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Chennai Port Trust Industrial v. Union of India - W.P.No.6872 of 2001  RD-TN 612 (24 August 2005)
IN THE HIGH COURT OF JUDICATURE AT MADRAS
THE HONOURABLE MR.JUSTICE K.P.SIVASUBRAMANIAM
W.P.No.6872 of 2001
Chennai Port Trust Industrial
Employees Canteen Workers Welfare
Association, represented by its
54, Prakasam Salai, Broadway
Chennai-600 108. .. Petitioner -Vs-
1. Union of India
represented by the
Secretary to Government
Ministry of Surface Transport
1, Parliament Street
New Delhi-110 001.
2. Union of India, represented by
the Secretary to Government
Ministry of Labour
Shram Shakthi Bhavan
3. Chennai Port Trust
rep. by its Chairman
4. Chennai Port Trust Industrial
Employees Cooperative Canteen
Ltd. XNC 561
represented by its President
Port Trust, Chennai-600 001.
5. The Registrar of Cooperative
Societies, 170, E.V.R. High Road
Kilpauk, Chennai-600 010. .. Respondents PRAYER: Writ petition filed under Article 226 of the Constitution of India for the issue of a writ of Mandamus directing respondents-3 and 4 to treat the members of the petitioner Association, whose names are furnished in the typed set of papers employed by the third respondent through the fourth respondent in the canteen, as regular employees of the Port Trust, Chennai, and pay them all attendant and monetary benefits from the date of their appointment in the fourth respondent on par with the regular employees of the third respondent by declaring the members of the petitioner Association as the direct employees of the Chennai Port Trust.
For petitioner : Mr.K.Chandru
For respondents-1 & 2 : Mr.J.Madanagopal Rao
For 3rd respondent : Mr.Chandrasekaran for M/s.Aiyar & Dolia and Mr.R.Arumugam For 4th respondent : Mr.S.Thirumavalavan For 5th respondent : Mr.R.Lakshminarayanan Government Advocate :ORDER
The petitioner is Chennai Port Trust Industrial Employees Canteen Workers Welfare Association, seeking for a Mandamus to direct respondents-3 and 4 to treat the members of the Association as regular employees of the Port Trust, Chennai and pay them all the attendant and monetary benefits from the date of their appointment in the fourth respondent canteen on par with the regular employees of the third respondent, declaring them as direct employees of the Chennai Port Trust.
2. The petitioner is a registered association. According to the petitioner, Section 42 of the Major Port Trusts Act, 1973 (hereinafter called "the Act") under which the Chennai Port Trust was formed, the authorities shall provide certain essential services to the Board Workers. It has an Engineering Workshop which is a registered factory under the Factories Act with more than 2500 employees. In terms of Section 46 of the Factories Act, it was the statutory obligation on the part of the Port Trust authorities to provide canteen facilities to the workers. More than 30,000 workers were employed in different Units of the Chennai Port Trust. It is further stated that the third respondent, in order to fulfil the statutory obligations, initially arranged for a canteen to be run by the Annapoorna Cafetaria on a nonprofit basis by providing them rent free premises. The Board of the Port Trust, by resolution No.319 dated 23.8.1962, resolved to run the Trust's Industrial canteen on Cooperative basis.
3. The decision was subject to the following terms and conditions: (i) Rules framed by the Cooperative society shall be subject to the approval of the Chairman;
(ii) Every industrial worker shall be given an opportunity to become a member of the society;
(iii) The Chairman of the Cooperative Society shall be a nominee of the Port Trust administration;
(iv) The Port Trust administration shall have the right to audit the accounts of the canteen;
(v) The Port Trust shall supply free of charge electricity and water and adequate equipment besides providing rent free premises; (vi) The Port Trust Administration shall appoint and pay the staff for the running of the canteen.
4. Subsequently, steps were taken for the formation of a cooperative society and the Madras Port Trust Industrial Employees Cooperative Canteen Ltd. was registered on 25.3.1964 as a Cooperative Society. As per bye-law No.15 of the fourth respondent society, the President as well as four Directors shall be nominated by the Registrar in consultation with the Chairman of the Port Trust. Membership will be confined to the employees of the Port Trust Workshop.
