BALWANT RAI SALUJA & ANR ETC.ETC. vs. AIR INDIA LTD..

REPORTABLE

CIVIL APPEAL Nos.10264-10266 OF 2013 (@SPECIAL LEAVE PETITION (C) NOS. 24946-24948 OF 2011) BALWANT RAI SALUJA & ANR. ETC. ETC. … APPELLANTS VERSUS AIR INDIA LTD. & ORS. …RESPONDENTS J U D G M E N T CHANDRAMAULI KR. PRASAD, J. JUDGMENT Leave granted. Air India Limited was constituted under the Air Corporations Act, 1953. By virtue of Section 3 of the Air Corporations (Transfer of Undertakings and Repeal) Act, 1994, Air India has vested in Indian Airlines Limited. It has Ground Page 1 2 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Services Department at Indira Gandhi International Airport, Delhi. Respondent No. 2 is Hotel

authorized share capital of the Hotel Corporation of India, hereinafter referred to as the Corporation, is Rupees 10 crores, divided into 10 lakhs equity shares of Rs. 100/- each. The Corporation is a wholly owned subsidiary of Air India and its entire share capital is held by Air India and its nominee. Excepting 6 shares, 4,99,994 shares have been subscribed by Air India and rest by its nominees. Air India controls the JUDGMENT composition of the Board of Directors and appoints Directors in consultation with the Government of India. The power to remove the Directors from office before the expiry of the term is vested with Air India, in consultation with the Government of India, so also the power to fill up the vacancies caused by death, resignation, Page 2 3 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 retirement or otherwise. General management of the Corporation is vested in the hands of the

directions or instructions as it may think fit in regard to the finances and the conduct of the business and affairs of the Corporation. Duty has been cast upon the Corporation to comply with and give effect to such directions and instructions. The main objects for which the Corporation is incorporated are large and include carrying the business of hotels, motels, restaurants, cafés, kitchens, refreshment rooms, canteens and depots JUDGMENT etc. in general and its incidental and ancillary objects are establishment of catering and opening hotels, which would tend to promote or assist in Air India’s business as an international air carrier. Respondent No. 3, Chef Air Flight Catering, hereinafter referred to as ‘Chef Air’, is one of the units of the Corporation. Page 3 4 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Section 46 of the Factories Act, inter alia, confers power on the State Government to make

than 250 workers are ordinarily employed, to provide and maintain a canteen for the use of the workers. In exercise of the aforesaid power, Rules 65 to 71 have been incorporated in the Delhi Factory Rules, 1950, hereinafter referred to as ‘the Rules’. Rule 65(1) was to come into force in respect of any class or description of factories on such dates as the Chief Commissioner may by notification in the Official Gazette appoint. Rule 65(2) of the Rules, inter alia, contemplates JUDGMENT that the occupier of every factory notified by the Chief Commissioner, where more than 250 workers are ordinarily employed, shall provide in or near the factory an adequate canteen in accordance with the standard prescribed in those Rules. In pursuance of the provisions of sub-rule (1) of Page 4 5 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Rule 65 of the Rules, the Lieutenant-Governor of the Union Territory of Delhi, by notification in

apply to the factories specified in the said Rules with effect from the date of publication of the notification in the Official Gazette. It included M/s. Air India Ground Services Department, Indira Gandhi International Airport, Delhi (Engineering Unit). The workmen working in Air India Ground Services Department Canteen, hereinafter referred to as ‘the Canteen’, raised an industrial dispute JUDGMENT and the competent Government made a reference to the Central Government Industrial Tribunal as to whether the demand of the workmen employed by Chef Air to provide canteen service to be treated as deemed employees of the management of Air India is justified and, if so, what relief the workmen are Page 5 6 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 entitled to? The workmen laid their claim and, according to them, they were employed by Air India

of the Corporation. According to the workmen, the Corporation has entered into a contract with Air India to run and maintain the canteen and for that purpose, they were initially appointed for a period of 40 days and said period used to be extended from time to time and in this way each of them had completed service for 240 days in a year. According to the workmen, they were called for interview on several occasions but had not been JUDGMENT selected and on the contrary, persons junior to them have been regularized. The workmen have further alleged that Air India had entered into a contract with the Corporation to deny the workmen their legitimate right by circumventing the various provisions of the Contract Labour (Regulation and Abolition) Act, 1970. According Page 6 7 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 to them, they were performing duties of a permanent and perennial nature required by Air

