[Cites 10, Cited by 0]
Bombay High Court
The Chief General Manager, Mahanagar ... vs The General Secretary, Bombay ... on 9 April, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:16842
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Shabnoor
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 518 OF 2019
The Chief General Manager,
Mahanagar Telephone Nigam Ltd.,
Telephone House, Prabhadevi,
Mumbai 400 028.
Shri R. P. Yadav, Age 57 Years. ... Petitioner
V/s.
SHABNOOR
General Secretary,
AYUB
PATHAN Bombay Telephone Canteen Employees
Digitally signed by
SHABNOOR
AYUB PATHAN Association, C/o Prabhadevi Telephone
Date: 2026.04.09
11:41:35 +0530
Exchange Canteen, 1st Floor,
Dadar (West), Mumbai 400 028. ... Respondent
Ms. Disha Parekh with Ms. Apeksha Sharma i/b NDB
Law for the petitioner.
Mr. Vaibhav Sugdare with Mr. Vishwabhushan Kamble,
Mr. Shaikh Yusuf Ali & Mr. Aniesh Jadhav, for
respondent.
Mr. Adhate & Mr. Suryawanshi, representatives of
MTNL are present.
CORAM : AMIT BORKAR, J.
RESERVED ON : APRIL 2, 2026
PRONOUNCED ON : APRIL 9, 2026
JUDGMENT:
1. By the present writ petition instituted under Article 227 of
the Constitution of India, the petitioner calls in question the
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legality and correctness of the Award dated 4 September 2017
rendered by the Central Government Industrial Tribunal No. 2 at
Mumbai in Reference No.CGIT-2/18 of 1999, whereby the Tribunal
has directed reinstatement of the concerned workmen with
continuity of service along with full back wages.
2. The factual matrix giving rise to the present Petition
indicates that the industrial dispute came to be referred by the
Central Government in exercise of powers conferred under clause
(d) of sub-section (1) read with sub-section (2A) of Section 10 of
the Industrial Disputes Act, 1947, by Order No. L-40011/1/99/IR
(DU) dated 5 April 1999 issued by the Ministry of Labour and
Employment, Government of India, New Delhi.
3. The terms of reference, as formulated by the appropriate
Government, are as follows: "Whether the action of the employer,
Mahanagar Telephone Nigam Ltd., acting through its Chief General
Manager at Prabhadevi, Mumbai, in retrenching the services of (1)
P.S. Naik, (2) M.T. Masnaik, (3) S.K. Shetty, and (4) S. Kumar, who
were employed at the Vile Parle Telephone Exchange, is legal and
justified; and if not, to what reliefs are the said workmen
entitled?"
4. Upon receipt of the aforesaid reference, the Tribunal issued
notices to both parties, who entered appearance through their
respective representatives. The Bombay Telephone Canteen
Employees Association, acting through its General Secretary, filed
its Statement of Claim at Exhibit 7, inter alia asserting that the
concerned workmen were appointed as Bearers on 20 April 1983,
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1 July 1983, 1 July 1983, and 21 December 1984 respectively, in
the departmental canteen at Vile Parle Telephone Exchange of
Mahanagar Telephone Nigam Ltd., Mumbai. It was contended that
the workmen had rendered continuous and unblemished service
without interruption, though no formal letters of appointment
were issued to them. It was further averred that prior to 1988,
approximately 900 employees were working at the said
establishment, necessitating a B-category canteen with a
sanctioned strength of 19 employees, although the canteen was
being operated with only 14 employees. It was further stated that
in February 1988, upon bifurcation of the Vile Parle Telephone
Exchange and shifting of the office of the Area Manager to the
Jeevan Seva Extension Building at Santacruz (West), Mumbai with
effect from 3 February 1988, around 30 staff members were
transferred, and the concerned workmen were also transferred to
the canteen at the said premises.
5. It was further the case of the Association that in the year
1990, the management decided to operate the canteen at the
Jeevan Seva Extension Building through a contractor, and
consequently, the concerned workmen were transferred back to the
Vile Parle Telephone Exchange canteen with effect from 1 April
1990. Thereafter, the services of the concerned workmen came to
be retrenched with effect from 30 September 1990 without
issuance of any notice and without payment of retrenchment
compensation. It was contended that such action was in clear
violation of the mandatory provisions of Section 25F of the
Industrial Disputes Act, 1947, as no compensation was paid at the
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time of retrenchment. On this basis, it was asserted that the
retrenchment was illegal, invalid, and void ab initio, and that the
workmen are deemed to have continued in service with
entitlement to full back wages and continuity of service. It was
further contended that the management reduced the strength of
the canteen workforce by retrenching the concerned workmen
without issuing the requisite notice under Section 9A of the
Industrial Disputes Act, 1947, thereby contravening the provisions
contained in Chapter V of the said Act. On this ground as well, the
retrenchment was alleged to be vitiated in law.
