R.P. Kunder And Ors. vs Indian Oil Corporation Limited ...
2001 Latest Caselaw 801 Bom

JUDGMENT

Nishita Mhatre, J.

1. These two writ petitions can be conveniently disposed of together as the question involved in both the Writ Petitions is the same.

2. The Petitioners (hereinafter referred to as "employees") in Writ Petition No. 917/1995 are workmen employed to work in the canteen run by the first Respondent- Indian Oil Corporation Limited, hereinafter referred to as "the Corporation". Respondent No. 2 is the Union of India and Respondent Nos. 3 and 4 are the Contractors employed by the Corporation to run their canteen. The Petitioner in Writ Petition No. 2117 of 1996 is the registered Trade Union representing the canteen employees employed in the canteen run by the Corporation. Respondent No. 1 is the Corporation, while Respondent No. 2 is the Union of India and respondent No. 3 is the Contractor. The Union has filed this Writ Petition on behalf of fourteen canteen employees who were not included in Writ Petition No. 917 of 1995.

3. The Corporation has been running a canteen in their head office for years together for providing subsidised lunch to its employees. The head office was formerly situated at Prabhadevi, Mumbai and the canteen was being run by the Corporation through a canteen contractor for providing service to the employees of the Corporation. When the head office shifted from Prabhadevi to Bandra, the same canteen employees continued to work at the Bandra canteen. After shifting the head office to Bandra, the Chief Industrial Relations Manager of the Corporation informed the employees of the Corporation that the management had decided to appoint a Consultant to ensure better service

in the canteen and maintenance of a high standard of hygiene, quality of eatables, calories/ nutritional value of eatables, etc. By its letter dated May 12, 1986, the Corporation had advised its workmen of how the canteen would be run and during what time the canteen would be open for the employees and their guests. The Corporation has provided separate premises for the canteen and pantry on each of its eight floors at its head office at Bandra. In addition to the premises, all the equipments, utensils, crockery, furniture, water, gas, electricity and milk required by the canteen were to be supplied free by the Corporation. The pantry on each floor were equipped with geyser, fridge and crockery, etc. Respondent No.3 in Writ Petition No. 917 of 1995 - Shiv Durga Caterers Pvt. Ltd. - entered into a contract with the Corporation for providing canteen facilities for the employees of the canteen. From time to time, this contract was renewed with Respondent No. 3 and after filing of the Writ Petitions, Respondent No. 4, namely, Sainath Caterers, was the new Contractor and has therefore been added as party Respondent by an order of this Court. However, the employees who were working during the time when the contract between Respondent No. 3 and the Corporation was subsisting, continue to be with the new Contractor.

4. Under the contract between the Corporation and the Contractor, the canteen was to be run by the Contractor for the Corporation. The agreement provided that water, gas, electricity as well as furniture, utensils and crockery would be supplied by the Corporation. A nominal royalty of licence fee of Re. 1/- per month was to be paid by the Contractor to the Corporation. The timings when the canteen was to be kept open was specified under the contract. The Corporation was to provide uniforms to the canteen workers and these workers would be recruited only if they were found medically fit by the Corporation's Doctor. The rates for various items to be supplied in the canteen were fixed by the Corporation. The Corporation was to obtain necessary licence from the -local or public authorities for running the canteen and was to pay all charges and taxes to such public or local authorities in respect of the canteen. It was further agreed in the contract that all suggestions and directions given by the Chief Industrial Relations Manager or any other officer under his authority of the Corporation would be implemented by the Contractor. The Contractor was only a licensee and the Corporation was entitled under the contract to terminate the licence at any time without assigning any reason. The canteen premises were to be considered as public premises within the meaning of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, The Contractor was responsible for payment of salary to the staff. The contract was to subsist till such time till the contract is terminated by the Corporation.

5. A Canteen-Committee was constituted consisting of eight members, four members as the management representatives and four members as the workers' representatives. This Canteen Committee continued till such time as it was reconstituted due to the representatives being not available for the work of canteen. Two members of the Canteen Committee were to maintain daily check lists as to whether the canteen kitchen is in a hygienic condition and cleanliness was maintained in the canteen. Checks were to be done on the canteen boys also in order to ensure that they maintain a high standard of cleanliness while in the canteen.

