# PARIMAL CHANDRA AND ORS v. LIFE INSURANCE CORPORATION OF INDIA AND ORS

- **Citation:** [1995] 3 S.C.R. 34
- **Court:** Supreme Court of India
- **Decided:** 1995-03-29
- **Case number:** Civil Appeal No. 1744 of 1992
- **Bench:** P.B. Sawnt, S.B. Majmudar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/parimal-chandra-and-ors-v-life-insurance-corporation-of-india-and-ors-13134
- **Pages:** 35

## Headnote

Service Law: Life Insurance Corporation-Claim of canteen employees
that they are employees of corporation and thus entitled to parity with
employees of Corporation-Canteen facilities provided to staff for a very long
C time-By usage and customary benefits canteen facilities becoming the condition of service-Corporation having dominating say in dictating the terms
of canteen contract-Contract indicating that Corporation was desirous of
running the canteen-Held on facts there was implicit obligation to provide
canteen services-Canteen workers held employees of Corporation-Factories
D Act and West Bengal shops and Establishment Act held inapplicable.
Principle of equal pay for equal work-Applicability of
Constitution of India, 1950 : Articles 226 and 32
E
Writ-Canteen employees of LIC-l'rayer for wages equivalent to wages
paid to employees of LIC-Withdrawal of writ-Filing of writ in Supreme
Court-Preliminary objection that relief claimed in this Cowt was not claimed
before High Cou~eld not maintainable on facts.
Pleadings-Interpretation o~Should be read as a whole and const!Ued
F accordingly.
The appellant-workmen-working in the canteens at different offices
of the respondent-Corporation filed a writ petition in the High Court of
Calcutta for directions to the respondent-Corporation to comply with the
policy of equal pay for equal work and accordiL.:IY pay to the appellants
G the minimum salary that was enjoyed by the staff of the Corporation and
also to follow the policy which was prevalent for canteen workers in other
Government departments, railways and statutory corporations. The appel·
lants specifically pleaded that (i) the staff of the respondent-Corporation
at all its establishments were provided with facilities of canteen by tlte
H respondent-Corporation for more than few decades and that by usage and
34
-
P. CHANDRA v. L.l.C.
35
customary benefits canteen facilities became the condition of service of the A
employees - a fact not specifically controverted by the Respondent-Corporation. (ii) being canteen employees and engaged in operation incidentally connected with the industry carried on by the respondentcorporation, the appellants antomatically became the direct employees
under the respondent-Corporation and as such they cannot be disB
criminated against and denied the prevalent minimum wages.
The case of the respondent-Corporation before the Single Judge of
the High Court was that the canteens did not belong to it nor were they
run by it. The Corporation only gave its employees the facilities to run the
canteens. The canteens were run during different periods either by the C
canteen-committees of the staff or their cooperative society. It has no
connection mnch less contract of employment with the appellants. Nor
does it have any control over their working conditions of service or the
termination of their services. Appellants were therefore not the employees
of the Corporation and cannot be deemed to be so.
D
However, the facts on record revealed in nnmistakable terms that
canteen services were provided to the employees for a long time and from
time to time the Respondent-Corporation was taking steps to provide the
said services. Further from the terms of the contract which was rxclusively
entered Into between the Corporation and the canteen Contractor - it was E
clear that the Corporation has the dominating say in dictating the terms
and conditions of the contract and that it was the Corporation and not the
employees of the Corporation or their union or cooperative society which
was desirous of running the canteen.
F
A Single Judge of the High Court allowed the writ petition and
granted the relief prayed for. The respondent- Corporation preferred a
Letters Patent Appeal before the Division Bench of the High Conrt. The
averments made by the appellants in their rejoinder before the Division
Bench of the High Conrt to the effect that the job done by the canteen
employees was of perennial nature and was incidental to t

## Text

_Characters 0–39,716 of 88,276. This is a partial read: ask again with offset=39716 for what follows._

A
B
PARIMAL CHANDRA AND ORS.
v.
LIFE INSURANCE CORPORATION OF INDIA AND ORS.
MARCH 29, 1995
[P.B. SAWNT AND S.B. MAJMUDAR, JJ.]
Service Law: Life Insurance Corporation-Claim of canteen employees
that they are employees of corporation and thus entitled to parity with
employees of Corporation-Canteen facilities provided to staff for a very long
C time-By usage and customary benefits canteen facilities becoming the condition of service-Corporation having dominating say in dictating the terms
of canteen contract-Contract indicating that Corporation was desirous of
running the canteen-Held on facts there was implicit obligation to provide
canteen services-Canteen workers held employees of Corporation-Factories
D Act and West Bengal shops and Establishment Act held inapplicable.
