Union Of India (Uoi) vs Shri O.P. Singla And Anr.
2002 Latest Caselaw 681 Del

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.