6. It is the case of the canteen employees that despite working for a number of years in the canteen run by the Corporation, they are not paid even minimum wages and are not considered as employees of the Corporation. The workmen working in the canteen claim that having worked for years together in the canteen, they are being treated as employees of the contractor, although the contract between the Corporation and Contractor is sham and bogus and have, therefore, filed the present writ petitions.

7. Mr. Singhvi, learned counsel for the Petitioners in both writ petitions, contends that the evidence on record, namely, the contract between the Corporation and the Contractor, the letter issued by the Corporation to its employees regarding running of the canteen, constitution of the Canteen Committee, all taken together demonstrate that the workmen were in fact the employees of the Corporation and not of the contractor. Mr. Singhvi has placed reliance on the judgments in Hussainbhai v. Alath Factory Tozhilali Union and Ors. ; M.M.R. Khan and Ors. v. Union of India and Ors., ; Parimal Chandra Raha and Ors. v. Life Insurance Corporation of India and Ors., ; Indian Petro-chemicals Corporation Ltd. and Anr. v. Shramik Sena and Ors., and Indian Overseas Bank v. I.O.B, Staff Canteen Workers' Union and Anr., contends on the basis of these judgments, that there was enough material before us to come to the unmistakable conclusion that the canteen employees were workmen of the Corporation and the Contractor was merely an agent. He contends that the contract was merely a sham and bogus contract to camouflage the fact that the Corporation was actually in dominant control of the canteen. According to Mr. Singhvi, the canteen Contractors, namely, Respondent Nos. 3 and, 4, were merely "name-lenders" and the canteen was in fact being run by the Corporation for the benefit of its employees and, therefore, there was no reason to discriminate against the employees working in the canteen by not giving them wages due and payable to the permanent workmen of the Corporation.

8. Mr. Cama, learned counsel appearing for the Corporation, disputed this and contends that the contract subsisting is a valid and genuine one for which a certificate under the Contract Labour (Regulation and Abolition) Act, 1970 has been issued showing that the Corporation is a registered employer and the Contractor is a genuine and licenced one. He further contends that there is no statutory obligation on the Corporation to provide a canteen and, therefore, the canteen which is in existence in the Corporation is merely as a welfare measure. He contends that the canteen is a facility and not a condition of service and, therefore, no obligation is cast on the Respondent Corporation to provide the same for its employees. He, therefore, submits that the canteen workmen have no enforceable right to be absorbed as employees of the Corporation and hence the Writ Petitions are not maintainable. Mr. Cama also denied that the Petitioners have put in a long number of years in service. He further submits that there was not enough material before us to come to an indisputable conclusion that the canteen workmen were employees of the Corporation or that the contract was a sham or a bogus one. Mr. Cama urges that if at all the canteen employees want to be considered as workmen of the Corporation, their demand must be adjudicated by the Industrial Tribunal/Court. Mr. Cama placed reliance on the recent judgment of the Apex Court in Steel Authority of India Ltd. v. National Union Water Front Workers, AIR 2001 SC 3527, delivered on August 30, 2001. He also relied on the judgments of the Supreme Court in R. K. Panda and Ors. v. Steel Authority of India and Ors., ; Employers in Relation to the Reserve Bank of India v. Workmen, ; State Bank of India and Ors. v. State Bank of India Canteen Employees' Union (Bengal Circle) and Ors., and Cipla Ltd. v. Maharashtra General Kamgar Union and Ors., 2001 SCC (L&S) 520 : 2001-I-LLJ-1063.

9. The judgment in Parimal Chandra Raha's case (supra), has been cited before us by Mr. Singhvi for the canteen employees to demonstrate the circumstances under which the High Court under Article 226 of the Constitution can declare the contract between the principal employer and the intermediary to be a sham and bogus one. In Raha's case (supra), the Supreme Court after taking a conspectus of the earlier decisions came to the following conclusion at p. 350 of 1995-II-LLJ-339:

"27. What emerges from the statute law and the judicial decisions is as follows:

(i) Where, as under the provisions of the Factories Act, it is statutorily obligatory on the employer to provide and maintain canteen for the use of his employees, the canteen becomes a part of the establishment and, therefore, the workers employed in such canteen are the employees of the management.

(ii) Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer to provide a canteen, the canteen becomes a part of the establishment and the workers working in the canteen, the employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the establishment.

(iii) The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicitly accepted by or cast upon the employer either by an agreement or an award etc., it may be inferred from the circumstances, and the provision of the canteen may be held to have become a part of the service conditions of the employees. Whether the provision for canteen services has become a part of the service conditions or not, is a question of fact to be determined on the facts and circumstances in each case.