Principle of equal pay for equal work-Applicability of
Constitution of India, 1950 : Articles 226 and 32
E
Writ-Canteen employees of LIC-l'rayer for wages equivalent to wages
paid to employees of LIC-Withdrawal of writ-Filing of writ in Supreme
Court-Preliminary objection that relief claimed in this Cowt was not claimed
before High Cou~eld not maintainable on facts.
Pleadings-Interpretation o~Should be read as a whole and const!Ued
F accordingly.
The appellant-workmen-working in the canteens at different offices
of the respondent-Corporation filed a writ petition in the High Court of
Calcutta for directions to the respondent-Corporation to comply with the
policy of equal pay for equal work and accordiL.:IY pay to the appellants
G the minimum salary that was enjoyed by the staff of the Corporation and
also to follow the policy which was prevalent for canteen workers in other
Government departments, railways and statutory corporations. The appel·
lants specifically pleaded that (i) the staff of the respondent-Corporation
at all its establishments were provided with facilities of canteen by tlte
H respondent-Corporation for more than few decades and that by usage and
34
-
P. CHANDRA v. L.l.C.
35
customary benefits canteen facilities became the condition of service of the A
employees - a fact not specifically controverted by the Respondent-Corporation. (ii) being canteen employees and engaged in operation incidentally connected with the industry carried on by the respondentcorporation, the appellants antomatically became the direct employees
under the respondent-Corporation and as such they cannot be disB
criminated against and denied the prevalent minimum wages.
The case of the respondent-Corporation before the Single Judge of
the High Court was that the canteens did not belong to it nor were they
run by it. The Corporation only gave its employees the facilities to run the
canteens. The canteens were run during different periods either by the C
canteen-committees of the staff or their cooperative society. It has no
connection mnch less contract of employment with the appellants. Nor
does it have any control over their working conditions of service or the
termination of their services. Appellants were therefore not the employees
of the Corporation and cannot be deemed to be so.
D
However, the facts on record revealed in nnmistakable terms that
canteen services were provided to the employees for a long time and from
time to time the Respondent-Corporation was taking steps to provide the
said services. Further from the terms of the contract which was rxclusively
entered Into between the Corporation and the canteen Contractor - it was E
clear that the Corporation has the dominating say in dictating the terms
and conditions of the contract and that it was the Corporation and not the
employees of the Corporation or their union or cooperative society which
was desirous of running the canteen.
F
A Single Judge of the High Court allowed the writ petition and
granted the relief prayed for. The respondent- Corporation preferred a
Letters Patent Appeal before the Division Bench of the High Conrt. The
averments made by the appellants in their rejoinder before the Division
Bench of the High Conrt to the effect that the job done by the canteen
employees was of perennial nature and was incidental to the running of G
the main business of the Corporation and it was being done by the
Corporation through their Intermediaries - sometimes by contractors,
sometimes by cooperative society and sometimes by canteen employees
themselves was not denied by the Corporation. However, the Division
Bench set aside the decision of the Single Judge and dismissed the H
36
SUPREME COURT REPORTS
[1995] 3 S.C.R.
A appellants' writ petition by holding that (i) the canteen was being run by
a committee or coopera\jve society of the staff members of the Corporation
(ii) the Corporation only agreed tt)rovlde space to house the canteen and
certain chairs and tables for the Ilse of its staff members, (iii) an inde·
pendent contractor had been appointed to run the canteen (iv) and since
B no letter of appointment bad ever been issued by the Corporation and no
attendance register was maintained and the salary of the canteen workers
was being paid by tht independent _contractor and not from the funds of
the Corporation, there was no employer and employee relationship be·
tween the Corporation and the appellants.
C
In appeal to this Court the questions which arose for consideration
were : (i) Whether the appellants should be deemed to be the regular
employees of the respondent-Corporation, and if so (ii) what Pay-scales
and other service conditions should be made available to them. A prelimi·
nary objection was raised on behalf of the respondent-Corporation that in
these proceedings the appellants have claimed relief which they bad not
D claimed before the High Court and hence they cannot ask for the relief in
question.