5. It is further stated that the President of the Society, who shall be a nominee of the third respondent, will have general control over the affairs of the Canteen and he will be the competent authority to appoint all the employees except the Secretary who shall be appointed by the Board. The petitioner further states that the Port Trust provides for expenditure towards the staff employed by the canteen, free water supply, electricity, building and maintenance, etc. The prices of the food stuffs supplied by the canteen are comparatively very cheap intended for supply within the Port Trust premises and mainly for Port Trust employees. The fourth respondent has established four Branches. Many of the employees work round the clock. The canteen supplies morning tiffin, meals, evening tiffin and night tiffin besides tea, coffee and all beverages. In the affidavit, certain details relating to the role of the President of the Trust having control over all materials, inclusive of policy matters relating to the canteen etc., are mentioned. The Port Trust meets the entire cost of the staff employed in the canteen. All the rules and regulations and the leave regulations applicable to the Port Trust are also made applicable to the petitioners.
6. It is further stated that the Supreme Court, in M.M.R.KHAN Vs. UNION OF INDIA (AIR 1990 SC 937), has held that the workers engaged in the statutory canteens as well as engaged in the non-statutory recognised canteens in the Railway Establishments are Railway employees and they are entitled to be treated as such. In a subsequent ruling also in INDIA PETROCHEMICALS CORPORATION Vs. SHRAMIK SENA AND OTHERS (19 99-II-LLJ 696), it was held that the workmen in the canteens of the Corporation are the workmen under the Management.
7. It is further stated that the workers of the Union of Bombay Port Trust filed W.P.No.3513 of 1991 before the Bombay High Court, praying for a declaration and direction that the canteen workers employed through various cooperative societies are entitled to be treated as regular employees of the port trust with effect from the date on which they had entered into service. The Bombay High Court, by judgment dated 25.8.1994, allowed the writ petition, declaring the canteen employees employed through Cooperative societies as regular employees of the Port Trust. The Bombay Port Trust authorities were directed to treat the employees working in those canteens as employees of Bombay Port Trust. Reference was made to the V Pay Commission Report, dealing with the canteen staff.
8. In spite of all the aforesaid features which are sufficient to hold that the canteen was part and parcel of the Port Trust and several representations having been made to the Port Trust authorities, there was no positive response and hence, the petitioner had approached this Court.
9. In the counter affidavit filed by the Central Government, it is contended that under Section 42 of the Port Trust Act, 1963, there is no provision specifying any essential service to the Port Trust apart from goods landing, shipping, removing, shifting, transporting and storing or delivery goods brought within the premises. Except for some of the functions as dealt with in the writ petition, according to the respondent, the Trust was not rendering any other service to the workers under Section 42 of the Act. In fact, some of the employees were inducted into Cooperative Societies Service Rules by the Canteen Management and as such, they cannot seek for the relief sought for in the writ petition. It is further stated that the canteen employees cannot be brought under the Schedule of Trust employees and that the employees of the Trust are recruited only through employment exchange or by candidates who have been specifically trained under the Apprentice Act. It is further stated that all matters relating to the establishment and disciplinary action against the employees, the right to hold disciplinary proceedings lie only with the canteen Management and the Port Trust had no role to play. Therefore, the demand of the petitioner that the employees of the canteen should be given the status of Port Trust employees simply because the Trust meets the entire cost of the canteen staff is not acceptable.
10. The respondent further states that the Supreme Court in M.M.R. KHAN Vs. UNION OF INDIA (AIR 1990 SC 937), has held that the workers engaged in the statutory canteens as well as engaged in non-statutory canteens in Railway Establishment are railway employees and are entitled to be treated as such. It is further stated that as far as the decision of the Bombay High Court was concerned, it was held that the V Pay Commission's recommendations were applicable only to the canteen workers under the Central Government and not to the canteen employees of major ports. The canteens are not being run by the Trust as assumed by the petitioner, but was being run by the employees by electing themselves as Committee Members like any other cooperative society.
11. In the counter affidavit filed on behalf of the third respondent, it is stated that the Trust was not rendering any service to the workers within the meaning of Section 42 of the Major Port Trust Act. It is further stated that the employees of the Trust are recruited either from employment exchange or candidates who have been specifically trained under the Apprentice Act. All the establishment matters including disciplinary actions, lie with the canteen Management and the Port Trust has no role in those matters. The demand of the petitioners that the employees of the canteen should be given same status as the Board's employees is not acceptable. It is true that the Trust has a pervasive control over the affairs of the canteen and that will not be a sufficient reason to uphold the claims of the petitioner. It is further submitted that the canteen employees have been inducted only by the canteen Management under the Cooperative Rules, and therefore, there was no question of treating them as employees of the Port Trust.
