bank but subsequently with effect from 3.1.1973, a co-operative can-
""
teen was promoted. The Central Office agreed to provide all infrastructural
--
facilities such as premises, furniture, utensils, electricity, oven and burners, wash-basin, gas and cylinders and a subsidy@ Rs. 12.50 per member
of the staff using the canteen. All the promoters were actually the serving
F
members of the staff of the bank. A separate account was opened in the
name of the canteen which was operated by the promoters and periodically funds were credited to the said account by the Central Office to carry
on the day to day administration of the bank. The staff required were
employed by the promoters. The amount of contribution of funds and the
subsidy was being increased from time to time depending upon the escalaG
tion of the costs of maintenance. The canteen was being run only with the
funds provided by the Central Officer and the amounts realised from day
to day receipts and neither the promoters nor any of the employees using
the canteen otherwise had either contributed any capital or was obliged to
_..,
make any such contribution to make the canteen economically viable.
H
However, the canteen was closed \\ith effect from 26.4.1990 as the persons
1212
INDIAN OVERSEAS BANK v. l.O.B. STAFF CANTEEN WORKERS
1213
~
incharge of the Canteen declaring their inability to continue the canteen in
A
...
the absence of further increase in the subsidy and grant to make up the
vast difference but the bank remaining indifferent. With the closure of the
canteen as the workers engaged were thrown out of employment, they
claimed that the canteen employees have to be treated as the employees of
the bank and restored to work. However, their claim was negatived by the
B
Central Officer, stating that except providing the facilities as well as funds
in the nature of grant and subsidy, the staff canteen was operated only by
the promoters and that there was no nexus or any relationship of an
employer - employee between the management of the bank and the workers of the canteen, consequently they could not be considered to be the
c
employees of the management. The conciliation proceedings having failed,
the dispute was referred for adjudication by the Industrial Tribunal. An
arrangement to run through a contractor was once again made by the
Bank from 21.10.1992.
The Tribunal held that there had been violation of Section 25-0( 6) of
D
the Industrial Disputes Act, the closure of the canteen shall be deemed to
be illegal from the date of the closure and the workmen shall be
entitled to all the benefits under the law for the time being in force, as if the
canteen had not been closed and that the arrangement made by the bank
entrusting the work to a contractor, and that also during the pendency of
E
the disputes before the Tribunal, it constituted an alteration in the service
conditions of the canteen employees. The bank filed Writ Petition against
the Award. The High Court quashed the award holding that there was
no employer-employee relationship between the bank management
and the canteen employees and consequently the question ofreinstatement
F
of the 33 canteen workers did not arise. In appeal, the Division Bench
restored the award of the Tribunal, over ruling the decision of the
Single Judge, holding that not only the bank had an obligation to run
the canteen but infact was only running the canteen. These appeals
had been filed by the bank against the judgment of the Division Bench of
the High Court alleging that the canteen facilities are not a condition of
G
service of the employees of the bank and an apprehension had also been
expressed that if the claim of the canteen workers in this case is upheld, the
c:
appellant - Bank would have to face similar claims made by every employee of the canteen run everywhere and even subsequently by various
contractors.
H
1214
SUPREME COURT REPORTS
[2000) 2 S.C.R.
