IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 9.3.2010 CORAM: THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.Nos.19638 to 19640 of 2000 1. The Chief General Manager Madras Telephones Madras – 600 010. 2. The Traffic Superintendent TMX Canteen, Madras Telephones Madras. . . Petitioners in all WPs. Vs. 1. The Industrial Tribunal Tamil Nadu, High Court Buildings Chennai – 600 104. .. 1st respondent in all WPs. 2. D.Edward .. 2nd respondent in WP:19638/2000 3. B.Soundararajan .. 2nd respondent in WP:19639/2000 4. R.Rathinam .. 2nd respondent in WP:19640/2000 PRAYER: Petitions under Article 226 of the Constitution of India for issue of writ of Certiorari to call for the records of the first respondent in relation to the award dated 22.5.2000 in I.D.Nos.69, 66 and 70 of 1998 and quash the same. For Petitioners : Mr.S.Udayakumar, ACGSC in all WPs. For 2nd respondent : Mr.R.Rengaramanujam in all WPs. ORDER These three writ petitions were filed by the Chief General Manager, Madras Telephones, Chennai – 600 010, which is now made into https://hcservices.ecourts.gov.in/hcservices/ a Corporation, namely Bharat Sanchar Nigam Limited. The three writ petitions challenge the award passed by the first respondent/Industrial Tribunal dated 22.5.2000 made in I.D.Nos.69, 66 and 70 of 1998 respectively. By the impugned award, the Industrial Tribunal directed reinstatement of the contesting second respondents with back-wages and continuity in service and other attendant benefits. 2. This Court admitted these writ petitions on 23.11.2000 and granted interim stay. Subsequently, when the contesting second respondents filed petitions, this Court passed a common order dated 18.2.2005, by which the petitioner/management was directed to deposit the entire arrears of back-wages to the credit of various Industrial Disputes and on such deposit, the contesting respondents were permitted to withdraw 50% of their share and the balance amount was directed to be kept in fixed deposit in a nationalised bank initially for a period of three years and subsequently to be renewed, pending disposal of the writ petitions. The contesting respondents were permitted to withdraw quarterly interest from the bank. With reference to the payment under Section 17-B of the Industrial Disputes Act (for brevity, "the Act"), the petitioner/management was directed to pay Rs.2400/- per month from the date of termination, namely 20.1.1995, and continue to pay the same till the disposal of the writ petitions. It is claimed by both sides that the interim order has been complied with by the petitioner/management. 3. The three petitioners raised industrial disputes before the Assistant Labour Commissioner, Central and since the said Conciliation Officer could not bring about mediation, he sent a failure report to the Government of India. The Government of India, Ministry of Labour, by their order dated 10.3.1998, referred the three disputes for adjudication by the first respondent/Industrial Tribunal. The reference made under Section 10(1) of the Act was whether the action of the Chief General Manager, Madras Telephones and Traffic Superintendent, TMX Canteen, Madras Telephones in terminating the services of the contesting respondents, who were casual labourers, with effect from 20.1.1995 was legal and justified and if not, to what relief the workmen are entitled to. 4. On receipt of the reference, the Tribunal issued notice to the parties. Thereafter, each of the contesting respondents filed a claim statement before the Industrial Tribunal during August, 1998. The petitioner/management filed a written answer statement during August, 1999. Before the Tribunal, each of the workman examined themselves as W.W.1 and on the side of the petitioner/management, one L.Sivaraman was examined as M.W.1. While the workmen produced pay slips for the month of November, 1999, which was marked as Ex.W1 series, on the side of the petitioner/management, two documents were https://hcservices.ecourts.gov.in/hcservices/ filed and marked as Exs.M1 and M2. Ex.M1 relates to the working day particulars and Ex.M2 relates to vouchers. 5. On an overall consideration of the materials placed before it, both oral and documentary, the Tribunal came to the conclusion that the petitioner/management is running a canteen in their office premises in which originally 1500 workers are employed and though not a statutory canteen, it is a facility/amenity given to the workmen. The Tribunal, after referring to various decisions of the Supreme Court and this Court relating to statutory canteen/unit run canteen/non-statutory canteen, came to the conclusion that the workmen are employees of the petitioner/management irrespective of the fact whether they are employed by the contractor or by the co- operative society. 