Delhi High Court

Union Of India (Uoi) vs Shri O.P. Singla And Anr. on 1 May, 2002

Author:
A.K. Sikri

Bench:
A.K. Sikri

JUDGMENT

A.K. Sikri, J.

1. The petitioner is Union of India. Respondent
No.2 Shri Surender Prasad (hereinafter to be referred
as "workman") was employed in the departmental canteen
of Ministry of Works and Housing (hereinafter referred
to as "the Management") as Assistant Manager. His
services were terminated by orders dated 26.4.1980
which was an order of termination simpliciter. The
workman feeling aggrieved by this order of termination
raised Industrial Disputes by invoking the machinery of
Conciliation under the
Industrial Disputes Act

(hereinafter referred to as `the Act'). The Management
was summoned. Conciliation proceedings started but:

CWP.No.248/85

ended in failure. Thereafter, on
consideration of the failure report submitted by
Conciliation Officer, Central Government being the
appropriate Government made Reference Order dated
21.5.1981 referring the dispute for adjudication of the
Central Government Industrial Tribunal with the
following terms of reference:

"Whether the action of the Chairman,
Departmental Canteen, Ministry of Works
and Housing, Nirman Bhawan, New Delhi in
terminating the services of Shri Surinder
Pershad, Assistant Manager, with effect
from 26.4.1980 is legal and justified?
If not, to what relief the workman is
entitled?"

2. It was registered as I.D.No.68/81.

The case of the workman before the Tribunal
was that he was regular, permanent employee. The
action of termination was preceded by issuance of
charge-sheet but no enquiry was held and instead
termination order dated 26.4.1980 was passed. It was
also stated that it was a mala fide action as workman
had taken part in union activities as he was Organising
Secretary of the All India Canteen Mazdoor Sabha
(Registered).

3. The Management contested the claim by filing
written statement raising number of preliminary
objections which included:

(1) the workman was a holder of civil post
and, therefore, he could not raise industrial dispute,

(2) the Management i.e. Departmental Canteen
was not an `industry' within the meaning of
Section
2(j)
of the Act,

(3) He was a purely temporary employee and his
services were validly terminated under CCS (Temporary
Services) Rules,1965,

(4) Shri Surender Prasad was not `workman'
under
Section 2(s)
of the Act as he was Assistant
Manager performing managerial duties.

4. On merits, it was sought to be pointed out
that the termination was on account of generally
unsatisfactory performance of duties by the workman and
on account of mis-behavior with the Hony.Joint
Secretary of the Departmental Canteen and that he also
instigated certain persons to join other persons in
physically assaulting him on 17.3.1980 and raising
slogans and using abusive language against the Chairman
of the Departmental Canteen but the action taken
against him was not by way of disciplinary action but
simply termination of service of a temporary employee
under the Rules.

On the basis of the pleadings, Industrial
Tribunal framed the following issues:

1. As per terms of reference.

2. Whether the claimant is not a workman?~
The parties led their evidence and argued the
case where after the Industrial Tribunal rendered
impugned Award dated 10.10.1984.

Relying upon the judgment of the Constitution
Bench of the Supreme Court in the case of
Bangalore
Water Supply and Sewerage Board Vs. A.Rajappa the Tribunal
held that the
Management was `Industry' within the meaning of
Section
2(j)
of the Act as the triple test
laid down in

the
said judgment
stood satisfied. The contention of the
Management to the effect that the canteen was
discharging sovereign function was brushed aside.
Thereafter the learned Tribunal examined the duties of
the claimant Shri Surender Prasad on the basis of which
it recorded the finding to the effect that he was a
`workman' covered by the definition under
Section 2(s)

of the Act. The relevant discussion to this effect is
in para-11 of the Award which reads as under:

"11. The claimant Surinder Pershad, in his
affidavit in para 6, clearly mentioned
that his duties were to keep accounts and
to deal with other affairs of the canteen
and, when some person was not on duty, he
was performing duty of such a person in
his absence and was also assisting the
staff at the time of rush to meet with
the situation. He is not shown by the
Management to have any managerial
functions like allocation of work to
other employees in the canteen and taking
disciplinary action against them. At the
most, he could be said to have
supervisory functions, but because
emoluments were only Rs.341/-p.m. he
remain within the definitions of
`workman' given in
Section 2(s)
of the
I.D. Act,1947".