A
Dismissing the appeals, the Court
B
c
D
E
F
G
H
HELD : 1.1. The Single Judge of the High Court seems to have
undertaken an exercise, impermissible for him in exercising writ jurisdiction, by liberally re-appreciating the evidence and drawing conclusions of
his own on pure questions of fact, unmindful, though aware fully, that he is
not exercising any appellate jurisdiction over the awards passed by a
Tribunal presided over by a Judicial Officer. The findings of fact recorded
by a fact - finding authority duly constituted for the purpose and which
ordinarily should be considered to have become final, cannot be disturbed
for the mere reason of having been based on materials or e~d'ence not
sufficient or credible in the opinion of the Writ Court to warrant those
findings, at any rate, as long as they are based upon some material which
are relevant for the purpose or even on the ground that there is yet another
view which can be reasonably and possibly be taken. The Division Bench
was not only justified but well merited in its criticism of the order of the
Single Judge and in ordering restoration of the Award of the Tribunal. In
the instant case, the Industrial Tribunal had overwhelming materials which
constituted ample and sufficient basis for recording its findings, as it did,
and the manner of consideration undertaken the objectivity of approach
adopted and reasonableness of findings recorded seem to be unexceptionable. The only course, therefore, open to the Writ Judge was to find out the
satisfaction or otherwise of the relevant criteria laid down by this Court,
before sustaining the claim of the canteen workmen, on the facts found and
recorded by the fact-finding authority and not embark upon an exercise of
re-assessing the evidence and arriving at findings of ones own, altogether
giving a complete go-bye even to the facts specifically found by the Tribunal below. [1230-B-G]
1.2. The standards and nature of tests to be applied for finding out
the existence of master and servant relationship cannot be confined to or
concretised into fixed formula for universal application, invariably in all
class or category of cases. Though some common standards can be devised,
the mere availability of anyone or more or their absence in a given case
cannot by itself be held to be decisive of the whole issue, since it may
depend upon each case and the peculiar device adopted by the employer to
get his needs fulfilled without rendering him liable. That being the position, in order to safeguard the welfare of the workmen, the veil may have
to be pierced to get at the realities. Therefore, it would be not only impos-
INDIAN OVERSEAS BANK v. l.O.B. STAFF CANTEEN WORKERS
1215
sible but also not desirable to lay down abstract principles of rules to serve
A
---
as a ready reckoner for all situations and thereby attempt to
compartmentalise and peg them into any pigeonhole formula, to be
insisted upon as proof of such relationship. This would only help to
'
perpetuate practising unfair labour practices than rendering substantial
justice to the class of persons who are invariably exploited on account of
B
their inability to dictate terms in relation to conditions of that service.
(1230-H; 1231-A-B]
1.3. The canteen in question was being run from 1.1.73 and even
before that, indisputably, the Bank itself had arranged for running of the
same through a contractor and similar arrangement to run through a conc
tractor was once again made by the bank on its closure on 26.4.1990, though
after a period of some break from 21.10.1992. Besides this, the nature and
extent of assistance, financial and otherwise in kind, provided would get to
establish inevitably that the bank has unmistakably and for reasons obvious always undertaken the obligation to provide the canteen services, though
D
there may not be any statutory obligation and it will be too late to contend
that the provisions of canteen had not become a part of the service conditions of the employees. The materials placed on record also highlight the
position that the Bank was always conscious of the fact that the provision
and availing of canteen services by the staff are not only essential but would
help to contribute for the efficiency of service by the employees of the bank.
E
That it was restricted to the employees only, that the subsidy rate per employee was being also provided, and the working hours and days of the
canteen located in the very Bank buildings were strictly those of the bank
and the further fact that no part of the capital required to run the same was
contributed by either the Promoters or the staff using the canteen are facF
tors which strengthen the claim of the workers. It was also on evidence that
the canteen workers were enlisted under a Welfare Fund scheme of the
Bank besides making them eligible for periodical medical check up by the
the doctors of the Bank and admitting them to the benefits of the Provident
Fund Scheme. The cumulative effect of all such and other facts provided
sufficient basis for recording its findings by the Tribunal as well as the
G
Division Bench of the High Court ultimately to sustain the claim of the
workers, in this case. [1231-H; 1232-A-E]
-
\ 1.4. The Single Judge seems to have not only overlooked certain
-
relevant material but by adopting a negative approach had belittled the
relevance and importance of several vital and important factual aspects
H
A
B
c
D
1216
SUPREME COURT REPORTS
[2000] 2 S.C.R.