6. The Association additionally contended that vacancies in the
post of Bearers were available at the Vile Parle Telephone
Exchange canteen at the relevant time of retrenchment. It was
further submitted that the decision of the management to run the
canteen at the Jeevan Seva Extension Building through a
contractor was contrary to the provisions of the Contract Labour
(Regulation and Abolition) Act, 1970. On these premises, the
retrenchment was impugned as illegal and unjustified, and a relief
of reinstatement with full back wages, continuity of service, and all
consequential benefits including those arising from the
recommendations of the Fourth and Fifth Pay Commissions was
sought.
7. The employer, Mahanagar Telephone Nigam Ltd., opposed
the claim by filing its Written Statement at Exhibit 10, contending
that the concerned workmen were merely casual workers who
were neither issued formal appointment letters nor recruited
through any recognised procedure such as the employment
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exchange. It was further contended that no service rules of MTNL
were applicable to them. It was also submitted that the canteen at
Vile Parle Telephone Exchange was administered by a
departmental canteen committee comprising the Divisional
Engineer as Chairman, the Sub-Divisional Engineer as Secretary,
and representatives of staff and unions as members. It was
asserted that running the canteen was not a statutory obligation
but only a welfare measure, and that space was provided within
the premises for such purpose. It was further submitted that MTNL
provided subsidy to the extent of 70 percent of wages of regular
canteen employees having appointment orders from the
Department of Telecommunications, while the remaining 30
percent was generated through canteen income. The existence of
any employer employee relationship between MTNL and the
concerned workmen was specifically denied. MTNL further
contended that prior to 31 August 1990, the Vile Parle Telephone
Exchange had an employee strength exceeding 500, thereby
justifying a B-category canteen requiring 14 employees. However,
upon transfer of approximately 230 administrative staff to another
building at Santacruz, the strength fell below 500, resulting in
reclassification of the canteen from B-category to C-category,
which required only 10 employees. In view thereof, the services of
the concerned workmen were terminated with effect from the
close of working hours on 30 September 1990 by order dated 31
August 1990, following the principle of last come first go. It was
contended that the provisions of the Industrial Disputes Act, 1947
were not applicable to such workers. The applicability of Sections
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9A and 25F and the provisions contained in Chapter V-B of the Act
were specifically denied. It was also denied that the canteen at the
LIC Building, Santacruz, had been given on contract in violation of
the Contract Labour Act, 1970. The employer therefore prayed for
rejection of the reference with costs.
8. The concerned workmen filed their Rejoinder at Exhibit 12,
contending that the issue of maintainability of the reference had
already been adjudicated by the Tribunal in its earlier Award dated
1 April 1996 in Reference No. CGIT-2/38/1993 pertaining to the
same canteen. It was further submitted that conciliation
proceedings were undertaken before the Assistant Labour
Commissioner, but the same failed due to non participation on the
part of the management. It was further stated that upon failure of
the Government to refer the dispute thereafter, the Association was
constrained to approach the Bombay High Court by filing a writ
petition in 1998, and by order dated 12 February 1999, the High
Court directed the Government to make an appropriate reference
to the Industrial Tribunal. Pursuant to the aforesaid directions, the
reference came to be made on 5 April 1999. It was therefore
contended that any delay in making the reference was attributable
to the inaction on the part of the Government and the
management, and not to the workmen, and that no delay or laches
could be attributed to them.
9. The learned Advocate appearing on behalf of the petitioner
submits that the learned Presiding Officer has failed to appreciate
that no enforceable or legally protected right accrued in favour of
the concerned workmen so as to claim continuity of service. It is
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contended that the services of the workmen stood terminated as
far back as 30 September 1990. According to the petitioner, the
mere fact that the workmen had rendered intermittent service for
a period of approximately six to seven years in a canteen situated
within the MTNL Telephone Exchange premises would not, by
itself, confer any legal right to claim continuity in service. It is
further urged that while directing reinstatement, the learned
Presiding Officer failed to consider the material fact that two of the
workmen, namely S. Kumar, who expired on 20 May 2001, and
Maruti Masnaik, who expired on 25 January 1997, were no longer
alive, and therefore the question of reinstatement in their case did
not arise. It is submitted that though applications were moved for
bringing the legal heirs of the deceased workmen on record, the
learned Presiding Officer has erroneously recorded in paragraph
27 of the Award that only one workman, namely Maruti Masnaik,
had expired, which, according to the petitioner, reflects clear non
application of mind.
