-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. APPEAL NO.174 OF 1997 IN WRIT PETTION NO.408 OF 1996 1. Oil & Natural Gas Commission having its office at 2/4, Vasudhara Bhavan, Bandra (E) Bombay 400 051. .. Appellant (Orig.Respondent No.1) v/s. 1. The Petroleum Employees Union being a registered trade Union having its offie at Tel.Rasayan Bhavan, Tilak Road, Dadar (E), Bombay 400 014. 2. General Employees Association being a registered trade union, having its office at Tel.Rasayan Tilak Road, Dadar (E), Bombay 400 014. 3. Union of India (through the Sectetary, Government of India, Ministry of Labour, New Delhi. 4. The Secretary, Central Advisory Contract Labour Board, New Delhi. (Notice to be served on Central Government Advocate, Ministry of Law & Lagal Affairs, Ayakar Bhavan, Bombay 400 020. 5. Regional Labour Commissioner (C), Wakefield House, Ballard Estate, Bombay 400 038. 6. M/s.ONGC Co-op. Consumer Society Ltd. ONGC, Uran, Raigad. 7. M/s.Asha Caterers, ONGC, Vasundhara Bhawan, Bandra (E), Bombay 400 051. 8. Mr.Y.Baburao, ONGC, Andheri, Bombay 400 099. -2- 9. Shri Shekhar N.Poojari, C/o.ONGC T & S Office, Calicat Street, Bombay 400 038. 10.Shivam Caterers, Nariman Point, Bombay- 400 021. .. Respondents (Orig.Petitioners No. 1 & 2 and ors.) Mr.J.P.Cama, Senior Counsel with Mr.S.A.Bhalwal i/by M/s.Vyas & Bhalwal for the appellant. Mr.S.S.Pakale for the respondent No.1. CORAM : R.M. LODHA & D.G. KARNIK, JJ. DATED : 29th November, 2005/ 1st December, 2005 ORAL JUDGMENT (Per R.M. Lodha, J.) Oil & Natural Gas Corporation Limited (for short ‘the Corporation’) is in appeal aggrieved by the order of the learned Single Judge dated January 13, 1997 whereby the Corporation has been directed to absorb the canteen workers at serial Nos.1 to 48 and 50 to 52 in Exhibit "A" annexed with the writ petition from the date of filing of the petition. 2. The Petroleum Employees Union and General Employees Association - respondent Nos.1 and 2 (for short ‘the Union’) filed the writ petition before this court interalia, praying for absorption and regularisation of the employees as shown in Exhibit "A" to the petition employed in the canteens in the establishment of the Corporation. The case set up by the Union in the writ petition was that the -3- Corporation has the canteens situated at LPG Plant, Uran, Exploration Business Offices, Priyadarshani and Andheri and Transportation and Shipping Office, Ballard Pier for the benefit of its workers. The LPG Plant, Uran is the factory under the Factories Act and the Corporation is obligated to provide canteen there under section 46 of the Factories Act. The statutory canteen at LPG Plant, Uran as well as the other canteens under reference, though are looked after by the contractors, the entire management, control and supervision is with the Corporation and the contractors are only paper agents. The Union averred that the furniture, utensils, groceries, gas equipment etc., which are necessary for running the canteen are provided by the Corporation; water and electricity bills are paid by the Corporation and the cost of the uniform supplied to the canteen workers is reimbursed by the Corporation. 3. The Corporation contested the writ petition and disputed the claim of the Union that the contract workers were the employees of the Corporation The case was set up by the Corporation that though the canteen run at LPG Plant, Uran is the statutory canteen within the meaning of section 46 of the Factories Act, however, for running the said canteen, the contractor has been appointed genuinely and the workers employed by the said -4- contractor are the employees of the contractor and not the employees of the Corporation. They cannot claim any absorption and regularisation in the Corporation. As regards the other canteens at Exploration Business office at Priyadarshani and Andheri and Transportation and Shipping office at Ballard Pier, the case was set up that these canteens were non-statutory canteens and that the Corporation has legal right to withdraw the said canteen facilities at any time looking to the exigencies of the business. The Corporation raised the objection that the writ petition involved serious disputed questions of fact which cannot be conveniently gone into in the extraordinary jurisdiction under Article 226 of the Constitution of India. 4. The learned Single Judge before whom the writ petition came up for consideration was of the view that the workers in the statutory canteen were entitled to absorption in view of the decision of the Supreme Court in the case of Parimal Chandra Raha and ors. v. Life Insurance Corporation of India and ors. 1995 Supp (2) SCC 611. What the learned Single Judge did was, passed an order of absorption as regards the workers engaged in the statutory canteen at LPG Plant, Uran and issued rule concerning the workers engaged in the canteens other than statutory canteen. The extent of the -5- order which is challenged in the present appeal reads thus: was concerned, passed the following order:- "By this petition under article 226 of the Constitution, two trade unions are seeking directions to the Oil & Natural Gas Commission (ONGC) for absorption of the contract workmen engaged by the corporation in canteens in various establishments of the corporation. Amongst those canteens, the canteen at the ONGC, LPG plant is admittedly a statutory canteen. The contract workmen working in the said canteen are entitled to absorption in view