brought on record. If on the facts proved, the findings recorded by the
Tribunal are justified and could not be considered to be based upon no
evidence, there is no justification for the High Court in exercising writ
jurisdiction to interfere with the same. The promoters of the canteen being
permanent employees in the service of the Bank, permitted to run the
canteen, by merely being in control of the day-to-day affairs of the canteen, the Bank cannot be absolved of its liabilities when it was really using
the canteen management as its instrumentality and agent. Consequently,
there is neither any error of law or other vitiating circumstances in the
judgment of the Division Bench nor any infirmities in the process of
reasoning or gross unreasonableness and absurdities in th.e conclusions
arrived at to restore the Award, so as to justify and warrant any interference in the matter. [1232-F-H]
M.M.R. Khan & Ors. v. Union of India & Ors., [1990] Supp. SCC 191;
Parimal Chandra Raha & Ors. v. UC & Ors., [1995] Supp. 2 SCC 611;
Employers in relation to Management of Reserve Bank of India v. Workmen,
[1996] 3 sec 267' relied on.
Indian Petrochemicals Corporation Ltd. & Anr: v. Shramik Sena & Ors.,
[1999] 6 sec 439, distinguished.
E
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1407-1409
of 1998.
From the Judgment and Order dated 1.10.97 of the Madras High Court
in W.A. Nos. 463-465 of 1996.
F
Soll J. Sorabjee, Attorney General, S. Ganesh, P.S. Sudheer, P. Venugopal,
G
H
K.J. John, S. Ravindra Bhat and Ms. Manju Mishra for the appearing parties.
The Judgment of the Court was delivered by
RAJU, J. These three appeals relate to a common grievance of a group
of 33 canteen employees of Indian Overseas Bank Staff Canteen and involve
for consideration a vexed question but often relentlessly fought and put in
issue between the workers and management as to status and relationship of
workers in such canteens vis-a-vis the main industry or establishment concerned. At the Central Office of the Indiari Overseas Bank at Madras (for
shmt "IOB"), the canteen facilities have been provided to the staff employees
--
-
INDIAN OVERSEAS BANK v. I.O.B. STAFF CANTEEN WORKERS [RAJU, J.]
1217
and the departments of the Central Office, in the main building, new building
and canteen block as also C&I Branch and Cathedral Branch. Initially, it
appears that the said canteen was run through a contractor engaged by the
management of the bank. But subsequently on the representation of the All
·India Overseas Bank Employees Union, the Central Office of JOB agreed for
the floating of a society in the name and style of "Indian Overseas Bank Staff
Co-operative Canteen" with effect from 3.1.73. In order to facilitate the
running of such a canteen, the Central Office has not only got the erstwhile
contractor, who was running the same in the canteen block, vacated the
canteen premises on 30.10.72 but wanted the Co-operative Canteen to
commence its functions from 2.1.73 to ensure continuity in providing the
services to the staff. The Central Office agreed to provide all infrastructural
facilities, such as premises, furniture, utensils, electricity (other than fuel),
cost of fuel initially upto a maximum of 600 per month, subsequently
increased to 6000 per month and water supply. This was in addition to
providing the oven and burners, wash basin, gas and cylinders and a subsidy
A
B
c
@ Rs.12.50 per member of the staff using the canteen. The Co-operative
D
canteen was promoted in that manner not only with the blessings and active
co-operation and assistance of the Central Office but the all promoters were
actually the serving members of the staff of the bank. No doubt, after the
formation of the Co-operative canteen, a separate account has been opened
in the name of the canteen which was operated by the promoters and
periodically funds have been credited to the said account by the Central
Office to carry on the day-to-day administration of the bank. It is also a fact
that the staff required were employed by the promoters who have been
administering the canteen. It is seen from the inter se correspondence and the
material placed on record that the amount of contribution of funds and the
subsidy was being increased from time to time depending upon the escalation
of the costs of maintenance on the representation of the persons in charge of
the running of the co-operative canteen. Despite such increase, having regard
to the subsidised and concessional rate of supply of the edibles as also the
beverages supplied to the staff employees both ends could not be economically met resulting in the persons incharge of the canteen declaring their
inability to continue the canteen in the absence of further increase in the
subsidy and grant to make up the vast difference. Since the bank was
indifferent, the canteen was closed with effect from 26.4.90.
There is no controversy or dispute over the further fact that the canteen
E
F
G
was being run only with the funds provided by the Central Office and the
H
A
B
c
D
1218
SUPREME COURT REPORTS
[20001 2 s.c.R.