10. It is further submitted that the learned Presiding Officer
committed an error in holding that merely because a canteen is
run as a welfare measure for employees, it would automatically
constitute a part of an industrial establishment. It is contended
that the employees working at the Vile Parle Telephone Exchange
of MTNL were not industrial workmen, and the establishment itself
does not qualify as an "industry" in that context.
11. It is urged that the canteen in question was primarily
catering to administrative staff, and therefore, the conclusion
drawn by the learned Presiding Officer that the said canteen falls
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within the ambit of "industry" as defined under Section 2(j) of the
Industrial Disputes Act, 1947 is wholly erroneous and
unsustainable in law.
12. It is further submitted that the total number of employees
working in MTNL cannot be taken into account for determining
the applicability of Section 25K of the Industrial Disputes Act,
1947. It is contended that the concerned workmen were
admittedly not employees of MTNL, but were engaged by the
canteen committee. The relief sought pertains to reinstatement in
the canteen. Hence, for the purposes of applicability of Chapter V-B
of the Act, the relevant workforce would be the number of
employees working in the canteen, which was only 19. In such
circumstances, it is submitted that the provisions of Chapter V-B
would have no application.
13. Per contra, the learned Advocate appearing on behalf of the
respondents submits that upon submission of the failure report in
the conciliation proceedings, the workmen had a legitimate
expectation that the appropriate Government would refer the
dispute to the Industrial Tribunal. However, as the Government
failed to do so, the Association was constrained to invoke the writ
jurisdiction of this Court by filing a petition in the year 1998. It is
submitted that it was only pursuant to the order dated 12 February
1999 passed by the Bombay High Court that the appropriate
Government made a reference to the Tribunal by order dated 5
April 1999. It is further contended that the Association had taken
all necessary steps by raising an industrial dispute through its
letter dated 18 September 1990, pursuant to which conciliation
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proceedings were conducted by the Assistant Labour
Commissioner.
14. It is further submitted that since the management failed to
participate in the conciliation proceedings, the same resulted in
failure, and accordingly a failure report came to be submitted to
the Government in the year 1993. It is, therefore, contended that
the delay in making the reference is attributable solely to the
inaction on the part of the Government and the management, and
not to the workmen. The respondents thus submit that the delay
stands sufficiently explained and no laches can be attributed to
them. The learned Advocate for the respondents has further placed
reliance upon the decision rendered in Appeal No. 21 of 1989 in
Writ Petition No. 3298 of 1998 in the case of Bombay Telephone
Canteen Employees Association and M.C. Venkatraman and others,
wherein the Court, while considering the submissions advanced,
observed that the apprehension expressed on behalf of the
appellant regarding lack of jurisdiction of the competent authority
to adjudicate the dispute, on the ground that the canteen was run
departmentally by a State entity, was without merit. The Court
further observed that even if such an objection were to be raised, it
would not sustain, and in order to dispel such apprehension, a
statement was made on behalf of the respondent authorities that
no such objection would be raised before the competent authority.
In view of the aforesaid observations, it is submitted that the
departmental canteen of MTNL would fall within the scope and
ambit of "industry" as defined under Section 2(j) of the Industrial
Disputes Act, 1947.
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15. It is further submitted that the evidence on record clearly
demonstrates that the concerned workmen were engaged in or
about the years 1983 to 1984 in the canteen at Vile Parle
Telephone Exchange, Mumbai, and continued in service without
interruption until the date of their retrenchment. It is contended
that it is not the case of the management that the concerned
workmen had failed to complete 240 days of continuous service
within a period of 12 months. The evidence of the Union witness
establishes that the workmen were performing duties of a regular
and perennial nature. It is also not in dispute that at the time of
retrenchment, other employees continued to work at the
establishment and were availing the canteen facilities. It is further
submitted that the management witness has admitted that the
concerned workmen had been working as Bearers since 1983, and
has also admitted that at the relevant time, approximately 500 to
700 employees were working at the Vile Parle Telephone Exchange
when the services of the concerned workmen came to be
terminated on 30 September 1990. It is submitted that the
concerned workmen were not given three months' notice as
mandated under Section 25N of the Industrial Disputes Act, 1947.
It is contended that Chapter V-B of the said Act governs the
conditions precedent to retrenchment in certain establishments
and mandates that where an establishment employs more than
100 workmen, retrenchment cannot be effected without issuing
three months' notice or wages in lieu thereof and without
obtaining prior permission from the appropriate Government.
