Case: State Of Karnataka  Vs. Kgsd Canteen Employees Welfare Asson&amp;Ors

2. The First Respondent herein is an Association of the employees of the Karnataka Government Secretariat Departmental Canteen. The Respondent Nos.2 and 3 are its members. They filed a writ petition before the Karnataka High Court, inter alia, contending that the said canteen having been run by the State Government for the benefit of the secretariat employees and 74 employees working therein having completed more than 10 years of service were in effect and substance the employees of the State Government itself, although they were termed as employees of the canteen. Further contention of the respondents herein was that their wages were absolutely meagre being little more than the minimum wages, but despite several representations made by them, they were not paid the same salary as was payable to the employees of the State who were similarly situated3. The Appellant herein rejected their request for grant of scale of pay and other service benefits applicable to the Government servants, inter alia, on the premise that they were not its employees4. A learned Single Judge of the High Court opined that the canteen can be equated to the Government Hospitality Organization where the canteen facilities are made available and consequently directed the Appellant to implement the notification dated 22.6.1996 which was applicable in relation to the Government Hospitality Organization, as far as possible to the said canteen employees with such revisions as are permissible under law as on the said date5. The learned Single Judge opining that the employees of the canteen are employees of the State Government directed:"The second prayer of the petitioners is to declare them as Government Servants. In this regard I deem it proper to modify the relief by issuing a direction to the Government to regularize the services of the petitioners in the following manner:Government is directed to regularize the services of such of those petitioners who have put in ten years of service subject to the Government satisfaction of qualification if any for the post held by them and keeping in view the long services rendered by themIt is declared that the petitioners are the employees of the Government and are entitled for pay parity as per Annexure-O with revision from time to timeThe petitioners have approached this Court in the year 1996 and the petition is heard and disposed of in the year 2000. Petitioners have been provided some increase in the wages from time to time. In these circumstances, I deem it proper that the petitioners are not to be given any arrears for the past period and the direction is to with effect from 1.1.2000 and not for the earlier period. The arrears from 1.1.2000 is to be made available to the petitioners within three months from the date of receipt of this order."6.. Appeals having been preferred by the State thereagainst, a Division Bench of the High Court disposed of the appeals modifying the judgment of the learned Single Judge as regard the date of regularization of their services as also payment of back wages, directing :"(i) The effective date from which the pay-scales and other service benefits should be extended to the employees of KGSD Canteen by regularizing their service is changed from 01.01.2000 to 29.05.2002."7. The learned Single Judge as also the Division Bench despite the fact that the Appellant herein had denied and disputed the relationship of employer and employee between it and the employees of the canteen, proceeded to determine the said question on the basis of various documents produced before it8. The State of Karnataka has filed Civil Appeal Nos.224-226 of 2003 and 449-468 of 2003, questioning the impugned judgment in its entirety whereas the K.G.S.D. Canteen Employees Welfare Association preferred Civil Appeal Nos.4180-82 of 2003 questioning that part of the judgment whereby the judgment and order of the learned Single Judge was modified restricting the benefit of regularization from the date of the judgment and back wages from 29.05.2002 instead of 01.01.2000.