!
amounts realised from day-to-day receipts and neither the promoters nor any
of the employees using the canteen otherwise had either contributed any
capital or was obliged to make any such contribution to make the canteen
economically viable or keep going at any cost. It is also not in dispute that
with the closure of the canteen the workers engaged have been thrown out
of employment and this resulted in an industrial dispute, raised through the
workers' union. Their stand was that the staff canteen in question was really
managed by the bank though the day-to-day affairs of the management was
entrusted to the employees of the bank nominated by the recognised union
of the bank and, therefore. the canteen employees have to be treated as the
employees of the bank and restored to work. In this connection, the union
sought to draw inspiration from the practice in vogue in the Railways and
other Nationalised banks, including State Bank of India. Per contra, the
. Central Office took the stand that except providing the facilities as well as
funds in the nature of grant and subsidy, the Staff Canteen was operated only
by the promoters by engaging the required workers and there is no nexus or
any relationship of an employer-employee between the management of IOB
and workers of the canteen and consequently they cannot be considered to be
the employees of the management.
I
The conciliation proceedings having failed, the Government of India in
exercise of the powers conferred under clause (d) of sub Section (1) and sub
E
Section (2A) of Section 10 of the Industrial Disputes Act, 1947 referred the
following dispute for adjudication by the Industrial Tribunal, Chennai:
F
G
H
"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 committees, as
workman of Indian Overseas Bank for giving them 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 ?"
This was taken on file as 1.D. No.72 of 1990.
Subsequently, on 17.2.91, the Government of India again referred the
following dispute for adjudication by the Industrial Tribunal, Chennai:
"Whether the demand of the Indian Overseas Bank Staff Canteen
-
-
-/
INDIAN OVERSEAS BANK v. I.O.B. STAFF CANTEEN WORKERS [RAJU, J.]
1219
Workers Union, Madras for reinstatement of 33 canteen employees
A
for 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 ?"
This dispute was taken on file as I.D. No.83 of 1991.
While matters stood thus, the Central Office had made arrangements
with a third party for running the canteen on contractual basis with effect from
15.3.92 and aggrieved complaint No.4 of 92 under Section 33-A of the
Industrial Disputes Act, 1947 [hereinafter referred to as "The Act"] read with
Rule 59 of the Industrial Disputes (Central) Rules, 1957 [hereinafter referred
to as "The Central Rules"] came to be filed on behalf of the workers. The
two disputes as well as the complaint were taken up for hearing together and
in view of a joint memo stating that evidence may be recorded in complaint
No.4 of 92 and the said evidence may be treated as evidence in I.D.No.72
of 90 and I.D. No.83 of 91, all the three matters can be tried together and
a common award be passed.
The Tribunal, after considering the pleadings, the oral and documentary
evidence adduced by both parties, held as follows:
"26. So, bearing in mind these decision, if we take into consideration
the following facts namely; (1) That the canteen is in the premises
of the Bank; (2) That the canteen is for the exclusive use of the staff
of the Bank; (3) That the working hours and days of the bank; (4)
That the Bank provided the infrastructure like furniture, utensils,
refrigerators, water coolers apart from meeting the cost of gas,
electricity and water; (5) That the cost of the materials were met and
wages for the workmen are also met only from the funds provid~d
by the bank; (6) That neither the workers nor the Managing
Committee contributed either to the capital or the expense for
running the canteen; (7) That the bank gave the subsidy for
supplying the food articles to its employees at concessional rates;
(8) That they even provided cycles and tricycles to the canteen for
the supply of food stuffs then it will be clear that the employees of
the canteen will have to be treated as the employees of the bank,
despite the fact that the ultimate control and supervision over the
employees of the canteen was with the Managing Committee, and
also the fact that the employee of the canteen were appointed onJy
B
c
D
E
F
G
H
A
B
c
D
1220
SUPREME COURT REPORTS
[2000] 2 S.C.R.
by the Managing Committee, itself comprised only of the employees,
of the respondent-bank. So, I have to hold that it was the Bank who
was running the canteen through the Managing Committee which
consisted of the employees of the bank. So, in the light of the
discussions above, I find that the 33 employees of the canteen have
to be treated as the workmen of the respondent bank for giving them
the same status, same facilities as are available to the Class IV
employees of the bank."