Where to provide canteen services has become a part of the service conditions of the employees, the canteen becomes a part of the establishment and the workers in such canteen become the employees of the management.

(iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among others, on the nature of the service facility, the contribution the service in question makes to the efficiency of the employees and the establishment, whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the number of employees employed in the establishment and the number of employees who avail of the service, the length of time for which the service has been continuously available, the nature and character of management, the interest taken by the employer in providing, maintaining, supervising and controlling the service, the contribution made by the management in the form of infrastructure and funds for making the service available etc."

10. Parimal Chandra Raha 's case (supra) arose out of a Writ Petition filed under Article 226 of the Constitution wherein the canteen employees of the Life Insurance Corporation claimed to be the permanent employees of the Life Insurance Corporation. In the facts and circumstances of the case, the Supreme Court took the view that the canteen workmen were entitled to be absorbed as workmen of Life Insurance Corporation for the following reasons 1995-II-LLJ-339 at 354 :

"31. The facts on record on the other hand, show in unmistakable terms that canteen services have been provided to the employees of the Corporation for a long time and it is the Corporation which has been from time to time, taking steps to provide the said services. The Corporation has been taking active interest even in organising the canteen committees. It is further the Corporation which has been appointing the contractors to run the canteens and entering into agreements with them for the purpose. The terms of the contract further show that they are in the nature of directions to the contractor about the manner in which the canteen should be run and the canteen services should be rendered to the employees. Both the appointment of the contractor and the tenure of the contract is as per the stipulations made by the Corporation in the agreement. Even the prices of the items served, the place where they should be cooked, the hours during which and the place where they should be served, are dictated by the Corporation. The Corporation has also reserved the right to modify the terms of the contract unilaterally and the contractor has no say in the matter. Further, the record shows that almost all the workers of the canteen like the appellants have been working in the canteen continuously for a long time whatever the mechanism employed by the Corporation to supervise and control the working of the canteen. Although the supervising and managing body of the canteen has changed hands from time to time, the workers have remained constant. This is apart from the fact that the infrastructure for running the canteen, viz, the premises, furniture, electricity, water, etc. is supplied by the Corporation to the managing agency for running the canteen. Further, it cannot be disputed that the canteen service is essential for the efficient working of the employees and of the offices of the Corporation. In fact, by controlling the hours during which the counter and floor service will be made available to the employees by the canteen, the Corporation has also tried to avoid the waste of time which would otherwise be the result if the employees have to go outside the offices in search of such services. The service is available to all the employees in the premises of the office itself and continuously since inception of the Corporation, as pointed out earlier. The employees of the Corporation have all along been making the complaints about the poor or inadequate service rendered by the canteen to them, only to the Corporation and the Corporation has been taking steps to remedy the defects in the canteen service. Further, whenever there was a temporary breakdown in the canteen service, on account of the agitation or of strike by the canteen workers, it is the Corporation which has been taking active interest in getting the dispute resolved and the canteen workers have also looked upon the Corporation as their real employer and joined it as a party to the industrial dispute raised by them. In the circumstances, we are of the view that the canteen has become a part of the establishment of the Corporation. The canteen committee, the co-operative society of the employees and the contractors engaged from time to time are in reality the agencies of the Corporation and are, only a veil between the Corporation and the canteen workers. We have, therefore, no hesitation in coming to the conclusion that the canteen workers are in fact the employees of the Corporation."

11. According to Mr. Singhvi, learned counsel for the canteen employees, the circumstances present in Raha 's case (supra) as set out above are similar to the case before us. Therefore Mr. Singhvi submits that the High Court while exercising its powers under Article 226 in the present case can also declare the canteen employees as workmen of the Corporation with consequential direction regarding payment of wages and other emoluments.

12. In the case of I.P.C.L. (supra), a statutory canteen was provided by the Corporation for its workmen. A Writ petition was filed by the workmen in the High Court for a declaration that they are the regular employees of the Corporation and, therefore, were entitled to same pay-scale and service conditions as applicable to the regular workmen of the management. In this case also the Supreme Court regularised the service of canteen workmen and have found that the Contractor was engaged only for the purpose of record and for all purposes the workmen were in fact the workmen of the management. On the basis of the affidavits, what was established before the Apex Court in that case was 1999-II-LLJ-696 at 703 :

"(a) The canteen has been there since the inception of the appellant's factory.