Reasoning:
19. In an affidavit filed before us, it is stated that the Karnataka Government Secretariat Employees Association which was running the canteen from 04.08.2000 to 31.03.2003 by a letter dated 10.03.2003, expressed its inability to run the canteen beyond 31.03.2003 and, thus, the canteen services were closed from 01.04.2003. It is further stated that the State Government demolished the main canteen building pursuant to the Government Note dated 04.08.2003. Certain litigations had thereafter been initiated before several authorities. A writ petition had also been filed by the Association before the High Court, which was marked as Writ Petition No.41207 of 2004 seeking direction to make the balance payment of LIC premium and contribution towards EPF for the period from 01.01.2003 to 31.03.200320. This Court evidently is not concerned with the pending litigation but we have noticed the said fact only for the purpose of showing that the State intended to run the canteen departmentally through a committee, but according to the State, the committee has a distinct and different existence or different entity than the Government21. The fact situation obtaining in this case already suggests that the State had no intention to run and maintain the canteen as a department. Had the intention of the State been to run the said canteen as one of its departments, the question of giving any grant or for that matter making of a provision for return of the furniture and equipments would not have arisen36. It was specifically noticed that the workmen of the Canteen and the contractor had entered into independent settlements without impleading the owner or occupier of the factory as a party therein which also went to show that the workmen were treating themselves the workmen of the contractor and not that of the owners37. We have referred to the aforementioned decisions in order to show that in each of the aforementioned cases the industrial adjudicator was required to apply the relevant tests laid down by this Court in the fact situation obtaining therein. Most of the cases referred to hereinbefore were considered by this Court in the peculiar facts and circumstances obtaining therein and, thus, it is even not proper for the industrial adjudicator to apply the ratio of one decision to the exclusion of other without considering the facts and circumstances involved therein. The law, however, does not appear to be settled as to whether even in a case where the employer is required to run and maintain a canteen in terms of the provisions of the statute, the employees of the canteen would automatically be held to be the workers of the principal employer for all intent and purport and not for the purpose of the Factories Act alone. We, however, are not concerned with the said question in this matter and refrain ourselves from making any observation in respect thereof38. We, however, intend to point out that in a case of this nature even an industrial adjudicator may have some difficulty in coming to the conclusion that employees of a canteen for all intent and purport are employees of the principal employer40. In a case of this nature, where serious disputed questions fact were raised, in our opinion, it was not proper for the High Court for embark thereupon an exercise under Article 226 of the Constitution. The High Court in its judgment relied upon a large number of decisions of this Court, inter alia, in Reserve Bank of India (supra) and State Bank of India & Ors. v. State Bank of India Canteen Employees Union (Bengal Circle) and Ors. [AIR 2000 SC 1518 ] ignoring the fact that all such disputes were adjudicated in an industrial adjudication49. The question which now arises for consideration is as towhether the High Court was justified in directing regularization of the services of the. It was evidently not. In a large number of decisions, this Court has categorically held that it is not open to a High Court to exercise its discretion under Article 226 of the Constitution of India either to frame a scheme by itself or to direct the State to frame a scheme for regularising the services of ad hoc employees or daily wages employees who had not been appointed in terms of the extant service rules framed either under a statute or under the proviso to Article 309 of the Constitution of India. Such a scheme, even if framed by the State, would not meet the requirements of law as the executive order made under Article 162 of the Constitution of India cannot prevail over a statute or statutory rules framed under proviso to Article 309 thereof. The State is obligated to make appointments only in fulfilment of its constitutional obligation as laid down in Articles 14, 15 and 16 of the Constitution of India and not by way of any regularization scheme. In our constitutional schemes, all eligible persons similarly situated must be given opportunity to apply for and receive considerations for appointments at the hands of the authorities of the State. Denial of such a claim by some officers of the State times and again had been deprecated by this Court. In any view, in our democratic polity, an authority howsoever high it may be cannot act in breach of an existing statute or the rules which hold the field50. It is not necessary for us to dilate further on the issue as recently in State of U.P. v. Neeraj Awasthi and Ors. [2005 (10) SCALE 286 ], it has been clearly held that the High Court has no jurisdiction to frame a scheme by itself or direct framing of such a scheme by the State53. The contention that at least for the period they have worked they were entitled to the remuneration in the scale of pay as that of the government employees cannot be accepted for more than one reason. They did not hold any post. No post for the canteen was sanctioned by the State. According to the State, they were not its employees. Salary on a regular scale of pay, it is trite, is payable to an employee only when he holds a status. [See Mahendra L. Jain and Others (supra)]54. The High Court was, thus, not correct in holding that the members of the First Respondent could be treated at par with the Hospitality Organization of the State of Karnataka. Such equation is impermissible in law. In the Hospitality Organization of the State, the posts might have been sanctioned. Only because, food is prepared and served, the same would not mean that a canteen run by a Committee can be equated thereto55. Subsequent events which had taken place is also worth taking note of. The fact remains that the canteen now is closed. The judgment and order of the High Court, thus, otherwise also cannot be implemented. The employees concerned, therefore, cannot be directed to be reinstated in service. We have noticed, hereinbefore, that other proceedings have been initiated by them. The said proceedings may be disposed of in accordance with law.