It was also held that there had been violation of Section 25-0 (6) of
the Act and the closure of the canteen shall be deemed to be illegal from the
date of the closure of the workmen shall be entitled to all the benefits under
the law for the time being in force, as if the canteen had not been closed. The
Tribunal also allowed the claim made in the complaint No.4 of 92, since
concedingly the Central Office had arranged the function from 15.3.92 by
entrusting the same to a contractor and such an action during the pendency
of the disputes before the Industrial Tribunal constituted an alteration in the
service conditions of the canteen employees.
Aggrieved against the common Award dated 27.5.94, the bank management filed three Writ Petitions Nos. 21251-21253 of 1994 challenging the
award in the three proceedings, noticed above. They were heard in common
E
and a learned Single Judge of the Madras High Court by his order dated
8.3.96 quashed the awards holding that there was no employer- employee
relationship between the bank management and the canteen employees and
consequently the question of reinstatement of the 33 canteen workers or
taking cognizance of the complaint under Section 33-A of the Act do not
F
G
arise. Aggrieved, the workers' union pursued the matter on appeal before the
Division Bench in Writ Appeal No. 463-465 of 1996. The learned Judges of
the Division Bench accepted the appeal by setting aside the order of the
Single Judge and restoring the award of the Tribunal, on the view that not
only the bank in question had an obligation to run the canteen but in fact was
only running the canteen. It would be useful as also necessary to advert to
the factual details noticed by the Division Bench which weighed with it to
overrule the decision of the Single Judge and restore the award passed by the
Industrial Tribunal in the matter. In paragraphs 6 to 9 of their judgment, the
learned Judges of the Division Bench analysed the factual position recorded
by the Tribunal, while pointing out the infirmities in the approach as well as
H
the impermissibility of the exercise undertaken by the learned Single Judge
-
--
--.
- )
,i
-·
INDIAN OVERSEAS BANK v. 1.0.B. STAFF CANfEEN WORKERS [RAJU, J.]
1221
by observing as follows:
"6. It is therefore our difficult task to go through facts of the present
case and come to a conclusion one way or the other. The first aspect
of the case is that even here, there is no statutory obligation on the
part of the bank to provide canteen facilities to its employees. But
the question is whether there is any legal obligation implicit or
explicit, as pointed out in the LIC case. Before the Tribunal, the
following aspects were emphasised by the canteen employees:
(i) Three promoters were appointed from among the permanent
employees of the bank for a period of one year;
(ii) At the end of one year, another committee was nominated
by the bank. The promoters were looking after the day to day
supervision of the canteen apart from doing their regular work
as bank employees;
(iii) The management had taken upon itself the responsibility of
providing canteen facilities to the employees under a subsidised
scheme;
(iv) The bank provided the basic requirements like building,
A
B
c
D
utensils, crockery, cutlery and furniture etc.;
E
(v) The bank was giving subsidy for meeting the salary of the
canteen employees and were increasing the same from time to
time.
(vi) Supply of foodstuffs at concessional rate was also done by
F
the bank;
(vii) The cost fuel, electricity and water supply charges apart
from providing refrigerators and water coolers were also met by
the bank; and
(viii) In effect, the canteen was run out of the funds of the bank.
As against the above, the bank contended (i) that there was no
employer employee relationship; (ii) it was only at the request of the
union that the bank agreed to provide a canteen; (iii) the bank had
G
no say in choosing the members of the committee and (iv) the canteen
H
1222
SUPREME COURT REPORTS
[2000] 2 S.C.R.
A
is .not for the exclusive use of the bank.