Allowing the appeal, this Court
E
HELD : 1. The averments made in the writ petition, before the High
Court show in unmistakable terms that the appellants approached the
High Court with a specific plea that they are the employees of the respon·
dent-Corporation and as such, they should be paid the minimum wages
which are being paid to other regular employees. The relief of minimum
wages paid to the other regular employees of the corporation on the basis
F of the priedple of equal pay for equal work is thus claimed on the ground
'that they are also the regular employee. of the Corporation. Thus, the
relief claimed includes in it the basis of the relief, viz., their status as the
regular employees of the Corporation. Pleadings have to be read as a whole
and construed accordingly. Thus construed, the relief claimed leaves no
G doubt that it is based on the claim for the status of the regular employees
of the Corporation. Therefore, there· is no substance in the preliminary
objection. [43·E·G)
2. (i) Where, as under the provisions of the Factories Act, it is
statutorily obligatory on the employer to provide and main·
H
taie canteen for the use of his employees, the canteen becomes
-
·-.I
. .J.
(ii)
(iii)
P. CHANDRA v. Ll.C..
37
a part of the establishment and, therefore, the workers A
employed in such canteen are the employees of the managemenL [58-E]
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 estahB
lisbment and the workers working in the canteen, the
employees of the managemenL The obligation to provide a
canteen bas 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. C
[58-F]
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, alld the provisions of the D
canteen may be held to have become a part of the senice
conditions of the employees. Whether the provision for canteen senices bas become a part of the senice conditions or
not, is a question of fact to be determined on the facts and
circumstances in each case. [58-G-H]
E
Where, to provide canteen services bas become a part of the senice
conditions of the employees, the canteen becomes a part of the establishment and the workers in such canteen become the employees of the
management. [59-B]
(iv) Whether a particular facility or service bas become .implicitly
a part of the service conditions of th• 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
F
the employees and the establishment, whether the service is
available as a matter of right to all the employees in thew · G
capacity as employees and nothing more, the number of
employees employed In the establishment and the number of
emplo~ who avail bf the service, the length of time for which
the senice has been continuously available, the bou:'S during
which it Is available, the nature and character of management, H
38
A
SUPREME COURT REPORTS
[1995] 3 S.C.R.
the interest taken by the employer in providing, maintaining,
supervising and controlling the service, the contribution made
by the management in the form of infrastructure and funds
for making the service available etc. [59-C·D]
The Ahmedabad ma11ufacturi11g a11d Calico Pri11ting Company, ltd.
B (Calico Mills) v. 771eir Workmen, (1953) II LU 647; Saraspur Mills Co. Ltd.
v. Rama11lal Chimanlal and Ors., [1974] 3 SCC 66; Elphinstore Spin11ing and
Weaving Mills Company Ltd. v. S.M. Sable and ni11e other Clerks (the
Bombay Taxtile Clerks Union, (1953) I LU 752; Dharangadhara Chemical
Works Ltd. v. State of Saurashtra, [1957] SCR 152; Cassidy v. Ministry of
C Health, (1951) 1 T.L.R. 539; Simmons v. Health Laundry Company, (1910]
1 K.B. 543; Basti Sugar Mills Ltd. v. Ram Ujagar and Others, [1963] 2 SCR
838; Hussainbhai, Calicut v. The Alath Factory Thozhilali Union, Kozhikode
and Others, (1978] 4 SCC 257; Workmen of the Food Coporation of India
v. Food Coporation of India, [1985] 2 SCC 136; MM.R. Khan and Ors. v.
Union of India and Ors., (1990] Supp. SCC 191; All India Institute
D Employees' Association v. Union of India, JT (1990) 1 S.C. 319 and Surendra
Prasad Khu&ral v. Chairman, MMT Coporation of India ltd., JT (1993) 5
SC 80, referred to
3. There is no dispute tl)at. the respondent-Corporation has not
E explicitly under taken i0· provide canteen services to its employees working
in the offices In question. The only obligation that it has explicitly accepted
was to provide to the employees. f~cilities to run canteen, such as premises,
furniture, electricity, water etc. Howe-fer, the facts on record show that the
Corporation had implicitly accepted the obligation to provide canteen
services and not merely the facilities to run the canteen. The facts on
F record 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. In the circumstances, the canteen has become a part of