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16. It is further submitted that in the present case, no such prior
permission was obtained. The management witness has also
expressed lack of knowledge regarding compliance with Section
9A of the Act as well as the requirement of obtaining prior
permission from the Government. In the absence of such
compliance, it is submitted that there is a clear violation of the
mandatory provisions of Sections 25N and 25F of the Industrial
Disputes Act, 1947, rendering the retrenchment of the concerned
workmen illegal and void in law.
REASONS AND ANALYSIS:
17. I have carefully gone through the rival submissions and the
record which has been placed before this Court. The controversy is
about the very nature of the work of the concerned employees, the
character of the canteen where they were working, the effect of
their long engagement, and the legality of the action by which
their services were brought to an end. The petitioner says that no
enforceable right of continuity ever arose in favour of the
workmen. The respondents say that the workmen had in fact
served for years together, that the dispute had been raised in time,
and that the delay in reference was not their fault. On these facts,
the first task of the Court is to see whether the Award suffers from
any error so serious that it needs interference in supervisory
jurisdiction.
18. The submission of the petitioner that the workmen were only
casual and intermittent workers cannot be accepted in a
mechanical manner. In labour matters, the Court does not look
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only at the label put by the management. The real nature of the
engagement matters. Here, the evidence placed by the Union and
the admissions coming from the management side show that the
concerned workmen were working as Bearers in the canteen from
1983 onwards and continued for a long period till their
retrenchment on 30 September 1990. The management witness
has also admitted that they had been so working since 1983. This
is a case of workers who were connected with the canteen work
for a substantial period and who were used for duties of regular
nature. When such material is on record, it is not possible to say
that they had no legal footing at all.
19. The argument of the petitioner that continuity of service
could not have been granted merely because the workmen had
worked for six to seven years is also not strong on the evidence.
Length of service alone may not create a right in every case. But
length of service, when read with the nature of duties and the
admitted fact that the work was continuing, and the canteen was
functioning for the benefit of employees, is an important
circumstance. It shows that the workmen were not brought in for a
one time or temporary task. They were part of the working
arrangement of the canteen for many years. The Award, therefore,
cannot be said to have gone wrong only because the workmen
were not issued formal appointment letters. In industrial
adjudication, absence of a letter is not always the end of the
matter. The Court must see the substance and not merely the paper
form.
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20. The petitioner has placed emphasis on the fact that two of
the workmen, namely S. Kumar and Maruti Masnaik, had died
before the Award and, therefore, reinstatement could not have
been ordered in their favour. That submission has weight so far as
the form of relief is concerned. A dead person cannot be physically
reinstated. But that fact by itself does not destroy the entire
foundation of the claim. If proceedings were already pending and
applications were made to bring legal heirs on record, then the
claim does not simply vanish. The Tribunal ought to have been
careful in recording the correct position regarding the death of the
workmen. The petitioner is right that paragraph 27 of the Award
appears to contain a mistake in stating that only one workman had
expired, when the material placed before the Court shows that two
had died. That does show some lack of care in narration. Yet, that
factual error by itself does not answer the larger issue whether the
retrenchment was legal. The main issue remains untouched by that
mistake.
21. The challenge of the petitioner that the canteen was only a
welfare measure and therefore could not be treated as part of an
industrial establishment also does not carry the matter much
further. A canteen run inside an establishment for the benefit of
the employees is not some separate and detached activity in every
case. Its character depends upon the facts. Here, the canteen was
not a private outside unit. It was a departmental canteen within
the premises of MTNL, and the evidence shows that it catered to
the staff working there. The argument that the staff of MTNL were
not industrial workers and that MTNL was not an industry in that
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context cannot be accepted in a narrow way, because the canteen
itself was an integral facility connected with the establishment.
Once the canteen is so linked with the establishment and functions
for the benefit of the employees, the conclusion of the Tribunal
that it falls within the scope of Section 2(j) cannot be lightly
disturbed unless it is shown to be wholly unreasonable. On the
record before me, that conclusion is not shown to be perverse.
22. The petitioner has also argued that for the purpose of
Chapter V-B, the relevant strength is not the total strength of
MTNL, but only the strength of the canteen. This is a more
substantial submission and must be noticed carefully. If the
canteen alone is treated as the unit, then the number of workers
may be small. But the respondents have pointed out that the
canteen was part of the departmental set-up of MTNL and that the
strength of the establishment at the relevant time was much above
the threshold. The management witness has admitted that at the
time of retrenchment there were about 500 to 700 employees
working at Vile Parle Telephone Exchange. That is a significant
fact. It shows that the canteen was not running in isolation from
the larger establishment. The canteen was there because the larger
establishment required it. The very justification for the canteen
depended upon the strength of the employees in the
establishment. The reclassification theory put forward by the
management may have some surface appeal, but the record does
not show that the work of the canteen had become truly
independent or that the workers were outside the protection of the
Act.