12. In the counter affidavit filed by the fourth respondent also, similar contentions have been raised and it is stated that the fourth respondent has no power to declare all the employees working in the canteen as Port Trust employees.
13. Mr.K.Chandru, learned senior counsel appearing for the petitioner Union, contends that the extent and manner of control over the canteen by the Port Trust Authorities leave no room for any doubt that the Management had always recognised the indispensable nature of establishment of the canteen and hence, the attempt on the part of the respondents to make it appear as though the canteen was not part of the establishment of the Port Trust cannot be sustained. That apart, according to the learned counsel, Section 46 of the Factories Act, 1948, requires the State to make Rules for establishing canteen in any specified factory, wherein, more than 250 workers were ordinarily employed. Reference was made to the judgment of the Supreme Court in NATIONAL THERMAL POWER CORPORATION Vs. KARRI POTHU RAJU AND OTHERS (2003III-LLJ 567) in support of the contention that the factory was under an obligation under Section 46 of the Factories Act, to run the canteen. The Management cannot contend that the workers were engaged through contractor and were not performing any work incidental to the activities of the Management.
14. Learned senior counsel also took me through the history of the establishment of the canteen right from the beginning, namely, Annapoorna. The Port Trust retains various controls over the functioning of the canteen and it would be idle to contend that the canteen could be run independent of the Port Trust and would be beyond the control of authorities concerned with the Port Trust. Learned senior counsel also referred to Section 2(k)(v) of the Factories Act. " Manufacturing Process" includes construction, re-construction, repairing, refitting, finishing or breaking up ships or vessels. It was therefore clear that at least a portion of the Port Trust was a factory. Reference was also made to the judgment of the Bombay High Court dealing with the employees of the canteen established at Bombay Port under very similar facts and circumstances, holding them as employees of the Bombay Port Trust.
15. Learned counsel representing the third respondent referred to Section 23 of the Major Port Trusts Act, 1963. Section 23 deals with the Schedule of Board's staff. According to the learned counsel, employees of the canteen are not included in the Schedule. The canteen was established by a cooperative society provided by the Special Officer and the conditions of service and disputes were settled by agreements. There was only one factory in the entire premises and that factor alone cannot lead to the presumption that the entire premises was a factory.
16. Reference was made to the judgment of the Supreme Court in PARIMAL CHANDRA RAHA Vs, L.I.C. OF INDIA (AIR 1995 SC 1666) and to the classification adopted by the Supreme Court for arriving at the conclusion as to whether the employees of the canteen can be treated as part of the main establishment. Reference was also made to the observation that the obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run the canteen. The only fact that facilities were provided by the Port Trust for running the canteen cannot make the canteen as part of the establishment.
17. Reliance was also placed on the judgment of the Supreme Court in INDIAN PETROCHEMICALS CORPORATION LTD. Vs. SHRAMIK SENA AND OTHERS (1999-II-LLJ 696) and to the judgment in HARI SHANKAR SARMA Vs. M/S. ARTIFICIAL LIMBS MANUFACTURING CORPORATION (AIR 2002 SC 226). On the facts of that case, it was held that the agreement between the contractor and establishment showed that the control over appointment, confirmation or dismissal from service of employees was exercised by the contractor and not the establishment. In the said background, it was held that even assuming that the Government of India Undertaking was a specified industry within the meaning of Section 46 of the Factories Act, 1946, that fact by itself would not lead to the conclusion that the employees in the canteen are employees of the Government of India Undertaking.
18. Learned counsel also contended that statutory canteens alone could be treated as canteens run by the establishment and such employees alone can be treated as belonging to the establishment itself. As far as non-statutory canteens are concerned as in the case of the petitioner canteen, it was not possible to hold that the employees of the canteen should be treated as part and parcel of the establishment.
19. Learned counsel for the respondent also contended that the issue requires consideration of several facts and circumstances which could be gone into only in an appropriate proceeding before the Labour Court/Labour Tribunal and cannot be determined in a proceeding under Article 226 of the Constitution. On the facts of the present case, it cannot be disputed that the employees were engaged through contractor and hence, cannot be treated as employees of the main establishment vide the judgment of the Supreme Court in STEEL AUTHORITY OF INDIA LTD. Vs. NATIONAL UNION WATER FRONT WORKERS (AIR 2001 SC 3527).