the establishment of the Corporation. The canteen committees, the
G 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. Therefore, there
is no hesitation in coming to the conclusion that the canteen workers are
in fact the employees of the Corporation. (59-F, 66-H, 67-BJ
H
4. In view of the finding that the appellants are entitled to be the
,_ __
_1
P. CHANDRA v. L.l.C.
39
•
employees of the Corporation, they are entitled to the first relief they have A
claimed. They should be deemed to have become the regular employees of
the Corporation from the date of the filing of the writ petition before the
High Court and should, therefore, be paid the arrears of salary and other
monetary benefits, if any, from the said date after adjusting the salary and
monetary benefits that they may have received. The years of continuous
service put in by them even prior to the aforesaid date as canteen workers
should, however, be taken into account for the purpose of calculating their
retiral benefits. (67-D, 68-C]
5. However, there is distinction between the present service conditions
B
of the appellants and the other Class IV employees of the Corporation. It is C
not possible for the Court to evaluate the work done by each of the
categories. Hence different service conditions will have to he prescribed for
the different appellants. The Corporation may have, therefore, to prescribe
appropriate service conditions for the canteen workers. Pending the
prescription of such service conditions, the Corporation should pay to all
the appellants the minimum of the salary presently paid to its Class IV D
employees taking into consideration and making allowance for the special
facilities, if any, available to them and also their special working conditions.
In addition, the Corporation should also give them the benefit of the other
service conditions available to its Class IV employees. [67-E, G, H 68-A)
E
6. The above direction to treat the appellants as the regular
employees of the Corporation will be subject to two conditions, viz., (a) .
that they were above the minimum and below the maximum age limit and
medically fit as per the regulations of the Corporation on the date of the
filing of the writ petition and (b) that on the date of the filing of the writ
petition before the High Court, and also during the pendency of the F
~
proceedings, they had put In a minimum of three years continuous service
as canteen workers in the canteens in question. For the purposes of
calculating the said three years qualifying service and the retiral benefits,
the service prior to the attainment of the minimum qualifying age under
the Corporation's .regulations shall be Ignored. [68-D-E]
G
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1744 of
1992.
From the Judgment and Order dated 10.10.91 of the Calcutta High
Court in A. No. 655/89 (Mattar No. 2303/86).
H
B
40
SUPREME COURT REPORTS
(1995] 3 S.C.R.
•
V.M Tarkunde and S.K. Nandy with him for the Appellants.
G.L. Sanghi, H.K. Sil and Kailash Vasdev with him for the Respondents.
The Judgment of the Court was delivered by
SAWANT, J. The appellants-42 workmen· working in the canteen at
four different offices of the respondent • Corporation in Calcutta, are
involved in the : · ·esent proceedings. In 1985, they had approached this
Court for certair ·eliefs by a writ petition under Article 32 of the Constitution. By its ord · · of 19th July, 1986, this Court had directed them to
approach the Hi:. ~h Court. Hence they had withdrawn the writ petition with
liberty to move t.1e High Court under Article 226 of the Constitution, which
they did and the present appeal arises out of the said proceedings. Since
on behalf of the respondents an objection is raised that the appellants have
been claiming in these proceedings relief which they had never prayed for
in the writ petition before the High Court, we may at the outset summarise
the contents of the writ petition filed by them in the High Court.·
2. In para 2 of the writ petition, the appellants have averred that they
are canteen employees of the Corporation and working in the canteens
managed by the Corporation. In para 3, they have stated that they are
employed in the canteens of the Corporation and some of them for
decades, since the inception of the Corporation and others for a minimum
of seven years, and are holding the designations variously of Canteen
General Manager, Canteen Manager-cum-Salesman, Kitchen Clerk, Canteen Clerk, Halwai, Assistant Halwai, Cook, Bearer, Wash-boy and
F Sweeper etc. In para 4 they have specified the four departmental canteens
of the Corporation where they have been working. In para 5, they have
averred there that they are· paid at the rate much below the rate at which
canteen employees working under different Government departmental
canteens including those run by statutory Corporations and Railways are
paid. They have also stated there that the employees of the canteens in
G different Government offices and Railways throughout the country are
enjoying at least the pay-scales which are enjoyed by the peons of the
respective offices. In para 6, they have given the emoluments which the
Class-IV employees of the Corporation get which are between Rs. 700 and
800 per month against the wages they get as canteen employees ranging
H from Rs. 100 to Rs. 200 per month. In paras 7 and 16 of the writ petition,
-
,.,_
' .
-
P. CHANDRA v. L.l.C. [SAWANT,J.]
41
to quote them verbatim, it is then averred as follows :
"Your petitioners state that the employees and the staffs of the
respondent No. 1 at all its establishments are provided with
facilities of canteen by the respondents for more than few decades
A
and as such providing of canteen facilities forms a condition of
service of the employees and staffs of the respondent No. 1. Your B
petitioners state that by usage and customary benefits, canteen
facilities has become the condition of service of the employees of
the respondent no. 1 and as such running of the Canteen is
incidental to the running business and/or industry of the life
Insurance Corporation of India (Respondent No.l).
