SMT. USHA RANI DATTA, AAYA/ATTENDANT

AND OTHERS

STATE INDUSTRIAL COURT, INDORE & ORS .

. April 30, .1985

[D.A. DESAI AND V. KHALID, JJ.]

Industrial Dispute.~ Act :

Family Planning Clinic-Finizncial Expenditure irJcurred by Central Government-Taken over by Public Sector Undertaking Steel Plant-E1nployees of

Clinic-Whether employees of Steel Plant.

Urban Family Clinic was set up by a.Scel Plant for imP.lement'!:.tion of family welfare schemes. The Chief MdicaI O~er of he Plant' was , lhe adJ?1inis trative officer for the Clinic.

The financi<i:l, e~.penditure of , the Clinic was bOrne by the.Government of Indi:i. Subsequently te Clinic Was treated .as an integral part of the administration of the Plant an~ its employees were .ibsorbed wilh effect from February 4, 1976. E

The appellants who were serving as Aaya/ Attendants moved an application before the Labour Court for a relief that they are being wrongly treated as

freh employees from the date of absorption and that their services sice the commencemeDt of employment be treated as continuoUs for the purpo'se of gratutity, retrenchment and leave. etc.

J. .

The management of the Plant contested the application contending tha't the Clinic was nn independent unit set up by. the Government Of 1ddia and .that it was not an integral part of the administration and, therefore, the services rendered prior to the absorption could not be treated as service under the Plant and, therefore_, the application deserves to be dismissed. .. '

The Labour Court allowing the app1ication held that the Clinic had bard ly any independent existence and that the .employees of the Clinic were in reality and for all practical purposes the employees of the Plant.

Two revision petitions were filed before the Industrial Court-one on behalf of -the Plant, and the other on behalf of the appellants. The Industrial Court dismissed the revision petitio'n of-the appellants with a further direction

SUPREME COURT REPORTS

[1985] 3 S.C.R

A that the appliation before the Labour Court was liable to. be dismissed. While allowing the fevision petition of the tnanaement, th~ Industrial Court held that family planning: centres were run by different public undertakings and it was started as part of the general policy of the Government of India and even though the expenditure of the centre was reimbursed by the Government, the Clinic of the centre could not be said to be an irn.lustry within the meaning of B

expression in the Act nor could it be said to be iacidental to the main business of the Plant. The prayer in the application before the Labollr Court that the appellants should be given additional and better wages and service conditions was beyond the competence of the Labour Court and conseqeritly the application was not maintainable.

The writ petition filed y the appellants \Vas distnissed by the lligh Court,

Allowing the Appeal,

HELD : I. The findings of facts as recorded by the Labour Court and which have neither been departed from nor questioned by the High Court clearly point to the inescapable conclusion that the Clinic had no independent existence of its own and that for all practical purposes it was under the adminis trative control of the Plant. (1053 E]

2. The Clinic had noindependent existence. In fact it was an euphemism to call it an independent undeftaking. It was part arid parcel of the administrative set up. The Clinic was managed by the Chief Medical Officer of the Plant with a designation of Administrative Officer, and was accountable for the money received fronl the Government of India. The Jabour Court was perfectly justified in holding that the employees of the Clinic were the employees of the Plant working in a department tinder the administrative control of Chief Medi cal Officer who was under the overall administrative control of the management of the Plant. The Labour Court was perfectly justified in holding that since the inception of the Clinic the employees were the employees of the Plant .and tha\the absorption was an acceptance of reality avoiding the pretence.

(1054 E; G-H; 1055 A-BJ

3. The Industrial Court was in error in concluding that whether the application as made was not maintainable. The reasons which appealed to the Labour Court for holding that the application was maintainable are indispu ta bly unquestionable and the view to the contrary is untenable. (1055 C]

4. The High Court has overlooked that Family Planning Scheme has to be implemented in larger national interest.

Publi~ sector undertakings owned by the Government ofl ndia may be directed to carry out the scheme. For this purPose the Clinic was set up nder the ad1ni11istrative control of the Chief Medical Officer of the Plant. If a hospital can be said to be run for the welfare of the employees of the Plant how the Clinic which would also be described as a. hospital for giving advice in family planning could be differentiated from a hospital. A modern hospital can as wen have a family planning clinic. The 'distinction drawn by the High Court lacks logic. The Clinic was an integral

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USHA RANi v. INDUSTRiAL COURT (Desa.i, ),) lOSi ·

depariment of the Plant aod had hardly any independent existence. The inde A pendent paper exiStence was found unworkab1.e in the IOng run and therefore the Public Enterprises Committee directed to absorb the employees of the Clinic in the establishment of the Plant. Accordingly no other view is possible than the on taken by tho Labour Court. (1055 E-H]

Bangalore Water Supply & Sewerage Boarf! etc. v. R. Rajappa & others, [1978] 3 SCR 207, referred to.

CIVIL APPELLATE

JURISDICTION : Civil Appeal No. 2231 of 1985. . .

From the Judgment and Order dated 8.3.1983 of the Madhya Pradesh High Court in Misc. Petition No. 1124 of 1982.