of the decision of the Supreme Court in Parimal Chandra Raha & ors. vz. Life Insurance Corporation of India & Ors. (1995 II CLR 194). Dr.Chandrachud brought to my notice the order passed by the Supreme Court in Special Leave to Appeal (Civil) No.10125 of 1996 dated 13th September, 1996 (Hindustan Petroleum Corporation vs. Genl.Employees’ Asson. & Ors.). In that case the Supreme Court has laid down certain further conditions for absorption of such employees. On going through the list of contract it is seen that the workmen listed at serial Nos.1 to 52 in Exh."A" are working in the statutory canteen, LPG plant, Panvel. Excepting one workmen, namely, Sr.No.49 who was appointed as helper in March, 1995, all other workmen are eligible even as per the condition laid down by the Supreme Court. In that view of the matter, the corporation is directed to absorb the canteen workers at serial Nos.1 to 48 and 50 to 52 from the date of filing of the petition. The arrears of differential wages from February, 1996 to be paid within six weeks from today." 5. Mr.J.P.Cama, the learned Senior Counsel for the Corporation vehemently contended that the learned Single Judge erred in directing the absorption of -6- the canteen workers employed by the contractor/s in the statutory canteen. He would contend that based on the decision of the Supreme Court in the case of Parimal Chandra Raha, the declaration of relationship of the employer and employee could only have been given by the learned Single Judge for the purposes of the Factories Act and not for all other purposes. He referred to the decisions in M.M.R.Khan v. Union of India, AIR 1990 SC 937; Employees in Relation to the management of Reserve Bank of India v. Workmen, (1996) 3 SCC 267; Indian Overseas Bank v. IOB Staff Canteen Workers Union, AIR 2000 SC 1508, State Bank of India and others v. State Bank of India Canteen Employees Union, (2000) 5 SCC 531 and Workmen of Nilgiri Cooperative Marketing Society Ltd. v. State of Tamil Nadu (2004) 3 SCC 514 and placed heavy reliance on the decision in Indian Petrochemicals Corporation Ltd. v. Shramik Sena (1999) 6 SCC 439 and Haldia Refinery Canteen Employees Union v. Indian Oil Corporation (2005) 11 CLR 457. 6. On the other hand, Mr.S.S.Pakale, the learned counsel for the Union would urge that while admitting the appeal, the Division Bench confined the hearing of the appeal only consider as to whether the absorption and the regularisation of the concerned workmen must be subjected to the conditions laid down in paragraphs 32, 34 and 35 of -7- the decision in Parimal Chandra Raha and the order in the case of Hindustan Petroleum Corporation. The learned counsel for the Union would urge that the controversy as to whether the absorption and the regularisation of the concerned workmen was only for the purposes of the Factories Act and not for all purposes, has not been kept open for consideration by the order dated 16th July, 1997. He voluntarily submitted that at this distance of time, he would not like to enter into the legal debate whether the absorption/regularisation of the concerned workers could be subjected to the conditions laid down in paragraphs 32, 34 and 35 in the case of Parimal Chandra Raha and as ordered in the case of Hindustan Petroleum Corporation; rather he accepts the conditions laid down in paragraphs 32,34 and 35 in Parimal Chandra Raha and also the directions given in the case of Hindustan Petroleum Corporation v. General Employees Association and ors. in Special Leave Petition No.10125 of 1996. Mr.S.S. Pakale submitted that the order of absorption passed by the learned Single Judge is in conformity with law laid down by the Supreme Court in the cases of Saraspur Mills Co.Ltd. v. Raman Lal Chiman Lal and others, air 1973 sc 2297; Parimal Chandra Raha (supra); VST Industries Ltd. v. VST Industries Workers Union (2001) 1 SCC 298; Steel Authority of India v. National Union Water Front Workers, AIR 2001 SC -8- 3527; National Thermal Power Corporation Ltd. v. Karri Pothuraju and others, (2003) AIR SCW 3976 and Mishra Dhatu Nigam v. M.Venkataiah, AIR 2003 SC 3124. 7. We shall first refer to the judicial decisions cited at the bar; these are from the highest court of the land. 8. In the case of Saraspur Mills the question before the Supreme Court was whether the canteen workers employed by the Co-operative Society could be treated as employees of the Mill within the meaning of relevant provisions of Bombay Industrial Relations Act, 1946 for the purpose of payment of their wages inspite of the fact that they were employees of the Co-operative Society and were being paid wages by the society. While dealing with the said question, the Supreme Court held that section 46 of the Factories Act casts obligation on the company that runs canteen in the factory to maintain a canteen for its employees. The Co-operative Society was entrusted to run the canteen on its behalf by the company and the workers employed by the Co-operative society became the employees of the mill for the purpose of emoluments and other ancillary benefits. 