C
x
x
x
x
x
x
x
x
Your petitioners state that they are engaged in the work of the
canteen which is incidentally connected with the main industry of
the respondent no. 1 and as such they are workmen working under D
the respondent no.1."
It is against the background of the said averments in the main body
of the writ petition that in paragraph 18 thereof they have averred that the
respondent-Corporation being an instrumentality of the State and bellig the
State within the meaning of ruticle 12 of the Constitution, cannot deny E
them equal pay-scales with other canteen employees of the Government
departments/Railways and other statutory Corporations or take a stand or
policy different from that followed by the Government departments, Railways and other instrumentalities· of the State. With regard to pay-~cales of
the canteen employees, they have stated there that till date the respondentp
Corporation has not framed any pay-scale for the canteen employees and
as such have acted in a discriminatory manner violating Article 14 of the
Constitution. Thereafter, in ground No. 2 of the petition they have stated
that the canteen workers of the respondent-Corporation being engaged in
operation incidentally connected with the industry carried on by the
respondents, the respondents cannot deny them the minimum wages given G
to their employees. Jn ground No. 3 it is alleged that the canteen facility
being condition of service of the staff and employees of the respondentCorporation as per usage and custom, the appellants, being canteen
employees and engaged in operation incidentally connected with the industry carried on by the respondent, "automatically become the direct H
42
SUP RF.ME COURT REPORTS
[1995) 3 S.C.R.
A employees under the re;pondents and as such they cannot be discriminated
against and denied the minimum wages that is prevalent in the Life
Insurance Corporation. In ground No. 4, they have stated that the appellants are working under the respondents through the agencies, and being
engaged in work incidentally connected with the industry carried on by the
B Corporation, they are entitled to get the pay that is admissible to regular
employees of the Corporation. It is with these averments in the main body
of the petition and the grounds that the appellants have in prayer (b) of
the petition, claimed the relief of the issuance of the writ of mandamus
commanding the respondent-Corporation to comply with the policy of
"equal pay for equal work" and pay them the minimum salary that is
C enjoyed by the staff of the Corporation and also to follow the policy that
is prevalent for canteen workers in other Government departments, Railways and statutory Corporations. It is thus clear from the writ petition filed
by the appellants before the High Court that they have prayed for the relief
of mininrnm wages paid to the employees of the respondent-Corporation
D on •he ground that they are the regular employees of the Corporation. In
other words, it is implicit in the said relief claimed by them that they are
to be deemed to be the regular employees of the Corporation and paid the
minimum salary that is paid to its other regular employees.
3. The case of the respondent-Corporation before the learned Single
E
Judge of the High Court as made out in their counter to the writ petition
was that the canteens did not belong to it nor were they run by it. The
Corporation only gave its employees the facilities to run the canteens. The
canteens were run during different periods either by the canteen-committees of the staff of their cooperative society through the contractors, and
p
the appellants were engaged by the contractors or the cooperative society.
It has no connection much less contract of employment with the appellants.
Nor does it have any control over their working, conditions of service or
the termination of their services. They are, therefore, not the employees of
the Corporation and cannot be deemed to be so. Hence they are not
entitled to the relief claimed by them. The learned Single Judge by his
G decision of 27th September, 1989 allowed the writ petition and directed the
respondent-Corporation to implement the policy of equal pay for equal
work and pay the appellants minimum salary as is enjoyed by the regular
staff of the Corporation or such pay as is enjoyed by regular canteen
workers in the other Government establishments or public undertakings.
H The learned Judge also directed that the appellants shall be treated as
\
P. CHANDRA v. L.LC. [SAWANT.J.)
43
direct workers under the Corporation and shall be given all service benefits A
accordingly.
4. Against the said decision of the learned Single Judge, the respondent-Corporation preferred a Letters Patent Appeal before the Division
Bench of the High Court which by the impugned decision dated 10th
October, 1991, allowed the appeal, set aside the decision of the learned
Single Judge and dismissed the appellants' writ petition. It is this decision
of the Division Bench which is under challenge in the present appeal.
B
5. The questions to be answered· in this appeal, therefore, are : (i)
whether the appellants are or should be deemed to be the regular C
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.