6. In the present case, the petitioner/management, in their counter statement, did not plead that the contesting respondents were employed by any contractor or through any co-operative society. On the other hand, their only contention was that the total number of office staff in the telephone house, which was originally 1500, came down to 700 due to the change in technology and the advancement of science and therefore, necessarily the strength of the canteen staff was also reduced. It is also stated that the circular dated 20.1.1992 will not apply to the case of the contesting respondents and the workmen were engaged during short duration and payment was made on contract basis from the proceeds of the canteen and the said practice was not continued beyond August, 1996. It was also argued by them that the contesting respondents were not signing any muster roll, they did not receive salary from the department fund and they are only casual labourers. On the allegation of the workman that, after stopping the contesting respondents, the petitioner/ management had engaged M/s.Loganathan, Rajini, Selvaraj, Rajalakshmi and Lakshmi, the petitioner/management stated that they were staff deputed from other units to work in the canteen and so far as Lakshmi is concerned, she was transferred back to her original unit. It is stated that such deployment arose due to the exigencies on account of heavy absenteeism and specific extra work. 7. But, the Industrial Tribunal found that by the employment of such permanent staff, the Department was paying as much as 800 hours of over time every month to the canteen staff and the salary for overtime for every one hour was Rs.15.65 and if these three contesting respondents were engaged, the amount to be paid to them will be only a fraction of the amount that is spent by the petitioner/management for the regular workers. Therefore, the Tribunal held that the termination of these three contesting respondents was illegal and the retrenchment was malafide and not required to be adopted by the petitioner/management. It is in that view of the matter, the Tribunal held that the non-engagement of the https://hcservices.ecourts.gov.in/hcservices/ three contesting respondents would amount to retrenchment and since the petitioner/management has not paid any notice pay or compensation, because of infraction of Section 25F of the Act, their termination was illegal and therefore, had ordered relief as set out above. 8. Mr.S.Udayakumar, learned Additional Central Government Standing Counsel submits that the impugned award is liable to be interfered with as the contesting respondents are not workmen of the department, but are engaged by the Canteen Management Committee. In this connection, the learned Additional Central Government Standing Counsel relied upon the judgment of the Supreme Court in International Airport Authority of India v. International Air Cargo Workers' Union and another, AIR 2009 SC 3063. 9. In International Airport Authority of India case, supra, the judgment of the Division Bench of this Court in W.A.No.544 of 1998 was set aside by the Supreme Court. The Supreme Court found that the employees who are engaged through a society by a written contract cannot be claimed to be employees of the International Airport Authority of India. The contract labour agreement was produced before the Court and in that view of the matter in paragraph (29), the Supreme Court came to be conclusion that contract labour agreement between the International Airport Authority of India and the Co-operative society was not sham, nominal or a camouflage and the contract labour were not the direct employees of the International Airport Authority of India; and that in the absence of any notification under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 prohibiting the employment of contract labour in the operation of cargo handling work, the workmen employed as contract labour are not entitled to claim any absorption. The Supreme Court, therefore, did not grant any relief to the workmen and the order of the Division Bench of this Court was set aside. 10. It is not clear as to how the said judgment will have any application when there was no plea raised before the Tribunal that the contesting respondents were engaged through the contract labour society and there was a written contract between the department and the society, which contract was also gone into by the Tribunal. On the other hand, no such plea was taken before the Tribunal. The only plea raised, if at all, was that they were not paid out of the funds of the Department and before this Court an attempt is made to show that they were engaged by the Canteen Management Committee. In a writ of Certiorari, the parties cannot improve their case when they challenge the award, when the Tribunal was not posted with such facts and appropriate pleadings were not made before the Tribunal. 