"' R. Salish for the Appellants.

S.K. Mehta for the Respondents.

The Judgment of the Court was delivered by

DESAI, J. Special leave granted.

A trivial dispute disposed of by an eminently just and legally correct order by the Labour Court was unnecessarily interfered with by the Jndnstrial Court, Madhya Pradesh which has forced emp loyees working in a comparatively lower grade to knock at the doors of this Court.

Urban Family Planning Clinic ('Clinic' for short) was set up at Bhilai for implementation of family welfare schemes of the Government of India in accordance with approved pattern set out in the letter of Ministry cif Health dated May 16, 1963. The Chief Medical Officer of the Bhilai Steel Plant was to be. the administrative officer for the Clinic. The entire expenditure of the Clinic was met by the Government of India by giving 100% grant though it was stated as a fact that this amount was not brought into the bank account of Bhilai Steel Plant but was deposited in a separate bank account in the State Bank of India under the name and style of Bhilai Steel Plant Urban Family Planning Clinic Grant-inaid Account. Subsequently on the recommendation of Bureau oi' Public Enterprises, the Clinic was treated as an integral part 6r the

SUPREME COURT REPORTS . [1985] 3 s.c.il

A administration ofBhilai Steel Plant and the employees working in the CliniC were absorbed as employees of the Bhilai Steel Plant efteC'tive frop1February 4, 1976.

Smt. Usha Rani Datta and 11 others who were serving as

A, ay.af.Attendi:its etc. (presumably Class IV employees) moved an application before the Labour Court for a relief that they are being wrongly treated as fresh employees from the date of absorption and t, hat, heir .ervices since the commencement of employment somewhere i'n 1964 be treated as continuous for the purpose of gratuity, retrenchment and leave etc. The application was moved in the Labour Court, Durg but it came to be transferred to Labour Court at Raipur. ·

The management of the Bhilai Steel Plant contested the , application contending that the Clinic was an independent unit set up by the Government of India and that it was not an integral part of the administration of Bhilai Steel Plant and therefore the services rendered prior to the absorption on February 4, 1976 could not be treated as service under the Bhilai Steel Plant and therefore the application deserves to be dismissed.

The learned Presiding Officer of the Labour Court after hearing both sides and taking into consideration the evidence produced before it held that the Clinic had hardly any independent existence and that the employees of the Clinic were in reality and for all praCtical purposes the employees of the Steel Plant.

Acc.ordingly the application was allowed and the n, ecessary relief was given.

Two revision petitions came to be filed before the Industrial Court at Madhya Pradesh set up unde.r the Madhya Pradesh Industril Relatious At. One Revision Petition being No. 10/MPIR/81 was filed by the 'Executive Director, Bhilai Steel Plant questioning the correctness of the decision of the Labour Court. Original applicants before the Labour Court mt. Usha Rani Datta and others filed a Revision Petition being No. 2/MPIR/81 praying for relief not granted by the Labour Court.

Both the revision petitions were disposed of by a learned Member of the Industrial Court by a common jndgment.

Taking up the revision petition of the managemf:nt i\ was hetd

tlsliA RANI v. INDUSTRiAi. COURT (Desai, J.) io53

ramily planning centres were run by different public undertaking' and it was started as part of the general policy of the Government of India and even _ though the entire expenditure of the Centre was reimbursed by the Government of India, the clinic of the centre could not be said to be an industry withiil the meaning of the expression in the Act nor could' it be said to be iilcidental to the main business of the Bhilai Steel Plant. The learned Member further held that the prayer in the application before the Labour Court was that the petitioners before the Labour Court who wre formerly employed in the Family Planning Clinic should be give~ additional and better wages and service conditions and this subject was beyond the competence of the. Labour Couft, and for these "-( reasons the application was not maintainable. Accordingly the ""revision petition filed by the management was allowed anc:! the

revision petition of the original petitioners was dismissed with a further direction that the application before the Labour Court was liable to be dismissed.

After an unsuccessful writ petition No. I 124/82 in the High Court of Madhya Pradesh at Jabalpur, theoriginal applicants hav~ filed this appeal by special leave. ·

The findings of facts as recorded by the Labour Court and which have neither been departed from nor questioned by the High Court clearly point to the inescapable conclusion that the Clinic hao; I no independent existence of its own and that for all practical purposes it was under the administrative control of the Bhilai _Steel P.1.ant.