(b) The workmen have been employed for long years and despite change of contractors the workers have continued to be employed in the canteen.

(c) The premises, furniture, fixture, fuel, electricity, utensils, etc. have been provided for by the appellant.

(d) The wages of the canteen workers have to be reimbursed by the appellant.

(e) The supervision and control on the canteen is exercised by the appellant through its authorised officer, as can be seen from the various clauses of the contract between the appellant and the contractor.

(f) The contractor is nothing but an agent or a manager of the appellant, who works completely under the supervision, control and directions of the appellant.

(g) The workmen have the protection of continuous employment in the establishment."

In view of this, the Supreme Court regularised the services of the canteen workers employed therein.

13. In the case of M. M. R. Khan's (supra), the canteen employees of a non-statutory but recognised canteen sought regularisation by filing Writ Petition under Articles 32 and 226 of the Constitution. The Supreme Court on the basis of the material placed before it, came to the conclusion that the workmen employed in statutory canteen as well as those engaged in non-statutory recognised canteen were entitled to be absorbed as Railway employees.

14. Mr. Singhvi also relied on the judgment of the Supreme Court in Hussainbhai (supra). This case arose before the Supreme Court on the basis of an adjudication before the Industrial Tribunal and consequent Writ Petition and Appeal. The Supreme Court while considering who is an employee and whether there is a master and servant relationship, held thus 1978-II-LLJ-397 at 398:

"5. The true test may, with brevity, be indicated once again. Where a worker or group of workers labour to produce goods or services and these goods or services are for the business of another, that there is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason, chokes of, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contactu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor. Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like, may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43-A of the Constitution. The Court must be astute to avoid the mischief and achieve the purpose of the law and not be misled by the maya of legal appearances.

15. Mr. Singhvi, learned counsel for the Petitioners, places strong reliance on the cases of Parimal Chandra Raha (supra), I.P.C.L, (supra), M. M. R. Khan (supra) and Hussainbhai (supra) to contend that there was sufficient material before us to come to the conclusion that the canteen workmen were in fact workmen of the Corporation. He contends that the facts in Raha's case (supra) and I. P. C. L. 's case (supra) were similar to the facts in the present case and, therefore, submits that there is clinching evidence to show that the canteen employees were in fact workmen of the Corporation and the Contractor was merely a "name lender".

16. On the other hand, Mr. Cama was at pains to point out that there must be an industrial adjudication before the contract between the Corporation and Respondent No. 3 or Respondent No. 4 is considered a sham or bogus one. He submits that while deciding Raha's case (supra), the Supreme Court had not considered the case of R.K. Panda (supra). The Supreme Court in R.K. Panda's case (supra) has held thus 1997- III-LLJ (Suppl)-1202 at 1205 :

"....Whether the contract labourers have become the employees of the principal employer in course of time and whether the engagement and employment of labourers through a contractor is a mere camouflage and a smoke and screen, as has been urged in this case, is a question of fact and has to be established by the contract labourers on the basis of the requisite material. It is not possible for High Court or this Court, while exercising writ jurisdiction or jurisdiction under Article 136 to decide such questions only on the basis of the affidavits. It need not to be pointed out that in all such cases, the labourers are initially employed and engaged by the contractors, as such at what point of time a direct link is established between the contract labourers and the principal employer, eliminating the contractor from the scene, is a matter which has to be established on material produced before the Court. Normally, the Labour Court and the Industrial Tribunal, under the Industrial Disputes Act are the competent for a to adjudicate such disputes on the basis of the oral and documentary evidence produced before them."

Although in R.K. Panda's case (supra), the Supreme Court did direct regularisation, it was on the basis of the facts and circumstances of that case.

17. Mr. Cama then placed reliance on the judgment in the case of Reserve Bank of India (supra). This case arose out of an industrial adjudication under Section 10(1)(d) of the Industrial Disputes Act, 1947. The Industrial Tribunal, on the basis of the evidence and other material on record, came to the conclusion that the employees working in the canteen were entitled to be absorbed as regular employees of the Reserve Bank of India and were entitled to the difference in Awards. Special Leave Petition under Article 136 of the Constitution was filed against the Award of the Tribunal. The Apex Court distinguished M. M. R. Khan's case (supra) and set aside the Award of the Tribunal. The Apex Court, however, did not consider it necessary to decide whether the ratio in Parimal Chandra Raha 's case (supra) was correct as the Tribunal had come to the conclusion on the basis of M.M.R. Khan's case (supra).