20. I have considered the submissions of both sides.
21. It is settled proposition that a canteen, established in a factory, will not become a part of the establishment automatically only by virtue of Section 46 of the Factories Act. To determine the issue, several factors have to be noted, such as the manner in which the canteen came to be established; the extent of control over the administration of the canteen by the main establishment; whether the running of the canteen was indispensable, whether funds and other requirements were provided for the establishment for the running of the factory/establishment, whether there was administrative control etc., are all factors which are relevant for concluding the issue as to whether the canteen was a part of the establishment. In the said context, several factors have been stated in detail in the affidavit in support of the writ petition tracing the establishment of the Annapoorna canteen and subsequent events. A perusal of the counter affidavits filed by the respondents disclose that such detailed averments have not been specifically denied beyond stating that the Management of the Port Trust have no control over the functioning of the canteen and they do not have any power to deal with the service conditions of the employees. Apart from the absence of any specific denial, the respondents do not dispute the various assertions on the part of the petitioner regarding the extent of control which the Port Trust have over the administration of the canteen and that the very survival of the canteen depends on the patronage by the Port Trust.
22. The following facts would clearly bring out several facts and circumstances emphasizing the indispensability of the canteen as well as in respect of the extent of the administrative control exercised over the canteen by the fourth respondent establishment:
(i) The fact that the establishment is kept open during the entire 2 4 hours with employees working in several shifts are not denied. Thereby, the necessity of the workmen to have their food inside the factory itself is confirmed and that the canteen is mainly intended only for the workers. (ii) The fact that the Rules framed by the Society for running the canteen shall be subject to the approval of the Chairman is not denied. This proves that the ultimate control of the administration of the canteen is with the Port-Trust.
(iii) It is only the workers belonging to the Port Trust who are eligible to become members of the society and not others.
(iv) It is only the nominee of the Port Trust who can act as the Chairman of the Cooperative Society.
(v) The Port Trust administration has the right to audit the accounts of the canteen.
(vi) Electricity and water are supplied by the Port Trust free of charge. The premises is also held by the society rent free. (vii) As per bye-law 15, the fourth respondent Society, the President as well as four other contractors shall be nominated by the Registrar only in consultation with the Chairman of the Chennai Port Trust. (viii) The Port Trust provides cost of the staff employed by the canteen, maintains the building, reimburses 100 of the fuel costs and all the benefits to the canteen employees.
(ix) The prices of the food stuff are very cheap and the food is carried in tri-cycles to the workers in the marshalling yard, ONGC Pipeline, Oil Dock, Diesel Loco, and such other places where a canteen cannot be established and specifically intended only for the workers.
(x) The Executive Engineer (Mechanical) of the Port Trust has been nominated as the President of the canteen and the entire canteen affairs are handled and controlled by the Chief Mechanical Engineer of the Port Trust. (xi) The financial matters are controlled by the Financial Adviser and Chief Accounts Officer of the Port Trust.
(xii) The President of the fourth respondent controls all policy matters concerning the canteen.
(xiii) It is a matter of common knowledge that at least as far as Chennai Port Trust is concerned, it is located in a place that the nearest restaurant or canteen would be at least two to three kilometres away from the entrance of the Port Trust. Therefore, the canteen is a must not only for employees, but also for the entire staff at various levels and also visitors having official and commercial dealings with the Port Trust. The Port Trust itself is a very large and sprawling area from one end to the other. Therefore, the canteen is an indispensable necessity to the Port Trust.
23. None of the aforesaid positive claims by the petitioner are denied by the respondents.
24. It is also necessary to bear in mind that the provisions of the Factories Act, 1948 are undoubtedly applicable to the Port Trust, considering the definition "manufacturing process" under Section 2(k)(v). The process of construction, re-construction, repairing, refitting, finishing or breaking up of ships or vessels is defined as one of the manufacturing processes and thus, the Port Trust requires to be classified as a factory. It is in fact admitted that one part of the Port Trust is factory. In the said background, Section 46 shall apply to the premises of the Port Trust and hence, the canteen has to be deemed as a statutory canteen.
25. Even assuming for the sake of discussion that the canteen is not a statutory canteen and not falling under any of the provisions of either the Major Port Trust Act or the Factories Act, having regard to the circumstances under which the canteen came to be established as an indispensable requirement for the day-to-day functioning of the Port Trust, the welfare and interest of the employees and the extent of control which the management of the Port Trust has and in fact been exercising over the affairs of the canteen, would make it indisputable that the running of the canteen is part and parcel of the requirements of the Port Trust and that the very survival of the canteen depends on the patronage by the Port Trust and ultimate supervisory control of the administration by the Port Trust clinch the issue.