9. M.M.R. Khan (and other petitioners) approached -9- the Supreme Court directly by filing the writ petitions where the relief claimed was that the workers working in the canteens in the establishments of railways be declared as railway employees and extended all service conditions which were available to the railway employees. The canteens were classified by the Supreme Court in three categories viz. (i) Statutory Canteens; (ii) Non-statutory Recognised Canteens and (iii) Non-statutory Non-Recognised Canteens. In relation to the Statutory Canteens, the Supreme Court held that the employees in the statutory canteens were railway employees for the purpose of Factories Act. The Supreme Court then dwelt upon the question whether the said employees were employees for all purposes and held so purely on facts peculiar to them. The three Judge Bench also held that the workers engaged in non-statutory recognised canteens in the Railway Establishments are railway employees. The third category is not relevant for the present case and hence we do not deem it necessary to deal with this case further. 10. In the case of Parimal Chandra Raha, the Supreme Court was concerned with the workers of contractor-run non-statutory recognised canteens at different offices of the Life Insurance Corporation of India in Calcutta. The question raised before the Supreme Court was whether those workers were or -10- should be deemed to be regular employees of the Life Insurance Corporation of India, and if yes, what pay scales and other service conditions they were entitled to. The workers claimed parity in wages with other regular employees of the Corporation. The Supreme Court referred to the large number of cases; (i) Ahmedabad Manufacturing and Calico Printing Co.Ltd. (Calico Mills) v. Workmen, (1953)2 LLJ 647; Saraspur Mills Co.Ltd. (Supra), Elphinstone Spg. and Wvg. Mills Co.Ltd. v. S.M.Sable (Bombay Textile Clerks’ Union) (1953) 1 LLJ 752; Dharangadhara Chemical Works Ltd. v. State of Saurashtra, AIR 1957 SC 264; Basti Sugar Mills Ltd. v. Ram Ujagar, AIR 1964 SC 355; Hussainbhai v. Alath Factory Thezhilali Union, (1978) 4 SCC 257; Workmen v. Food Corpn. of India, (1985) 2 SCC 136; M.M.R.Khan (supra); All India Railway Institute Employees’ Association v. Union of India (1990) 2 SCC 542 and Surendra Prasad Khusgal v. Chairman, M.M.T. Corpn. of India, 1994 Supp (1) SCC 87 and in the light of the afore-noticed judicial decisions and statute law culled out the legal position in paragraph 25 of the report thus- "(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. -11- (ii) Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer to provide a canteen, the canteen becomes a part of the establishment and the workers working in the canteen, the employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the establishment. (iii) The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicitly accepted by or cast upon the employer either by an agreement or an award, etc., it may be inferred from the circumstances, and the provision of the canteen may be held to have become a part of the service conditions of the employees. Whether the provision for canteen services has become a part of the service conditions or not, is a question of fact to be determined on the facts and circumstances in each case. Where to provide canteen 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 controlling the service, the contribution made by the management is the form of -12- infrastructure and funds for making the service available etc." 11. The case of Reserve Bank of India travelled to the Supreme Court through the adjudicatory path. The industrial dispute was referred for adjudication to the Industrial Tribunal as to whether 166 employees engaged in various catering establishments of the Reserve Bank of India at Bombay are the workmen of the Reserve Bank of India and if so, whether their demand for regularisation with retrospective effect was justified. The issue before the Supreme Court was whether the Tribunal on the basis of the material rightly held that 166 persons mentioned in the list attached to the reference and employed in various canteens of the Reserve Bank of India were entitled to absorption and other incidental reliefs. The Supreme Court referred to its earlier decisions and held that the ratio laid down in M.M.R.Khan was not applicable. The reasons for holding so was that the bank had only a limited role to play in the functioning of the implementation committee (canteen committee) and did not have any control on the employees engaged by the committee. It was held that there was no right in the bank to supervise and control the work done by the persons employed in the committee nor had the bank any right the manner in which the work was to be done. The bank was found to have no right to take any disciplinary action -13- nor direct any canteen employee to do a particular work. The Supreme Court, thus, overturned the decision of the Industrial Tribunal. The argument on behalf of the bank that the propositions (iii) and (iv) as propounded in the case of Parimal Chandra Raha required to be clarified and modified, did not find favour with the Supreme Court as it was not considered necessary to do so. 12. The three Judge Bench of the Supreme Court in the case of Indian Petrochemicals Corporation Ltd. (IPCL) adverted to earlier judgments in the case of M.M.R.Khan, Parimal Chandra Raha and Reserve Bank of India and in paragraphs 19 and 22 of the report observed thus- "19. Based on the above, Shri Singhvi contends that once an employee is found by this Court to be an employee of the Management because of the Factories Act, he becomes the employee of the Management for all purposes. Per contra on behalf of the Management, it is contended that a reading of the judgment in Raha case in its totality shows that what this