·
6. A preliminary ob.jection was raised to the framing of the first issue D
by Shri Sanghi appearing for the respondent-Corporation, as pointed out
at the outset, that the appellants had not claimed any such relief in the writ
petition itself and hence they cannot widen the scope of the petition and
ask for the relief in question in this appeal. We have referred in extenso to
the averments made in this writ petition, earlier. They show in unmistakable
terms that the appellants approached the High Court with a specific plea E
that they are the employees of the respondent-Corporation and as such,
they should be paid the minimum wages which are being paid to its other
regular employees. The relief of minimum wages paid to the other regular
employees of the Corporation on the basis of the principle of equal pay
for equal work is thus claimed on the ground that they are also the reguhr
F
employees of the Corporation. Thus, the relief claimed includes in it the
basis of the relief, viz., their status as the regular employees of the Corporation. It is unnecessary to restate here the law regarding the interpretation of the pleadings. They have to be read as a whole and construed
accordingly. Thus construed, the relief claimed leaves no doubt that it is
based on the claim for the status of the regular employees of the Corpora- G
lion. We, therefore, find no substance in the preliminary objection.
4·
7. Coming now to the main question as to whether the appellants
should be deemed to be the regular employees of the Corporation, we may
first refer to the statutory provisions with regard to the canteen.
H
44
SUPREME COURT REPORTS
(1995] 3 S.C.R.
A
Section 46 of the Factories Act, 1948 which is a Central enactment
read as follows :
"46. Canteens. - (1) The State Government may make rules requiring that in any specified factory wherein more than two hundred
and fifty workers are ordinarily employed, a canteen or canteens
B
shall be provided and maintained by the occupier for the user of
the workers.
(2) Without prejudice to the generality of the foregoing power,
such rules may provide for -
C
(a) the date by which such canteen shall be provided ;
D
E
F
G
H
(b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen;
(c) the foodstuffs to be served therein and the charges which may
be made therefor;
( d) the constitution of a managing committee for the canteen and
representation of the workers in the management of the canteen;
( dd) the items of expenditure in the running of the canteen which
are not to be taken into account in fixing the cost of foodstuffs and
which shall be borne by the employer;
( e) the delegation to the Chief Inspector, subject to such conditions
as may be prescribed, of the power to make rules under clause
(c)."
This provision has to be read with the relevant provisions of Section
.>-
47 (1) of the said Act which are as follows :
"47. Shelters, rest rooms and lunch rooms. - (1) In every factory
wherein more than one hundred and fifty workers are ordinarily
employed, adequate and suitable shelters or rest rooms and a
suitable lunch room, with provision for drinking water where
workers can eat meals brought by them, shall be provided and
maiiitained for the use of the workers;
Provided that any canteen maintained in accordance with the
--
+
P. CHANDRA v. L.l.C. (SAWANT,J.]
45
provisions of Section 45 shall be regarded as part of the requireA
ments of this sub-section : "
There is no dispute that the Factories Act is not applicable to the
offices of the 'respondent-Corporation. What is applicable is the West
Bengal Shops and Establishment Act which is a State enactment. However,
there is no provision in the said Act with regard to canteens.
8. We may now refer to the law on the subject as is evolved through
various judicial decisions.
B
In the Ahmedabad Manufacturing and Calico Printing Company Ltd.
C
(Calico Mills) v. 11ieir Workmen, (1953) II LU 647, which is a de, ·ion of
the Labour Appellate Tribunal of India and which is quoted approvingly
in Saraspur Mills Co. Ltd. v. Raman/al Chimanlal and Ors., (infra), the
facts were that by notifications issued by the State Government, the
provisions of Section 46 of the FactOiies Act, 1948 were made applicable D
to a large number of textile mills including the appellants before the
Triburlal. As a result, it was compulsory for the mills to maintain suitable
canteens for the use of their workmen. The contention of the appellantMills was that assuming that the canteens were run through the contractors,
the canteen was not a part of the undertaking so as to render the management responsible for the wages and dearness allowance of the staff of the E
canteen and that the maintenance of the canteen was not in the course of,
or for the purpose of conducting the undertaking. The Tribunal held that
in view of the statutory obligation cast on the mills to run the canteen, the
running of the canteen was a part of the undertaking. For this purpose, the
Tribunal also relied upon the decision of its Special Bench in E/phinstone p
Spinning and Weaving Mills Company Ltd. v. S.M. Sable and nine other
Clerks (the Bombay Textile Clerks' Union), (1953) I LU 752 where the
Tribunal had considered the case of employees of the grain shops run in
the Mills by the contractors. The Special Bench had held. there that the
employees of the grain shops were entitled to be regarded as the employees G
of the Mills since the running of the grain shop had become a part of the
undertaking within the meaning of the definition of 'employer' in sub-section (14) (e) of Section 3 of the Bombay Industrial Relations Act. The
Tribunal held that there was a considerable similarity between the grain
shop and the canteen for the purposes of the said definition. The Tribunal
overruled the contention that the earlier decision of the Special Bench was H
46
SUPREME COURT REPORTS
(1995] 3 S.C.R.