Let us recapitulate those findings of facts. The Clinic was set up at Bhilai somewhere in 1964. according to the approved• pattern set out in the letter of the Ministry of Health dated May 16, 1963. This letter was annexed as Annexure R-1 to the writ petition, in the High Court. Bhilai Steel Plant is an wholly owned Government of India undertaking.' It received grant to J]leet the ent_i<e expenditure of the Clinic. After the independent existece_

on paper from 1964 to 1976, the pretence was removed _and , tp_e reality accepted in that all the employees of the Clinic were 1)-bs_orbe~ as employees of the Bhilai Steel Plant. This .becomes clear from the letter of the Senior Personnel Manager, Bhilai Steel Plant dated February 4, 1976. It provides that the .General Manager has approved absorption of Family Planning staff as reg1,1lar employees of the Bhilai Steel Plant under Chief Medical Officer with imme-

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' SUI'R.BME COURT REPORTS [1985) 3 s.c.R.

diate'effect, against posts and scales set out in the Jetter. It was , further stated: that the' po'sts, designations and scales are personal to the existing incumbents and on finalisation of standard manning &'designations, the absorbed personnel would be suitably adjusted, to'tbe.e'xtent feasible. Therefore till the absorption, the pretence was ihafihe' Clinic even though it wholly under the administrative confroi 'of the Chief Medical Officer, Bhilai Steel Plant who was none'other' than a full-time employee of the Bhilai Stee't Plant, was treated independent. Absorption erased th~ pretence. These facts are not in dispute and were not controverted befor~ us.

'' - ' . The learned Member of the Industrial Court with whom High Court appears to have agreed, was of the opinion that when the ;-~ Clinic bad its separate existence it was not covered in the expres- . sion 'industry' and that even though Bbilai Steel Plant is an. industry, the Clinic could not be styled as industry.

In our opinion this distinction drawn is entirely meaningless. lf Bhilai Steel Plant is an industry and if under the decision of this Court in Bangalore

Water Supply & Sewerage Board etc. v R. Rajappa & others (1) an hospital is an industry, this distinction drawn between two branches of administration of Bhilai Steel Plant attaches importance to a shadow without substanci and substance without significance. , The Clinic had no independent existence.

In fact it was an euphimism fo'call it an independent undertaking. It was part and parcel of Bhiiai Steel Plant administrative set-up.

May be for purpose of

.icohriting 100% grant received from the Government of India was kept in a separate account but that does not clothe the Clinic'with . any independent existence. It was nowhere suggested that the

e'mployees of the Clinic were employees of the Government of India.

Tliis aspect did agitate the mind of the High Court when it obser- ·

ed'that : 'it is a moot question whether the employees in the Clinic were emplbyees of the Government of India or of the Plant.' The uO'disputed fact is that the Clinic was managed by Chief Medical offi'cef' of Bhilai Steel Plant with a designation of Administrative Officer of the Clinic and .was accountable for the money received frcim'the'Government of India as grant to the Undertaking called Bhilai Steel Plant and if it was never contended that the employees' of the Clinic were the employees of the Government of India, indisputably the Labour Court was perfectly justified inholding that the 'employees of the Clinic were the employees of the Bhilai Steel ·

~' ':h' :0<

ti) (1978) 3 SCR, 29'1.

tlsitA RM-ii v. INDUSTRIAL COURT (Desai, J.) toss'

 Plant working in a department called Clinic under the administra- A tive control of Chief Medical Officer who was under the overall administrative control. of the management of Bhilai Steel Plant ln our opinion, therefore the Labour Co.urt was perfectly justified in holding that since the inception of the Clinic the 'employees were the employees of the Bhilai Steel Plant and that the absorption was an acceptance of reality avoiding the pretence.

The learned Member of the Industrial. Court was in error in concluding that whether the application as made. was not maintain~ able. The reasons which appealed to the Labour Court for holding that the application was maintainable are indisputably unquestionable and the view to the contrary does not commend to. us.

Lastly. we may refer to one observation of the High Court which may create confusion in futUre and therefore requires to be properly understood.

Says the High Court that the Clinic. was not a canteen or a hospital run for the welfare of the employees in the main industry.and it was not opened as an operation incidenta\to the main industry. The High Court 'concluded th>tt for this reason the employees working in the Clinic, could not be taken to be the employees employed in the Iron and Steel Industry carried on by the Plant.

Unfortunately the High Court overlooked that family planning scheme has to be implemented in larger national interest.

Public Sector undertakings owned : by the Government of India may be directe.d to carry out tbis scheme.

Probably imbued with this idea, the Clinic was set up under the administrative control of the Chief Medical Officer of the Plant If a hospital can be said to be run for the welfare of the employees of the plant as observed by the High Court one fails to understand, how a clinic which could also be described as a hospital for giving advice in family plam1ing could be differentiated from a hospital.

A modern hospital can as well have a family planning clinic. The distinction drawn by the High .court lacks logic. Therefore also one can safely conclude that the clinic was an integral department of the Plant and had hardly any independent existence. The independent paper existence was found . unworkable in the long run and therefore the h.blic Enterprises Committee directed public enterprise to a.bsorb the employees of the Clinic in the establishment of the Plant. Accordingly no other view is possible than the one taken by the Labour Court,

1056 SUPRllMll coti!l'i' REPORTS [19ssj 3 s.c.a.

A Acc9rdingly this appeal is allowed and the decision of the

learned Member of the Industrial Tribunal as well as the judgment of the High Court are set aside and the one given by the Labour Court is restored with costs throughout. The total costs is quanti tied at Rs. 5,000 ·

A.P.J.

Appeal allowed.