26. In TAMIL MANILA THOZHILALAR SANGAM Vs. TAMIL NADU ELECTRICITY BOARD, MADRAS & OTHERS (1998 (2) LLJ 751), a Full Bench of this Court had to consider the status of the canteen run by the Tamil Nadu Electricity Board. The Full Bench took note of the manner in which the canteen came to be established and the food items supplied for the needs of the staff members and workers in the power station. It was held that the canteen was a part of Ennore Thermal Power Station and the workers in the canteen are workers of the Tamil Nadu Electricity Board.
27. In INDIAN PETROCHEMICALS CORPORATION LTD. & ANOTHER Vs. SHRAMIK SENA & OTHERS (1999-II-LLJ-696), on the facts, the Supreme Court found that the persons mentioned in the writ petition were working in the canteen in the factory and the Management was treating them as persons employed on contract basis through the contractor. The Court found that the factory was governed by the Factories Act, 1948. It was held that by virtue of Section 46 of the Factories Act, the workmen working in the canteen ipso facto became the regular workers of the Management. The High Court held that the employees were entitled to be absorbed in the employment of the factory. The Supreme Court, agreeing with the findings of the High Court, dismissed the appeal of the Management and held that the canteen run in the establishment was a statutory canteen and that the workmen in the canteen were in fact workmen of the appellant Management. In arriving at the conclusion, the Supreme Court took note of the fact that the canteen had been there since the inception of the factory and that the workmen have been employed for long number of years despite the change of the contractors and that the premises, furniture, fixtures, fuel, electricity, etc., were provided for by the Management. It was also noticed that the supervision and control of the canteen was exercised by an officer authorised by the Management. It is pertinent to bear in mind that the facts of this writ petition also correspond to the said findings.
28. In NATIONAL THERMAL POWER CORPORATION Vs. KARRI POTHURAJU AND OTHERS (2003-III-LLJ 567), the Supreme Court held that the Management itself is under an obligation under Section 46 of the Factories Act, 1 948, to run the canteen and that it would be too late in the day to contend that the workers of the canteen were engaged through contractors and they were not performing any work incidental to the activities of the establishment.
29. I had an occasion to deal with W.P.No.10907 of 1998 (Order dated 17.6.2004) - (TUTICORIN PORT TRUST DEMOCRATIC STAFF UNION Vs. TUTICORIN PORT TRUST) in which also, the very same issues arose for consideration. After considering the background in which the canteen came to be established and the manner of control exercised by the Tuticorin Port Trust, the prayer of the petitioner Union was accepted and the writ petition was allowed, holding that the employees who have been made permanent by the Management after 18.8.1995 should also be absorbed and be made permanent employees of the Port Trust.
30. It is also not in dispute that in so far as the Bombay Port Trust is concerned, the writ petition filed by the Workers' Union of the canteen attached to the Bombay Port Trust, in similar circumstances, had been allowed and the employees in the canteen of the Bombay Port Trust have been held to be regular staff of the Bombay Port Trust. The said contention of the learned senior counsel for the petitioner has not been contradicted by the respondents.
31. Therefore, considering the facts and circumstances set out in detail in paragraph 22 supra, I have no hesitation to come to the conclusion that the canteen workers of the Chennai Port Trust are entitled to be declared as regular employees of the Chennai Port Trust.
32. The writ petition is, therefore, ordered as prayed for and as follows:
(i) The regular and permanent employees of the canteen/the fourth respondent herein are declared to be and shall be treated as direct employees of the Chennai Port Trust.
(ii) Temporary employees under the fourth respondent shall be absorbed and made permanent with effect from the date on which they are entitled to be declared as permanent in accordance with the rules and regulations of the Port Trust.
The writ petition is ordered subject to the above observation. Index: Yes
1. The Secretary to Government
Ministry of Surface Transport
Union of India
1, Parliament Street
New Delhi-110 001.
2. Te Secretary to Government
Ministry of Labour
Union of India
Shram Shakthi Bhavan
3. The Chairman
Chennai Port Trust
5. The Registrar of Cooperative
170, E.V.R. High Road
Kilpauk, Chennai-600 010.
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