A erroneous and needed further consideration.
In Dharangadhara Chemical Works Ltd. v. State of Saurashtra, (1957)
SCR 152, the question was whether the agarias who were engaged by the
manufactures of salt were the workmen of the manufactures or whether
B they were independent contractors. The facts were that the appellantmanufacturers were the lessees holding licences for the manufacture of salt
on the demis,·d land. The salt was manufactured by a class of professional
labourers known as agarias from rain water that got mixed up with the
saline matter in the soil. The work was seasonal in nature and commenced
in October after the rains and continued till June. Thereafter, the agarias
C left for their own villages for cultivation work. The demised lands were
divided into Plots called pattas and allotted to the agarias with a sum of
Rs. 400 for each patta to meet the initial expenses. The same patta was
generally allotted to the same agaria every year and if the patta was
extensive in area, it was allotted to two agarias. After the manufacture of
D salt, they were paid 5 as. 6 pies per maund. At the end of each season,
accounts were settled and they were paid the balance due to them. They
worked with the members of their families and were free to engage extra
labour on their own account and the manufacturer had no concern therewith. No hours of work had been prescribed, no muster rolls maintained
nor were working hours controlled by the appellants. There were no rules
E as regards leave or holidays and they were free to come or.t of the works
after making arrangements for manufacture of salt. On these facts, the
Industrial Tribunal found that the agarias were workmen within the meaning of the Industrial Disputes Act, 1947. This finding was confirmed by the
High Court which also held that the reference of the dispute made by the
F Government under Section 10 of the Industrial Disputes Act was competent. This Conrt while confirming the finding of the Industrial Tribunal
and of the High Conrt, held that it was well-settled that the Prima facie
test of the relationship of master and servant was the existence of the right
in the employer not merely to direct what work was to be done but also to
control the manner in which it was to be done, the nature and extent of
G such control varying in different businesses and being by its very nature
incapable of being precisely defined. The correct approach is to consider
whether having regard to the n~ture of the work, there is due control and
supervision of the employer. A person could be workman every though he
did piece work and was paid not per day but by the job, or employed his
H own workmen and paid them for it. The Court noted the observations of
P. CHANDRA v. L.1.C. [SAWANT,J.]
47
Somervell, LI, in Cassidy v. Ministry of Health, (1951) 1 T.L.R. 539, which A
had taken the view that it was not necessary for holding that a person was
an employee that the employer should be proved to have control over his
work. The test of control was not one of universal application and there
were many contracts in which the master could not control the manner in
which the work was done. The correct approach would be to consider
B
whether having regard to the nature of the work, there was due control
and supervision by the employer. The Court quoted the opinion
of
Fletcher Moulton, L.J., in Simmons v. Health Laundry Company, (1910) 1
-,
K.B. 543 where the learned Judge has observed as follows :
.,,.
"In my opinion it is impossible to lay down any rule of law C
distinguishing the one from the other. It is a question of fact to be
decided by all the circumstances of the case. The greater the
amount of direct control exercised over the person rendering the
services by the person contracting for them the stronger the
grounds for holding it to be a contract of service, and similarly the
greater the degree of independence of such control the greater the D
probability that the services rendered are of the nature of professional services and tha_t the contract is not one of service.n
The Court then observed that the broad distinction between a
workman and an independent contractor lies in this that while the former
E
agrees himself to work, the later agrees to get other persons to work. A
person who himself agrees to work and does so work and is, therefore a
workman, does not ceases to be such by reason merely of the fact that he
gets other persons also to work along with him and those persons are under
his control and are paid by him. What determines whether a person is a
F
workman or an independent contractor is whether he has agreed to work
personally or not. If he has, then he is a workman and the fact that he gets
the assistance from other persons would not affect his status.
In Basti Sugar Mills Ltd. v. Ram Ujagar and Others, (1%3] 2 SCR 838,
the r.ase of the appellant-employer was that the work of the removal of the G
press mud had been given by it to a contractor and the respondentworkmen were employed by that contractor to do that work. It is the
contractor who had terminated their services and the management had
nothing to do with the workmen who had approached the Court for relief
against the termination of their services and also for paying them the H
48'
SUPREME COURT REPORTS
[1995] 3 S.C.R.