Court intended to lay down as law was that the employees working in a statutory canteen would become employees of the Management not for all purposes but for the limited purpose of the Factories Act. It is to be noted that in Raha case this Court did not specifically hold that the deemed employment of the workers is for all purposes nor did it specifically hold that it is only for the purpose of the Factories Act. However, a reading of the judgment in its entirety makes it clear that the deemed employment is only for the purpose of the Factories Act. This Court in Raha case relied upon an earlier judgment of this Court in M.M.R. Khan v. Union of India. A three-Judge Bench of -14- this Court considering the provisions of the Factories Act held that by virtue of Section 46 of the said Act the factories covered by the said Act are obligated to provide canteen services and termed such canteens as statutory canteens......... ............ 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." 13. In the case of Indian Overseas Bank, the issue before the Supreme Court was whether the 33 canteen employees of Indian Overseas Bank staff canteen were the employees of the Indian Overseas Bank. The Supreme Court referred to its earlier decisions in the case of IPCL, Reserve Bank of India, Parimal Chandra Raha and M.M.R. Khan and held in paragraphs 15, 21 and 22 of the report thus- "15. In Indian Petrochemicals Corporation Ltd. v. Shramik Sena, (1999) 6 SCC 439: (1999 AIR SCW 2740 : AIR 1999 SC 2577 : 1999 Lab IC 3078) the claim of workmen of statutory canteen managed by a Contractor fell for consideration and while explaining LIC case (1995 AIR SCW 2609 : AIR 1995 SC 1666 : 1995 Lab IC 2064) (supra) and following the decision in MMR Khan’s case (AIR 1990 SC 937) (supra) and Reserve Bank’s case (supra), it was held that the deemed employment of such workers is only for the purposes of the Factories Act and not for all purpose, because the -15- Factories Act, as such, does not govern the rights of employees with reference to recruitment seniority, promotion, retirement benefits etc., which invariably and otherwise are governed by other Statutes, Rules, Contracts or Policies. Consequently, it was observed, the contention of the workmen that employees of a statutory canteen ipso facto became the employees of the establishment for all purposes, cannot be accepted and the said question depended upon the further and other materials placed on record, which when cumulatively considered in that case, established the factual position that: "(a) The canteen has been there since the inception of the appellant’s factory. (b) The workmen have been employed for long years and despite a change of contractors the workers have continued to be employed in the canteen. (c) The premises, furniture, fixture, fuel, electricity, utensils etc. have been provided for by the appellant. (d) The wages of the canteen workers have to be reimbursed by the appellant. (e) The supervision and control on the canteen is exercised by the appellant through its authorised officer, as can be seen from the various clauses of the contract between the appellant and the contractor. (f) The contractor is nothing but an agent or a manager of the appellant, who works completely under the supervision, control and directions of the appellant. (g) The workmen have the protection of continuous employment in the establishment." 21. The decision in Indian Petrochemical’s case (1999 AIR SCW 2740 : AIR 1999 SC 2577 : 1999 Lab IC 3078) (supra) does not, in our view, lay down any different criteria than those declared in the other decisions for adjudging the issue, except that it had also considered specifically the further question as to the effect of a declaration, that the -16- workers of a particular canteen, statutorily obligated to be run render no more than to deem them to be workers for the limited purpose of the Factories Act and not for all purposes. In the case before us, the claim is not that there was any such statutory obligation and the entire consideration proceeded only on the footing that it is a non-statutory recognised canteen falling within the second of the three categories envisaged in the earlier decisions and the Tribunal as well as the Division Bench of the High Court endeavoured to find out whether the obligation to run was explicit or implicit on the facts proved in this case. "22. The factual findings recorded by the Tribunal and the Division Bench as also the materials relied upon therefor, have been already set out in detail, supra and it is unnecessary to refer to them in greater detail once over again. The canteen in question was being run from 1.1.73 and even before that, undisputably, the Bank itself had arranged for running of the same through a contractor and similar arrangement to run through a contractor was once against made by the Bank on its closure on 26.4.90, though after a period of some break from 21.10.92. Besides this, the nature and extent of assistance, financial and otherwise in kind, provided which have been enumerated in detail, would go to establish inevitably that the Bank has unmistakably and for reasons obvious always undertaken the obligation to provide the canteen services, though there may not be any statutory obligation and it will be too late to contend that the provision of canteen had not become a part of the service conditions of the employees. The materials placed on record also highlight the