~-
7. In evidence, one other important fact was brought out, viz., that
the canteen workers were employed under a Welfare Fund Scheme
of the Bank. They are made eligible for periodical medical check
- . up by the Doctors of the bank. On the above rival submissions and
B
evidence, the Tribunal came to the following conclusions: (i) that
the canteen run ill' the premises of the bank; (ii) the canteen is for
the exclusive use of the bank staff; (iii) the bank provided the
infrastructure facilities; (iv) the managing committee did not contribute anything towards the capital or the expenses for running the
c
canteen; (v) the bank gave subsidies to subsidise the purchase of
food articles and ·(vi) the bank provide cycles and tricycles to the
canteen for the supply of foodstuffs - Consequently, the Tribunal
came to the conclusion that the thirty three employees have to be
treated as workmen of the bank and should be given the same status
D
and facilities as are available to the class IV employees of the bank.
The Tribunal also held that the closure of the canteen when the
dispute was pending was illegal.
8. The question is whether in view of such categorical findings of
fact arrived at by the Tribunal, the learned Single Judge exercising
jurisdiction under Article 226 of the Constitution of India could re-
.... -
E
appreciate the evidence and come to a different conclusion. We have
already pointed out that the learned single Judge had erred in
appreciating certain documents and the evidence in the case. We are
..
clearly of the opinion that the learned Single Judge had no material
to characterise the judgment of the Tribunal as perverse. We will
F
once again refer to certain important matters which would go a long
way to decide the matter. The inference drawn from Ex.Ml that it
was the Union, who wanted the canteen is far from truth. The
subsequent evidence has got to be looked into on this aspect of the
case. In Ex.M4, dated 23.4.1988, the Union has informed the bank
.. _
G
about the new canteen promoters for the record of the bank. The
inference drawn by the learned Judge from Ex.M5 that the canteen
was not exclusive for the bank is based on a misconception. The
, ...
evidence of MWl clearly shows that the canteen is meant only for
~
.
the bank. His evidence is as follows:
H
" ...... The canteen is meant only for the staff of the bank the can-
INDIAN OVERSEAS BANK v. 1.0.B. STAFF CANTEEN WORKERS [RAJU, J .]
1223
.,
teen will remain only for closed on bank holidays .... "
A
I
The observation that the bank was running the canteen to retain good
relationship between the union and the management is not appro-
--
priate and on the other hand, it only shows that the bank was
implicitly bound to maintain the canteen. The learned Single Judge
B
has not given due weight to the two principles enunciated in the LIC
case and undisturbed by the RBI case. We have already quoted those
principles.
9. One other significant fact which has escaped the attention of the
learned Single Judge is the letter written by the Central Office of c
the bank when the promoters expressed their inability to nm the
canteen with effect from 26.4.90. Says the management as follows:
"Member of staff are advised that the canteen will function in
our canteen block with effect from 21.10.1992. The contractors
will run the canteen with minimum staff for a week on a trial
D
basis to overcome the difficulties if any. The canteen will run
normally after a week or so .... "
The bank further says that the canteen is for the welfare of the staff
and directs as follows:
E
"All members are requested to avail this facility and refrain from
going out for coffee and tea. Since the canteen has started func-
':;
tioning the Department Heads should inform all the staff memhers to restrict their lunch time to half an hour between 12.30
and 3.00 p.m. and the staff may be permitted to go for lunch in
F
fixed time to avoid heavy rush at the canteen .... "
The above passage quoted from the letter of the Central Office of
the Bank amply establishes that the bank had an obligation to run
the canteen and in fact, was running the canteen, through contrac-
-·"'
tors, even though the promoters had withdrawn their services.
Actually, it appears that the promoters were desirous of forming a
G
co-operative society and it did not fructify. In this view of the matter,
--
it is clear that as in the LIC case, the bank had been running the
canteen by one or other of the agency."