5. The Tribunal also did not find favor with the
contention of the Management that simply because the
workman was holder of civil post and governed by CCS
(Temporary Services) Rules,1965, the provisions of the
Act would not apply. Thereafter the Tribunal after
discussing the relevant Rules and Notifications
(reference to which would be made at the appropriate
stage) came to the conclusion that on promotion of the
workman as Assistant Manager w.e.f.1.2.1979 on
probation for three months extendable by another three
months, the workman would be deemed to have been
confirmed as Assistant Manager in regular service as
per the Rules after the expiry of six months. The
Tribunal also held that the foundation of the order
unmistakably was misconduct of the employee, and not
merely a motive for his discharge and therefore in any
case the termination of his service was invalid.
Resultantly the Tribunal granted the workman relief of
reinstatement with full back wages and continuation of
service.

6. The learned counsel for the petitioner
reiterated same very submissions which were raised
before the learned Tribunal. In the first place, it
was the argument of the learned counsel for the
petitioner that Departmental Canteen run by the
Ministry of Works and Housing was held to be outside
the term of Industry vide notification dated 12.1.1982
and therefore, the Tribunal had no jurisdiction to pass
impugned award. In any case it was argued that the
workman was governed by CCS(Temporary Services)Rules
and, therefore, he could not invoke the provisions of
the Act. Further since he was not a workman within the
meaning of
Section 2(s)
of the Act, he could not raise
the Industrial Dispute and that since he was a
temporary employee his services could be terminated
under Rule-5 of the Temporary Service Rules by way of
termination simplicitor and the termination was not
stigmatic.

7. Insofar as the issue of Industry is concerned,
heavy reliance is placed upon Notification dated
12.1.1982 and particularly the following portion
thereof was pressed into service:

".....who have since been treated as
holders of civil posts under
Article 309

of the Constitution vide GSR 54 dated
17.01.1981, and it has been decided in
consultation with the Ministry of Law
that the canteens run departmentally in
Central Government Offices could be
regarded as excluded from the definition
of `industry' under
Section 2(i)
of the
Industrial Disputes Act. As such the
employees of such canteens do not come
under the purview of
Industrial Disputes
Act
-1947. Ministry of Agriculture etc.
may kindly see and circulate to offices
under their administrative control".

8. However, this would be of no consequence as
whether the Management is Industry or not is to be
determined on the basis of interpretation of
Section
2(j)
of the Act as interpreted by the Supreme Court
which is law under
Article 141
of the Constitution of
India.

9. The seven Judge judgment of the Supreme Court
in the case of
Bangalore Water Supply and Sewerage
Board Vs. A.Rajappa
(supra) still holds the field.
The Tribunal has rightly held that triple test
laid
down in

the said judgment
applies to this Departmental
Canteen also. Merely because the Canteen employees run
departmentally in Central Government Offices are
treated as holders of civil posts, Departmental
Canteens could not be excluded from the definition of
Industry.

The aforesaid Notification dated 12.1.1982
is thus contrary to the dicta
laid down in

Bangalore
Water Supply
case (supra) and, therefore, is not
binding on the Courts.

10. The learned counsel for the petitioner also
placed reliance in the case of Bombay Telephone Canteen
Employees Association, Prabhadevi Exchange Versus Union
of India & Others wherein Bombay
Telephone Canteen Employees Association was held to be
not Industry within the meaning of
Section 2(g)
of the
Act. However
,
the said judgment
has been specifically
overruled by the Supreme Court in the case of
G.M.Telephone Vs. A. Srinivas Rao 1998 SCC (L&S) 6
wherein the Supreme Court held that decision in
aforesaid case was in direct conflict with
Bangalore
Water Supply
case (supra).

11. The argument of the learned counsel to the
effect that predominant activities of the petitioner
are sovereign and the canteen is only highly micro part
of the said activity is also devoid of any merit and is
highly misconceived.
In
Bangalore Water Supply
case
(supra) the Supreme Court has laid down the test in the
following words:

"140. `Industry', as defined in
Section
2(j)
and explained in Banerji (supra),
has a wide import.

(a) Where (i) systematic activity, (ii)
organized by co-operation between
employer and employee (the direct and
substantial element is chimerical) (iii)
for the production and/or distribution of
goods and services calculated to satisfy
human wants and wishes (not spiritual or
religious but inclusive of material
things or services gearer to celestial
bliss e.g. making, on a large scale
prasad or food), prima facie, there is an
`industry' in that enterprise.

(b) Absence of profit motive or gainful
objective is irrelevant, be the venture
in the public, joint, private or other
sector.