18. Mr. Cama then relied on the judgment in State Bank of India (supra). The Apex Court has in this judgment held that where there was no statutory obligation of the employer to provide the canteen, the ratio laid down in Raha's case (supra) would not be applicable. It further held that there was neither a statutory obligation nor was there any implicit or explicit obligation to maintain a canteen in State Bank of India and, therefore, while agreeing with the decision in Reserve Bank of India's case (supra), the Supreme Court held that the canteen workers employed in State Bank of India canteen would not be considered as bank employees.

19. However, the judgment in State Bank of India (supra) does not refer to the judgment in the case of Indian Overseas Bank (supra), which was delivered a week earlier by the Supreme Court. In the case of Indian Overseas Bank (supra), the Supreme Court was considering an Award of the Industrial Tribunal which had been set aside by the learned single Judge of the High Court and then the Appeal Court had overruled the decision of the learned single Judge. The Appeal Court's decision was upheld by the Supreme Court and the canteen workers of the Indian Overseas Bank were considered as bank employees. Learned counsel for the Corporation relied on Cipla 's case (supra) and urged that there was no relationship of master and servant between the Corporation and the canteen-workmen, and therefore, these workmen could not be granted any relief, we feel that this judgment has no application to the present case. The issue involved in Cipla's case (supra) was whether under the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971, the Industrial Court can give a finding that the Contractor's workmen are workmen of the principal employer when the existence of the relationship of master and servant is disputed by the principal employer.

20. Mr. Cama then relied on the judgment of the Apex Court in Steel Authority of India Ltd. case (supra). The judgment of the Apex Court in Steel Authority of India Ltd. (supra) has referred to almost all the earlier judgments of the Supreme Court in respect of contract workers and has overruled the decision of the Apex Court in Air India Statutory Corporation and Ors. v. United Labour Union and Ors. . We have noted that Raha's case (supra) was not cited before the Supreme Court. The Apex Court in Steel Authority (supra) has analysed all the earlier cases including those cited before us and has come to the conclusion that they fall in three distinct classes as follows:

"(i) where contract labour is engaged in or in connection with the work of an establishment and employment of contract labour is prohibited either because the Industrial adjudicator/Court orders abolition of contract labour or because the appropriate Government issued notification under Section 10(1) of the CLRA Act, no automatic absorption of the contract labour working in the establishment was ordered;

(ii) where the contract was found to be sham and nominal rather a camouflage in which case the contract labour working in the establishment of the principal employer was held, in fact and in reality, the employees of the principal employer himself. Indeed, such cases do not relate to abolition of contract labour but present instances wherein the Court pierced the veil and declared the correct position as a fact at the stage after employment of contract labour stood prohibited;

(iii) where in discharge of a statutory obligation of maintaining canteen in an establishment the principal employer availed the services of a contractor and the Courts have held that the contract labour would indeed be the employees of the principal employer."

21. After considering the contentions raised on behalf of the parties appearing before them and the judgments cited at the bar, the Apex Court in Steel Authority (supra) concluded as under 2001-II-LU-1087 at 1131 and 1132:

"116. ........

The upshot of the above discussion is outlined thus:

(1)(a) Before January 28, 1986, the determination of the question whether Central Government or the State Government is the appropriate Government in relation to an establishment, will depend, in view of the definition of the expression "appropriate Government" as stood in the CLRA Act, on the answer to a further question, is the industry under consideration carried on by or under the authority of the Central Government or does it pertain to any specified controlled industry; or the establishment of any railway, cantonment board, major port, mine or oil field or the establishment of banking or insurance company? If the answer is in the affirmative, the Central Government will be the appropriate Government; otherwise in relation to any other establishment the Government of the State in which the establishment was situated, would be the appropriate Government.

(b) After the said date in view of the new definition of that expression, the answer to the question referred to above, has to be found in clause (a) of Section 2 of the Industrial Disputes Act, if (i) the concerned Central Government company/ undertaking or any undertaking is included therein co. nominee, or (ii) any industry is carried on (a) by or under the authority of the Central Government, or (b) by railway company; or (c) by specified controlled industry, then the Central Government will be the appropriate Government otherwise in relation to any other establishment, the Government of the State in which that other establishment is situated, will be the appropriate Government.