11. The learned counsel thereafter relied upon the judgment of https://hcservices.ecourts.gov.in/hcservices/ the Supreme Court in R.R.Pillai (dead) through L/Rs. v. Commanding Officer, HQ S.A.C. (U) and Others, JT 2009 (14) SC 56. In that case, the Supreme Court held that the Unit Run Canteen (URC) was not department canteen and therefore, the workmen under URC cannot move the Central Administrative Tribunal or the High Court and seek for regularisation as against the Central Government and that the circular issued for regularising the Statutory Canteen employees will not apply to URCs. The Supreme Court found that the High Court did not consider the validity of Rule 23 of the Canteen Rules and held that the order of the High Court cannot be supported. However, the Supreme Court found that the R.R.Pillai was no more and therefore, by exercising the power under Article 142 of the Constitution of India, directed that a sum of Rs.2 Lakhs be paid to the legal representatives who have come on record. In the present case, such a contingency did not appear. 12. The learned counsel also placed reliance upon paragraph [18] of the judgment of the Supreme Court in Raghavendra Rao v. State of Karnataka, [2009] 4 SCC 635. In that case, the Supreme Court applied the decision in State of Karnataka v. Umadevi (3), [2006] 4 SCC 1 to state that in case of a contractual appointment, the appointment will come to an end at the end of the contract, and if it is an engagement or appointment on daily wages or casual basis, the same would come to an end when it is discontinued and therefore, the Court cannot grant any relief in respect of such workman. 13. He also submitted that subsequently the canteens have been closed and in case of new canteens, appointments were directed to be made on regular basis. But however, in the office memorandum issued by the Government of India, Department of Personnel and Training, dated 22.8.1995, the canteen employees who were working on regular basis, other than those employed on ad-hoc/casual basis, prior to 1.10.1991 were deemed to have been appointed on regular basis in their respective grades. It is unnecessary to go into the subsequent developments, since they were not brought before this Court by definite pleadings. Therefore, this Court is inclined to consider only the validity or otherwise of the award. 14. Per contra, Mr.R.Rengaramanujam, learned counsel for the contesting respondents placed reliance upon the judgment of the Supreme Court in Hindalco Industries Limited v. Association of Engineering Workers, [2008] 13 SCC 441. In that case, the Supreme Court dealt with a case of canteen employees who complained before the Industrial Court at Mumbai created under the Bombay Industrial Relations Act that they have been kept as temporary employees even though the canteen was run in the company's premises free of rent along with free water, electricity, fuel, furniture, fixtures, https://hcservices.ecourts.gov.in/hcservices/ crockery and all cooking utensils and the company has fixed the rate of meals, etc. After going into all these aspects, the Industrial Court held that the contract based on which the management is keeping the workmen on contract basis, though in the name of one Gambhir Caterer, was only a sham and nominal contract and the workmen are employees of the principal employer and it also held that such an action on the part of the employer would amount to a commission of unfair labour practice hit by Item 9 of Schedule IV of the Maharashtra Recognition of trade Unions and Prevention of Unfair Labour Practices Act, 1971. Therefore, the Industrial Court gave a direction to regularise the services of the workmen. When this came to be challenged, the learned Judge of the Bombay High Court confirmed the award and dismissed the writ petition. The subsequent challenge to the said order was also negatived by the Division Bench. Aggrieved by the same, the company filed an appeal before the Supreme Court. The Supreme Court, rejecting the appeal filed by the employer, held as follows in paragraphs 35 and 36: "35. As stated earlier, in spite of change of several contractors, neither the workmen were replaced nor fresh appointments were made. On the other hand, same workmen were continuing even on the date of filing of the complaint. Taking note of all the abovementioned relevant materials, special circumstances and most of the employees are working for more than 10-15 years and finding that there is no valid reason for the Company to deny their permanency, the Industrial Court rightly concluded that the Company has committed unfair labour practice under Item 9 of Schedule IV of the MRTU and PULP Act, 1971 and issued appropriate directions. With the materials placed, we are also of the opinion that even though the record shows that canteen is being run by the contractor, ultimate control and supervision over the canteen is of the Company. Inasmuch as the facts on hand are identical to the decision in Indian Petrochemicals Corpn. Ltd. v. Shramik Sena, [1999] 6 SCC 439 which is a three-Judge Bench decision which was not cited before any of the decisions relied on by the Company, in view of the circumstances narrated in the earlier paras, we accept the conclusion arrived at by the Industrial Tribunal. 