A nummum wages prescribed under the Government notifications. This
Court held that the workmen were persons employed in the industry to do
manual work for reward Further, the appellant-Company was their
employer as the workmen were employed by the contractor with whom the
company had contracted in the course of conducting the industry for the
execution by the said contractor, of the work of removal of press mud
B which is ordinaril¥ part of the industry. The Court also held that the
expression "employed by thr factory" which occurred in the definition of
'workman' in 'the standing Orders applicable to the company, included
every person who was employed to do the work of the factory and was wide
enough to include the workmen employed by the contractor of the factory
C also.
[n Saraspur Mills Co. Ltd. v. Raman/al Chimanlal and Ors., [1974] 3
SCC 66, the facts were that the appellant- Company which was re~ponsible
for maintaining the canteen under the provisions of Section 46 of the
D Factories Act and the rules made thereunder, had entrusted the task of
running the canteen to a co-operative society. The society employed the
respondent- workmen in the canteen. The workmen filed an application
before the Labour Court under the Bombay Industrial Relations Act, 1946
making a grievance that they were not paid wages and dearness allowance
in accordance with the award of the Industrial Tribunal. In support of their
E claim, the workmen alleged that they become workers of the appellant, who
was bound to pay wages and dearness allowance as per the award. Since
the appellant was running the canteen under an obligation to do so under
the Factories Act, the running of the canteen was ordinarily a part of the
undertaking although the appellant did not itse:f run the canteen but
F
handed over the premises to the co-operative society to run it for the use
and welfare of the company's employees and to discharge it legal ol:ligation. The appellant had resisted the claim by contending that the workmen
had never been employed by it or by its agent or contractor. They were in
fac~ employed by the Co-operative society which was its licensee. The
Labour Court dismissed the workers' claim. However, in appeal, the InG dustrial Court allowed the claim by holding that the employees of the cooperative society were the employees of the appellant. This Court referred
to the amended definition of 'employee' and employer' in Section 3 (13)
and 3 (14) of the Bombay Industrial Relations Act which read as follows :
H
"(13) 'employee' means any person (including an apprentice)
-
- --<.
P. CHANDRA v. L.1.C. (SAWANT,J.]
49
employed in any industry to any skilled or unskilled manual, A
supervisory, technical or clerical work for hire or reward, whether
the terms of employment be express or implied and includes-( a)
a person employed in the execution of any work in respect of which
the owner of an undertaking is an employer within the meaning Of
sub-clause (e) of clause (14).
xxxxxxx
(14) 'employer' includes -
xxxxxxx
(a) Where the owner of any undertaking in the course of or for
the purpose of conducting the undertaking entrusts the execution
of the whole or any part of any work which is ordinarily a part of
the undertaking, to any person otherwise than as the servant or
B
c
agent of the owner, the owner of the undertaking."
D
'rhe Court also referred to the definition of 'worker' under the
Factories Act, 1948. The Court then referred to its earlier decision in Basti
Sugar Mills Ltd. v. Ram Ujagar and Others, [1963] 2 SCR 838 and held that
since under the Factories Act, it was the duty of the appellant to run and
maintain the canteen for use of its employees. The ratio of the decision in E
Ahmedabad Mfg. and Calico Printing Co. Ltd. & Others v. Their Workmen,
(1953) II LLJ 647, would be fully applicable in which the very same
provisions of the Act were considered and confirmed the finding of the
Industrial Court.
In Hussainbha~ Calicut v. The Alath Factory Thozhilali Union, Kozhikode and Others, [1978] 4 SCC 257, the facts were that the petitioner was
a factory owner manufacturing ropes. A number of workers were engaged
F
by him to make ropes. According to the petitioner, they. were hired by
contractors who had executed agreements with the petitioner to get the
work done. Out of the workmen engaged by the contractor, 29 were denied G
employment. They raised an industrial dispute which was referred by the
State Government to the Industrial Tribunal. The Tribunal upheld the
contention of the workmen that they were the employees of the petitioner
and directed their reinstatement. The award of the Tribunal was upheld by
the learned Single Judge of the High Court as well as by the Division Bench H
50
SUPREME COURT REPORTS
(1995) 3 S.C.R.
A in appeal. This Court while dismissing the employer's petition ·at th"
admission stage itself with an elaborate judgment, held that the work done
by the workmen was an integral part of the industry. The raw material was ·
supplied by the management. The factory premises as well as the equipment used belonged to the management and even finished product was
B taken by the management for its own trade. Defective articles were
directed to be rectified by the management. The workmen were broadly
under the control of the management. On these facts, the Court held that
where a worker or a group of workers, labours to produce goods or services
and these goods or services are for the business of another, that other is
in fact, the employer. He has economic control over the workers' subsisC tence, skill and continued employment. If he for any reason, chokes off,
the workers are virtually laid of.