(2)(a) A notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour in any process, operation or other work in any establishment has to be issued by the appropriate Government;

(1) after consulting the Central Advisory Board or the State Advisory Board, as the case may be, and;

(2) having regard to (i) conditions of work and benefits provided for the contract labour in the establishment in questions; and (ii) other relevant factors including those mentioned in Sub-section (2) of Section 10;

(b) inasmuch as the impugned notification issued by the Central Government on December 9, 1976 does not satisfy the aforesaid requirements of Section 10 it is quashed but we do so prospectively i.e. from the date of this judgment and subject to the clarification that on the basis of this Judgment no order passed or no action taken giving effect to the said notification on or before the date of this judgment, shall be called in question in any Tribunal or Court including a High Court if it has otherwise attained finality and/or it has been implemented;

(3) Neither Section 10 of the CLRA Act nor any other provision in the Act, whether expressly or by necessary implication, provides for automatic absorption of contract labour on issuing a notification by appropriate Government under Sub-section (1) of Section 10, prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment;

(4) We overrule the judgment of this Court in Air India's case (supra) prospectively and declare that any direction issued by any industrial adjudicator/any Court including High Court, for absorption of contract labour following the judgment in Air India's case (supra), shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final.

(5) On issuance of prohibition notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse/camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the concerned establishment subject to the conditions as may be specified by it for that purpose in the light of para 6 hereunder.

(6) If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the concerned establishment has been issued by the appropriate Government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications.

We have used the expression "industrial adjudicator" by design as determination of the questions aforementioned requires inquiry into disputed questions of facts which cannot conveniently be made by High Courts in exercise of jurisdiction under Article 226 of the Constitution. Therefore, in such cases the appropriate authority to go into those issues will be Industrial Tribunal/Court whose determination will be amenable to judicial review".

22. In view of the above, learned counsel for the Corporation submits that the Apex Court is of the opinion that the inquiry as to whether contract workers are indeed workers of the contractor or of the principal employer can be determined only by the industrial adjudicator i.e. the Industrial Tribunal/Court alone and the jurisdiction of this Court under Article 226 of the Constitution cannot be exercised in such a case. He submits that the Court can pierce the veil and declare the correct factual position only after the contract labour stands prohibited.

23. Mr. Singhvi for the canteen employees counters this by relying on Quinn v. Leathern, 1901 AC 495 and submits that every case is an authority for what it decides and cannot be quoted for a proposition that may seem to follow logically from it. He submits that the judgments of the Apex Court must be considered for what the actual ratio is and not the inference that one may logically draw from it. According to the learned counsel, the ratio of the judgment in the Steel Authority's case (supra) is contained in paragraph 116 of the judgment reproduced above. He submits that Clause (5) of the paragraph makes it amply clear that the High Court can exercise its jurisdiction once the contract is found to be a camouflage and declare that the canteen employees are workers of the Corporation. He also relied on the judgment of the Supreme Court in K.K. Kochunni v. State of Madras, , wherein it has been held that:

" ........ we are not unmindful of the fact that the view that this Court is bound to entertain a petition under Article 32 and to decide the same on merits may encourage litigants to file many petitions under Article 32 instead of proceeding by way of a suit. But that consideration cannot, by itself, be a cogent reason for denying the fundamental right of a person to approach this Court for the enforcement of his fundamental right which may, prima facie, appear to have been infringed.."

Further, the Supreme Court observed, " ...... As we have already said, it is possible very often to decide questions of fact on affidavits. If the petition and the affidavits in support thereof are not convincing and the Court is not satisfied that the petitioner has established his fundamental right or any breach thereof, the Court may dismiss the petition on the ground that the petitioner has not discharged the onus that lay on him. The Court may, in some appropriate cases, be inclined to give an opportunity to the parties to establish their respective cases by filing further affidavits or by issuing a commission or even by setting the application down for trial on evidence, as has often been done on the original sides of the High Courts of Bombay and Calcutta, or by adopting some other appropriate procedure. Such occasions will be rare indeed and such rare cases should not, in our opinion, be regarded as a cogent reason for refusing to entertain the petition under Article 32 on the ground that it involves disputed questions of fact."

Mr. Singhvi, therefore, submits that the material before us is sufficient to infer that the canteen employees are workmen of the Corporation and are thus entitled to the reliefs claimed in the petition. He further urges that in the event we find there is insufficient evidence, the parties should be called upon to adduce evidence in this Court.