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23. The respondents are also right in saying that the workmen
had raised the dispute as early as 18 September 1990 and that
conciliation was thereafter initiated. The management did not
participate in those proceedings. A failure report was sent to the
Government in 1993. The workmen could not be blamed for the
Government not making an immediate reference. The record
further shows that the respondents had to approach this Court in
1998 and only after the order dated 12 February 1999 did the
Government make the reference on 5 April 1999. This sequence
matters. Where the workmen have acted, and the process has
moved at a slow pace because of the Government and the
management, it is not proper to fasten laches on the workmen.
The delay has been explained by the material on record. I do not
find any reason to say that the respondents slept over their rights.
24. Much was said by the petitioner that the concerned workmen
were engaged by the canteen committee and not by MTNL directly.
That fact, even if accepted in the manner suggested, does not end
the matter. In labour law, the absence of a direct formal
appointment is not always decisive where the work is done in the
premises of the establishment, for its benefit, under a structure
controlled by the establishment, and where the canteen forms part
of the working arrangement of that establishment. The evidence,
as placed before the Tribunal, shows that the workmen were
functioning as Bearers in the canteen for years. The management
cannot, on one hand, use their labour for long years and, on the
other hand, deny all responsibility merely by saying that the
canteen committee engaged them. The Tribunal was therefore
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justified in looking beyond this form and in examining the real
relationship.
25. The contention based on Section 9A and Section 25N also
has to be dealt with in the light of the admitted facts. The
petitioner says that Chapter V-B does not apply because only the
canteen strength should be counted. The respondents say that the
establishment strength was much above the statutory threshold
and that no prior permission was taken. On the record, the
management witness has not been able to clearly show compliance
with the mandatory statutory requirements. He has even expressed
ignorance on the question of compliance with Section 9A and prior
governmental permission. When a statute requires notice, wages in
lieu of notice, compensation, and prior permission in a proper
case, these are not empty formalities. They are conditions
precedent. If those steps are not shown to have been taken, the
retrenchment cannot stand.
26. The petitioner has also tried to place the canteen outside the
definition of industry by saying that it served administrative staff
and not industrial workers. The use of the expression "industrial
workers" in that submission is too narrow and artificial for the
facts of this case. The evidence shows that the canteen was
running inside the telephone exchange premises for the benefit of
the employees. The function of the canteen was directly linked to
the establishment. The decision relied upon by the respondents
also supports the view that a departmental canteen of this nature
can fall within the statutory meaning of industry. The Court is not
required to give a strained or restrictive meaning when the
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surrounding facts show an organised activity connected with the
establishment and supported by it.
27. For all these reasons, the Award does not suffer from such an
error as would justify interference under Article 227 of the
Constitution. The Tribunal has taken note of the essential facts. It
has considered the long service of the workmen, the nature of the
canteen, the absence of proper statutory compliance before
retrenchment, and the conduct of the parties during conciliation
and reference. There may be one factual mistake in the Award
regarding the death of the workmen, but that mistake does not
destroy the reasoning on the core issue. The real question is
whether the retrenchment was legal and justified. On the material
before the Tribunal, and on the material shown before this Court,
the answer is no. The retrenchment was not backed by the
mandatory safeguards of law. The Award directing reinstatement
with continuity of service and back wages, therefore, cannot be
said to be illegal, arbitrary, or without evidence.
28. Accordingly, I find no merit in the writ petition. The same
deserves to be rejected.
29. In view of the foregoing discussion, the following order is
passed:
(i) The writ petition stands dismissed;
(ii) The Award dated 4 September 2017 passed by the
Central Government Industrial Tribunal No. 2, Mumbai in
Reference No. CGIT-2/18 of 1999 is upheld;
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(iii) However, it is noted that out of the four concerned
workmen, three workmen, namely S. Kumar, Maruti
Masnaik, and S.K. Shetty, have expired during the pendency
of the proceedings. Insofar as the said deceased workmen
are concerned, the direction of reinstatement shall not
survive. Their legal heirs shall, however, be entitled to
receive monetary benefits flowing from the Award, in
accordance with law;
(iv) Insofar as the surviving workman, P.S. Naik, is
concerned, the respondent employer is directed to reinstate
him in service with continuity of service. He shall also be
entitled to full back wages and all consequential benefits, in
terms of the Award;
(iv) The aforesaid directions shall be complied with within
a period of twelve weeks from the date of this order;
(v) Pending interim applications, if any, stand disposed of.
(AMIT BORKAR, J.)
