Case: Kanpur Suraksha Karamchari Union (Regd.) Vs. Union of India &amp; Others

2. The three industrial establishments, referred to above, namely ; Ordnance Equipment Factory, Central Ordnance Depot and Air Force Station, Kanpur are defence establishment forming part of the Defence Department of the Union of India. By the Order No. 18(l)80/D(JCM) dated the 25th July, 1981 sanction was accorded by the President of India to treat all employees of canteens established in Defence Industrial Installations under section 46 of the Act as Government employees with immediate effect. By an amendment, the said Government Order was given effect from 22. 10. 1980. The Government Order further provided that it would be applicable to all employees of the statutory canteens irrespective of the type and management of the canteens and till the Government decided otherwise the employees of the said canteens would continue to be governed by the terms and conditions of service laid down in their appointment letters and contracts of employment already subsisting. It was further stated that they would be continued to be paid such employments to which they were entitled then. When some of the employees retired after 22.10.1980 they applied for payment of pension. The Defence Department declined to treat the period of service rendered by them prior to 22. 10. 1980 in such canteens as part of qualifying ~service for purposes of pension on the ground that it was only with effect from 22.10.1980 from which date they had become Government employees their qualifying service could be counted. Aggrieved by the rejection of the claim of the workers in those canteens, theherein, have filed these petitions in this Court for declaration that the service rendered by the employees of such canteens prior to 22.10.1980 should be treat ed as qualifying service for purposes of pension.

Court's reasoning:
5. Rule 68 of the U.P. Factories Rules, 1950 (hereinafter referred to as `the Rules) framed under sections 46 and 112 of the Act gives particulars regarding the type of building that should be made available for running a canteen and the manner in which accounts should be maintained in such canteens. It further provides that a canteen managing committee should be established under clause (20) of rule 68 of the Rules. The Managing Committee shall consist of an equal number of persons nominated by the occupier and elected by workers. The number of elected workers shall be in the proportion of 1 for every 11000 workers employed in the factory, provided that in no case shall there be more than 5 or less than 2 workers on the Committee. The object of providing for the establishment of Canteen Managing Committee is to see that the employees of the factories have some amount of say in the management of the affairs of the canteens but the obligation to establish a canteen under section 46 of the Act is imposed on the occupier. The expression `occupier of a factory is defined in section 2(n) of the Act as the person who has ultimate control over the affairs of the factory, provided that (i) in the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier; (ii) in the case of a company, any one of the directors shall be deemed to be the occupier; and (iii) in the case of a factory owned or controlled by the Central Government or and State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be, shall be deemed to be the occupier. Under clause (iii) of section 2(n) of the Act, in the case of a factory owned or controlled by the Central Government, the person or persons appointed to manage the affairs of the factory by the Central Government shall be deemed to be the occupier. The person so appointed to manage the affairs of the factory of that Central Government is under an obligation to comply with section 36 of the Act by establishing a canteen for the benefit of workers the Canteen Managing Committee, as stated above, has to be established under rule 66 of the Rules to manage the affairs of the canteen. The functions of the Canteen Management Committee are merely advisory. It is appointed by the Manager appointed section 7 of the Act and the Manager is required to consult the Canteen Managing Committee from time to time as to the quality and quantity of foodstuff served in the canteen, that arrangement of the menus, times of meals in the canteen etc. The food. drink and other items served in the can teen are required to be sold on `no profit basis and the prices charged are subject to the approval of the Managing Committee. The accounts pertaining to a canteen in a Government factory may be audited by its departmental Accounts Officers.The building for the canteen has to be provided by the occupier. Under(13) of rule 68 of the rules there shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for the efficient running of the canteen. Suitable clean clothes for the employees serving in the canteen shall also be provided and maintained. Thus the basic requirements of the canteen, such as buildings, utensils, crockery, cultery, furniture etc. should be supplied by the occupier. Under the Ministry of Defence letter dated 24.5.1965 the prices of food, drink and articles supplies for the canteens are to be subsidised. A canteen is an integral part of the Defence establishment belonging to the Union of India. There cannot be a canteen without sufficient number of workers working in the canteen. The have to be appointed by the occupier. Otherwise he would not be full complying with section 46 of the Act. The Managing Committee cannot be the employer of those workmen in the true sense of the term. The Managing Committee constituted under section 46 of the Act which is not an incorporated body and whose financial position is uncertain cannot be considered to be the employer who h as to bear the legal responsibilities under the several labour laws in face in India. We may, however, add that in the case of a canteen run b a contractor or asociety or some other body the position may be different. But even then there has to be a Managing Committee if such a canteen is treated as a canteen established for purposes of satisfying the requirements of section 46 of the Act. Even in this case the contractor or thesociety or some other body will be the employer but no the Managing Committee. In this situation it is difficult to hold that the employees in canteens established under section 46 off the Act would not be employees of the occupier, even though for purposes of management a Canteen Managing Committee, whose functions are advisory as pointed out above, has to be constituted under the Rules. It is also not shown that on the workers in the canteens becoming the Government employees on 22.10. 1980 they were paid by the previous management, named, the Canteen Managing Committees constituted under rule 68 of the Rules any compensation in lieu of the services rendered by the m prior to 22.10.1980. We find it, therefore, difficult to hold that the employees working in such canteens were not employees of the factories in which the canteen had been established. If they are employees of the factories in which the canteen is established. the service rendered by them in these factories should be counted as part of the qualifying service for pension. Hence, the plea of the Union Government that the service rendered by the workers in canteens established under section 46 of the Act on and after 22.10.1980 alone can be included in the qualifying service for pension cannot be accepted. The period prior to 22.10.1980 also should be counted for purposes of pension.