24. Mr. Singhvi sought to urge that the canteen contract which is on record before us is sham as the Corporation has a dominant role to play in its relationship between contractor and the Corporation and that the Corporation is in absolute control of the canteen which is merely being run through the contractor. For this purpose he relied upon the documents placed on record, particularly, Exhibit "C" Office order dated May 12, 1986 issued by Chief I. R. Manager of the Corporation to all employees in head-quarters; Exhibit 'D' -Office order dated May 16, 1986 issued by the Dy. General Manager of the Corporation to all employees in headquarters; Exhibit 'E' -Canteen contract between the Corporation and the Contractor; Exhibit 'F' - Check list canteen kitchen dated January 21, 1992; Exhibit 'H' Memorandum in respect of reconstitution of Canteen Committee dated October 20, 1992; Exhibit T - Circular dated January 18, 1993 also in respect of reconstitution of Canteen Committee; Exhibit T - Office Circular dated May 11, 1993 substituting nomination of one of the members of Canteen Committee and Exhibit 'O'. Minutes of the Canteen Committee meeting held on January 22, 1993. However, in our view, on the face of the aforesaid documents alone no such inevitable conclusion as sought by Mr. Singhvi can be drawn, particularly when the Corporation has denied its obligation to provide canteen facilities to its employees. It is the case of the Corporation that the canteen facilities are being extended by it only as a welfare measure as it is not required to provide canteen facilities to its employees either under any statute or award or settlement or agreement. The affidavit-in-reply filed by the Corporation also raises a serious dispute as to whether the canteen has become part of the establishment of the Corporation or whether the work done by the canteen employees is an integral part of the industry carried out by the Corporation. The resolution of this dispute can effectively be done by recording evidence and not merely on the basis of the material which has been placed before us by the parties. Mr. Singhvi, of course, emphasised that from the documents referred to hereinabove it is established that the Corporation has absolute control of a canteen which is merely being run through the Contractor as the rates of eatables supplied in the canteen are fixed by the Corporation; the items to he supplied in the canteen were also to be fixed by the Canteen Committee which was essentially a committee constituted by the Corporation; the terms and conditions on which the contractor was to run the canteen are such that the Corporation has given them no room to decide as to how the canteen is to be run and that the termination of the contract was only at the option of the Corporation by giving contractor one month's notice without assigning any reason therefor. But we find that most of these facts are disputed in the affidavit-in-reply.

25. Moreover, evidence would be required to find out as to whether there is any right in the Corporation to supervise and control the work done by persons employed by the Contractor and/or whether the Corporation has any right to direct the manner in which the work shall be done by the persons employed by the contractor and whether the Corporation has the right to take any disciplinary action or to direct the canteen employee to do a particular work to find out real relationship of master and servant between the Corporation and the Petitioners. We are of the view, as laid down by Apex Court in Steel Authority of India Ltd.(supra), that determination of the questions whether the Corporation is in absolute control of the canteen which is merely being run through contractor and whether the canteen contract between the Corporation and the Contractor is sham and bogus would require an inquiry into disputed questions of fact which cannot be conveniently made by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India. The appropriate authority to go into such question and issues will be Industrial Tribunal and, therefore, it would be necessary for the petitioners to justify their demand before the Industrial Tribunal/Court, on the basis of both oral and documentary evidence, that they are entitled to be regularised as workers of the Corporation.

26. In view of aforesaid discussion, we pass the following order:

(1) The appropriate Government i.e. the Central Government (as agreed to by both the learned counsel) is directed to make a Reference of the following demand to the Industrial Tribunal for adjudication within two months from today:

(i) whether the contract between the Indian Oil Corporation Limited and the existing canteen Contractor is a sham and bogus one and is a camouflage to deprive the canteen employees of benefits available to permanent workmen of Indian Oil Corporation Limited?

(ii) Whether the workmen employed in the canteen of Respondent No. 1 Corporation should be declared as permanent workmen of Indian Oil Corporation Limited?

(iii) What are the wages and consequential benefits to be paid to the canteen employees?

(2) The Industrial Tribunal should then decide the Reference as expeditiously as possible and in any event not later than December 2002.

(3) Interim orders passed in the Petitions to continue till disposal of the Reference.

27. Writ Petitions disposed of accordingly with no order as to costs.