36. Coming to the impugned order of the High Court, it is argued that in spite of the earlier direction of this Court in SLP (C) No. 9244 of 1999, the High Court has not adverted to the relevant aspects and committed the same error in confirming the order of the Industrial Court. In the light of the said contention, https://hcservices.ecourts.gov.in/hcservices/ we have gone through the impugned decision of the High Court, which clearly shows that the High Court was conscious about the observation of this Court. The High Court order further shows that it has adverted to the relevant details furnished before the Industrial Court and analysed the same and finally after recording that the findings of fact arrived at by the Industrial Court cannot be termed as perverse and they are based on proper appreciation of evidence and sound reasoning dismissed the letters patent appeal. We do not see any error or infirmity in arriving at such conclusion. On the other hand, as discussed above, we are in entire agreement with the conclusion arrived at by the Industrial Court and affirmed by the High Court." 15. A similar argument, namely that such employees cannot claim employment against the principal employer and the company, being a public sector undertaking, is bound by the relevant recruitment rules, was also rejected by the Supreme Court. The contention raised by the management is found in paragraph (26) of the judgment as follows: "26. On behalf of the management, it was contended before the High Court that it was a public sector undertaking and it cannot appoint any person in contravention of the recruitment policy which requires the management to follow a roster system. Therefore, apart from the fact that the workmen were not in the regular employment of the said management, the absorption or regularisation of the services of the said workmen would contravene Article 16(4) of the Constitution, and would also contravene the reservation policy which is applicable for recruitment in the establishment managed by it." 16. The Supreme Court in Hindalco Industries Limited case, after applying the earlier judgment in Indian Petrochemicals Corpn. Ltd. v. Shramik Sena, [1999] 6 SCC 439, held as follows in paragraph [34]: "34. As rightly concluded by the Industrial Court, the Company has clearly laid down the quality, quantity, the rates and manner of supplying food articles. After adverting to Clause (d)(1)(2) of the agreement, the Industrial Court has concluded that though responsibility is cast upon the contractor to make payment of wages, PF contribution, etc. on submission of the bills, the amounts are to be paid/reimbursed by https://hcservices.ecourts.gov.in/hcservices/ the Company. The above details clearly show that though certain amounts are being paid by the contractor, in the real sense, ultimately, it is the Company which pays all the amounts. From the evidence and the materials, it is also clear that the activities of the workmen in the canteen, their suitability to work, physical fitness are ultimately controlled by the Company. In those circumstances, the Industrial Court is perfectly right in arriving at the conclusion that the evidence coupled with the terms of agreement show that the contract is nothing but paper agreement." 17. The learned counsel also placed reliance upon the latest judgment of the Supreme Court in Maharashtra State Road Transport Corporation and another v. Casteribe Rajya Parivahan Karmchari Sanghatana, [2009] 8 SCC 556. In that case, apart from approving the similar order passed by the Industrial Court basing upon Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, the Supreme Court dealt with the objection based upon State of Karnataka v. Umadevi (3), [2006] 4 SCC 1 and held that the prohibition mentioned in Uma Devi (3) case is only for the High Court and the Supreme Court in granting direction under Articles 226 and 32 of the Constitution of India. In that context, the Supreme Court held that any appointment in public employment shall be filled up only by the relevant recruitment rules, but the said judgment will not apply with a situation where the local law prohibits a commission of unfair labour practice. In fact, the question framed by the Supreme Court in paragraph (30) is as follows: "30. The question that arises for consideration is: have the provisions of the MRTU and PULP Act been denuded of the statutory status by the Constitution Bench decision in Umadevi case? In our judgment, it is not." 18. The said question raised was answered by the Supreme Court in paragraph (33) as follows: "33. The provisions of the MRTU and PULP Act and the powers of the Industrial