Before dealing with the contentions of the counsel on either side, it is
H
A
B
c
D
E
F
G
H
1224
SUPREME COURT REPORTS
[2000] 2 S.C.R.
necessary to refer to the earlier, at least of a few pronouncements of this
Court, which lay down the approach to be adopted and guidelines to be
followed, in analysing as well as answering the issues raised, which at any
rate have generated much heat, for almost nearly a dt:cade. The first in the
series is the decision of this Court rendered by a Bench of three learned
Judges reported in M.M.R. Khan & Ors. v. Union of India & Ors., [1990]
Supp. SCC 191. In this case, this Court classified the canteens into three
categories: (1) Statutory canteens which are required to be provided compulsorily in view of Section 46 of the Factories Act, 1948; (2) Non-statutory
recognised canteens-such of those which are established with the prior
approval and recognition of the Railway Board as per the procedure detailed
in the Railway Establishment Manual; and (3) Non-statutory non- recognised
canteens - which are canteens established without prior approval or recognition of the Railway Board. Of the employees in the statutory c:mteens, it was
held that they are entitled to the status of Railway Employees, also for the
reason of the factual findings found discussed in the judgment. So far as the
employees of the non-statutory recognised canteens are concerned, they were
also held entitled to be treated on par with those employees in the statutory
canteens and as Railway servants, for all purposes. The third category of
employees were held not entitled to claim the status of Railway servants.
P.B. Sawant, J., who authored the decision in MMR Khan's case
(Supra), has once again spoken for an another Bench of himself and Majmudar,
J., in the decision reported in Parimal Chandra Raha & Others v. life
Insurance Corporation of India & Others , (for sh()rt "LIC case") [1995]
Supp. 2 SCC 611 and after review of the case-law on the subject, culled out
the principles emanating from them as hereunder:
"25. 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
I-
\ ..
-
-
--
'\
INDIAN OVERSEAS BANK v. 1.0.B. STAFF CANTEEN WORKERS [RAJU, 1.]
1225
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 services has become a part of the service conditions of the employees, the canteen becomes a part of
the establishment and the workers in such canteen become the
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 and nothing more, the number of employees employed
in the establishment and the number of employees who avail of
the service, the length of time for which the service has been
continuously available, the hours during which it is available,
the nature and character of management, the interest taken by
the employer in providing, maintaining, supervising and conI
trolling the service, the contribution made by the management
in the form of infrastructure and funds for making the service
available etc."
Thereupon, the factual matrix disclosed from the materials on record in
that case were dealt with besides noticing the fact that though the LIC has
A
B
c
D
E
F
G
not explicitly undertaken to provide canteen services to its employees workH
1226
SUPREME COURT REPORTS
[2000] 2 S.C.R.
A
ing in the offices but only accepted ,explicitly the obligation to provide to the
employees facilities to run the canteen, the facts on record established that the
qc had implicitly accepted the obligation to provide canteen services and not
merely the facilities to run the canteen. It was also observed thereunder as
follows:
B
c
D
E
F
G
H
"29. 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 worlting of the canteen. Although the superV-ising 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 rupi)lied 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
-
-
---
' ,.
INDIAN OVERSEAS BANK v. I.O.B. STAFF CANTEEN WORKERS [RAJU, 1.] ·
1227
available to the employees by the canteen, the Cmporation has also
A
tried to avoid the waste of tiine 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 Coiporation 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 Coiporation 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 cooperative 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."
In Employers in relation to the Management of Reserve Bank of India
v. Worlcmen, [1996] 3 SCC 267, after adverting to all those principles, it was
held on facts established therein that in the absence of any statutory or other
legal obligation and in the absence of any right in the Bank to supervise and
control the. work or details thereof in any manner regarding the canteen
workers employed in the three types of canteens, it cannot be said that the
relationship of master and servant existed between the bank and the various
persons employed in three types of canteens. The demand for regularisation
was considered to be unsustainable since the workers could not substantiate
the existence of relationship of employer-employee.
In Indian Petrochemicals Corporation lJd.& Am: v. Shramik Sena &
Ors., [1999] 6 SCC 439 the claim of workmen of statutory canteen managed
by a Contractor fell for consideration and while explaining UC case (Supra)
and following the decision inMMR Khan's case (Supra) and Reserve Bank's
case (Supra), it was held that the deemed employment of such workers is only
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
1228
SUPREME COURT REPORTS
[2000] 2 S.C.R.
for the purposes of the Factories Act and not for all purpose, because the
Factories Act.