(c) The true focus is functional and the
decisive test is the nature of the
activity with special emphasis on the
employer-employee relations.

(d) If the organisation is a trade or
business it does not cease to be one
because of philanthropy animating the
undertaking".

12. In any case this argument of the petitioner is
based on Bombay Telephone Canteen Employees Association
(supra) which has been specifically overruled.

13. Keeping in view the aforesaid position in law,
the irresistible conclusion is that the Management
would be `Industry' within the meaning of
Section 2(j)

of the Act.

14. The argument of the Management to the effect
that Shri Surender Prasad was not a workman is equally
misconceived. The main thrust of the argument is that
he was discharging managerial duties and, therefore, a
person who is discharging managerial duties would not
be treated as workman. In support reliance is placed
upon the following judgments:

The Management of M/s. Statesman Ltd.

New Delhi Vs. Lt. Governor, Delhi and others
1975 Lab IC 543.

"....
Section 2(s)
expressly excludes
managerial or administrative officers and
also would not apply to literary or
intellectual workers."

2.
P.A.S. Press, Madras Vs. Presiding
Officer, Labour
Court Madras and another .

"....whether an employee is a workman or
comes within the exception (iii) or (iv)
of
Section 2(s)
depends not on his
designation but on the exact nature of
duties and functions for which he is paid
remuneration."

3. Andhra Scientific Co.Ltd.
Masulipatam by
the General Manager Vs. A Seshagiri Rao
represented by
Andhra Scientific Co. Employees' Union, Masulipatam
and another .

"....Decisive test is nature of work done
by person and not his designation."

4.
C.Narayana Reddy Vs. Management of
Ajantha Theatre and another
1994 Lab I.C. 2634
(Karnataka).

"...If a person is appointed mainly in
managerial or supervisory capacity he
cannot be said to be workman and salary
drawn by him is of no consequence for
purpose of determining whether he is a
workman or not".

5. Ramendra Narayan Deb. Vs. 8th Industrial
Tribunal, West Bengal and others 1975 Lab IC 94 (Cal).

"....The determining factor in deciding
whether a person is a workman or a
supervisor is the principal or main work
he is required to do in his employment.
The principal nature of his work can be
determined from the letter of
appointment, the nature of his duties and
other attending circumstances".

6. 1994 Lab IC (NOC) 216 Kerala.

"....Employee performing multifarious
duties - Dominant work of employee was
supervisory in character - He is not a
workman".

However, whether a person is discharging
managerial or supervisory duties would depend upon the
nature of duties being performed and not the
nomenclature attached to a post. Therefore, the
submission of the petitioner that he is described as
Assistant Manager or that he is No.2 from the top in
hierarchy of appointed employees as would be clear from
the Office Order No.71/80 dated 27.2.1980 would be of
no consequence. The petitioner has not at all cited
anything on record to prove that he was discharging
managerial or supervisory duties. On the other hand as
is clear from para-11 of the Award quoted above, Shri
Surender Prasad had categorically stated his duties,
namely, to keep accounts to to deal with other affairs
of the canteen when some person was not on duty. With
regard to alleged duties the only support which the
learned counsel for the Management tried to get was an
affidavit of Shri Surender Prasad filed before the
learned Tribunal wherein in para-3 he objected to the
alleged going out of office of one employee Shri
Chanderkanta without taking his permission. This
solitary instance even if admitted would at the most
make his duties as supervisory. However, since he was
drawing the salary of Rs.341/-P.M. which is less than
Rs.1650/-PM even if he was discharging supervisory
function he would still be a workman under
Section 2(s)

of the Act. All the judgments cited by the petitioner,
therefore, are not applicable to the facts and
circumstances of the present case as the Management is
not able to prove on record that Shri Surender Prasad
was discharging managerial duties.

There was much debate as to whether the
workman stood confirmed and was, therefore, to be
treated as regular employee or he was still a temporary
employee governed by CCS (Temporary Service)
Rules,1965. His services are terminated under CCS
(Temporary Service) Rules and without holding enquiry.
Therefore, if he was to be treated as regular employee,
termination would be illegal on this score itself.