and Labour Courts provided therein were not at all under consideration in Umadevi case. As a matter of fact, the issue like the present one pertaining to unfair labour practice was not at all referred to, considered or decided in Umadevi (3) case. Unfair labour practice on the part of the employer in engaging employees as badlis, casuals or temporaries https://hcservices.ecourts.gov.in/hcservices/ and to continue them as such for years with the object of depriving them of the status and privileges of permanent employees as provided in Item 6 of Schedule IV and the power of the Industrial and Labour Courts under Section 30 of the Act did not fall for adjudication or consideration before the Constitution Bench." Therefore, the objection raised by the learned Additional Central Government Standing Counsel based upon the judgment of the Supreme Court in Raghavendra Rao case, supra, cannot be pressed into service to defeat the case of the contesting respondents. 19. On the contrary, the Supreme Court in Hindustan Aeronautics Ltd. v. Dan Bahadur Singh and Others, [2007] 6 SCC 207 held in paragraph (16) as follows: "An employee working in an industrial establishment enjoys a limited kind of protection. The type of tenure of service normally enjoyed by a permanent employee in government service, namely, to continue in service till the age of superannuation, may not be available to an employee or workman working in an industrial establishment on account of various provisions in the Industrial Disputes Act where his tenure may be cut short not on account of any disciplinary action taken against him, but on account of a unilateral act of the employer. Therefore, the claim for permanency in an industrial establishment has to be judged from a different angle and would have different meaning." 20. Further, in General Manager, Oil and Natural Gas Commission, Silchar v. Oil and Natural Gas Commission Contractual Workers Union, [2008] 12 SCC 275, the Supreme Court upheld the award of the Tribunal in similar circumstances and in paragraph (20) the same objection based upon Umadevi case, supra, was dealt with. In answering the said objection, the Supreme Court held that each case has to be examined on specific facts and an universal yardstick should not be attempted. After saying so, in paragraphs 21 and 22, the Supreme Court held as follows: "21. In the instant case, on a consideration of material produced before it, the Tribunal came to the following conclusions: “(1) That there existed a relationship of master and servant. https://hcservices.ecourts.gov.in/hcservices/ (2) That there was no contractor appointed by ONGC. (3) That ONGC used to supervise and allot works to individual workers. (4) That ONGC took disciplinary action and called for explanations from the workers. (5) The workers were paid wages though they did not attend their duties due to Cachar Bandh and due to flood. (6) The wages were paid directly to the workers by ONGC and the acquaintance roll was prepared by the management to make payment to the workmen.” It has also been observed that even ONGC had admitted that since 1988, there was no licensed contractor and that the wages were being paid through one of the leaders of the Union and one such contractor, Manik has been named. The Tribunal then opined that it appeared from the record that Manik himself was a workman and not a contractor as he too was shown in the acquaintance roll to have received wages. We find that the real issue was as to the status of the workmen as employees of ONGC or of the contractor, and it having been found that the workmen were the employees of ONGC they would ipso facto be entitled to all benefits available in that capacity, and the issue of regularisation would, therefore, pale into insignificance. We find that in this situation, the Industrial Tribunal and the Division Bench of the High Court were justified in lifting the veil in order to determine as to the nature of employment in the light of the judgments quoted above. We, therefore, find that the ratio of the judgment in Umadevi (3) case would not be applicable and that the facts of UP.SEB v. Pooran Chandra Pandey, [2007] 11 SCC 92 are on the contrary more akin to the facts of the present one. 22. We are, therefore, of the opinion that in the light of the aforesaid observations, Mr Dave’s argument that the workmen being on a contractual basis, were not entitled to any relief, cannot be accepted and the large number of judgments cited by Mr Dave on this aspect cannot be applied to the facts of the case." If it is seen in the context of these decisions of the Supreme Court, the objection raised by the learned Additional Central Government Standing Counsel appearing for the petitioners cannot be https://hcservices.ecourts.gov.in/hcservices/ accepted. 21. On the contrary, the Tribunal kept in its mind the nature of employment of the contesting respondents