As pointed out above the Tribunal has held
that he was deemed to have become regular employee and
for this purpose the Tribunal had relied upon Open
Departmental Canteen Employees (Recruitment and
Conditions of Service) Rules,1980 which had been
enacted under
Article 309
of the Constitution of India
and although promulgated on 23.12.1980 were made
effective retrospectively i.e. from 1.10.1979. On the
other hand, the case of the petitioner was that when
the services of the workman were terminated on
26.4.1980 these Rules had been promulgated for which
notification was issued only on 23.12.1980 and,
therefore, these Rules did not apply in the case of the
workman. The argument of the workman was that these
Rules came into force retrospectively i.e. w.e.f.
1.10.1979 and, therefore, would be applicable in his
case when his services were terminated on 26.4.1980.

To my mind, learned Tribunal has rightly
decided the issue. When it is competent for the
President to promulgate the rules with retrospect
effect, which was done in the present case, there is no
reason to deny that Rules did not come into effect
w.e.f. 1.10.79 even when the Notification was issued
on 23.12.1980. It may be mentioned that vide
Notification dated 11.12.1979 all posts in the Canteen
and Tiffins run departmentally by the Government of
India were treated as civil posts w.e.f. 1.10.1979.
Even while issuing this Notification, it was clearly
stipulated therein:

"necessary rules governing their
conditions of service will be framed
under proviso to
Article 309
of the
Constitution to have retrospect effect
from the first day of 1979"

15. Thus the canteen employees were treated as
holders of civil posts w.e.f. 1.10.1979 by
Notification dated 11.12.1979 and for that reason even
the Notification dated 23.12.1980 framing the rules was
given effect from 1.10.1979. The legal effect thereof
would be that the Rules were enforced as on 1.10.1979
and as the workman was in service on that date, these
Rules would squarely be applicable in this case. Thus
if as per these Rules the petitioner had successfully
completed the probation period and even the maximum
probation period in September,1979, he would be deemed
as regular employee and, therefore, the petitioner
could not resort to Temporary Service Rules. The
termination of a regular employee without holding an
enquiry would be illegal on this count as well. The
Tribunal has also held that even if the workman was
governed by CCS (Temporary Service) Rules, termination
is stigmatic and therefore illegal. However, as it is
held that the workman had become a permanent employee
and, therefore, provisions of CCS (Temporary Service)
Rules could not be resorted to, it is not necessary to
go into this question.

16. The net effect of the aforesaid discussion is
that the Tribunal was right in holding that termination
of the workman was contrary to law and, therefore,
illegal.

17. In the present case when the writ petition was
filed, while issuing Rule on 25.1.1985 this Court had
stayed the reinstatement subject to full back wages of
the workman concerned being deposited by the petitioner
in this Court. The workman was directed to withdraw
50% of the deposit on giving security for restitution
in case the rule is made absolute. Yet by another
order dated 25.3.1985, having regard to the provisions
of
Section 17B
of the I.D.Act, further direction was
issued to the Management to pay the workman full wages
last drawn by him inclusive of any maintenance
allowance admissible to him under the rule during the
pendency of proceedings. By another order dated
20.1.1986 the workman was allowed to withdraw 50% of
the back wages deposited by the Management by
dispensing with the condition of furnishing of the
security. Remaining 50% amount has been kept in a
fixed deposit.

18. After the order dated 25.3.1985 the Management
started paying full wages at the rate of Rs.1167/-PM
which was paid up to July,1987 where after the workman
was paid at the rate of Rs.346/-PM. In these
circumstances the workman filed CM.962/88 and by order
dated December 1,1988 on the stay application this
Court clarified that full wages which were paid would
include revision of wages i.e. the wages to which the
workman would have been entitled had he been taken back
in service and the direction was given to this effect
to pay him Rs.1167/-PM in stead of Rs.346/-PM.
Thereafter, orders were made from time to time for
payment of the wages to the workman as per revised pay
scale. It is thus clear from these orders that the
workman has got the salary for the intervening period
at the rate at which he would have got but for his
termination. He has also withdrawn 50% of the back
wages which were awarded by the Tribunal. Remaining
50% along with interest are lying in the Court. The
workman would be entitled to withdraw that amount as
well. The effect of that order would be that the
workman has got the salary of the entire period from
the date of his termination up to this date.

19. As noted above, the petitioner had levelled
serious allegations of misconduct against the workman
for which he was placed under suspension and even the
charge-sheet was issued. However, without holding the
enquiry, provisions of CCS (Temporary Service) Rules
were resorted to. Therefore, it would be open to the
petitioner to consider as to whether the petitioner
wants to proceed with the enquiry. Such a decision
should be taken by the Competent Authority within a
period of three months from the date of the
communication of this judgment.

20. Subject to the aforesaid observations, this
writ petition stands dismissed.