that issuance of letters of appointment for 40 days with artificial break in service is an unfair labour practice and on the aforesaid grounds they sought regularization of the services with back wages in Air India. Air India resisted the claim of the workmen, inter alia, stating that they were not their employees and relationship of employer and JUDGMENT employee does not exist between them. According to them, Chef Air is a unit of the Corporation engaged in various businesses including establishing and running of canteens. According to Air India, the Canteen is being run and maintained by the Corporation on the basis of a fixed subsidy per employee provided by them. It Page 7 8 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 is a specific assertion of Air India that they have no control over the workmen and that their

admitted that the infrastructure of the Canteen was provided by them but its management is in the hands of the Corporation. Air India has further pointed out that letters of appointment, token numbers, ESI cards etc. have been issued to the workmen by the Corporation and, hence, the prayer for regularizing their services by Air India is misconceived. Air India has denied that the Canteen in question is a statutory canteen and was JUDGMENT employing more than 250 workers. On the basis of the materials placed on record, the Central Government Industrial Tribunal, hereinafter referred to as “the Tribunal”, came to the conclusion that the Corporation is 100% subsidiary of Air India and Page 8 9 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 the Canteen in question is a statutory Canteen established for the welfare of more than 2,000

premises of Air India and the Corporation carries on its business under the control and administration of Air India. According to the Tribunal, the running of the Canteen by the Corporation in respect of the statutory duty of Air India cannot be said to be its independent act. Accordingly, the Tribunal observed that hiring of employees for running the statutory canteen by the Corporation is a camouflage and the JUDGMENT workmen employed in the Canteen are deemed employees of Air India. Thus, the Tribunal held the demand of the workers to be justified and finding that the workmen have been terminated from their services during the pendency of the dispute held that the termination is illegal and, accordingly, set aside the termination of their Page 9 10 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 employment and directed reinstatement with 50% back wages.

Air India preferred writ petition before the High Court. The learned Single Judge held that Air India is the sole holder of the shares of the Corporation but it is a separate legal entity which is independent of its shareholders. The authority to issue directions does not merge the identity of the Corporation with the shareholder. The learned Single Judge accordingly held as JUDGMENT follows: “……Thus, in my view the mere fact of HCI being a 100% subsidiary of Air India and the aforesaid peculiar Articles of Association would not be decisive of whether the employees aforesaid of HCI and working in the canteen of Air India are to be treated as employees of Air India or not.” Page 10 11 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 As regards the grievance of the workmen that Air India had devised to employ the workmen

follows: “19. One thing which emerges is that in the present case, no motive to defeat any rights of the employees, in Air India entering into a contract with Chef Air (a unit of HCI) for operating its canteen, even if it be a statutory canteen have been established. It was not as if by employing workmen in HCI instead of in Air India, the workmen were being made employees of a weaker entity against whom they can claim no rights. After all HCI is also a Government of India company as Air India is.” JUDGMENT The learned Single Judge further came to the conclusion that the Corporation was not incorporated for the sole purpose of operating the Canteen for Air India but was set up as a legal entity to carry on business in diverse fields. According to the learned Single Judge, Air India Page 11 12 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 engaged the Corporation which has expertise in the field to run and operate the Canteen and that will

“23. HCI in the present case is seen as one such expert. It has been providing flight catering services to Air India and other airlines besides carrying on other allied businesses. As aforesaid, HCI was not incorporated merely to run the canteen of Air India so as to keep the employees of the said canteen, managed through the medium of HCI, at arm’s length from Air India. HCI is a business entity in its own right and no mala fides have been established in Air India entrusting the operation and management of the canteen aforesaid to HCI. As aforesaid, in spite of repeated asking, no prejudice is shown to have been caused to the workmen in them being the employees of the HCI instead of Air India. Of my own I can only gauge that may be as employees of Air India they may be entitled to a free flight once in a while and which they may not be entitled to as an employee of HCI. However, that is hardly determinative of the matter in controversy. Again it is not as if Air India is attaining to offload JUDGMENT Page 12 13 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 its canteen employees to an entity which is sick or near the stage of being closed down. HCI is informed .” to be a running concern

the Tribunal. The workmen, aggrieved by the same, preferred an appeal before the Division Bench of the High Court. The Division Bench framed the following question for its consideration: “11. The core issue that emanates for consideration is whether in the obtaining factual matrix it can be held that the employees of the canteen established by Air India in its premises and run by the HCI be treated as regular employees of Air India. Before we advert to the factual canvas, we think it appropriate to refer to the citations in the field, cull out the principles and analyse whether they are applicable to the material brought on record.” JUDGMENT The Division Bench of the High Court analysed the facts, referred to the various decisions of Page 13 14 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 this Court and ultimately came to the conclusion that the Corporation is a separate entity and not

that merely because the Articles of Association confer power on Air India to issue such directions or instructions as it may think fit in regard to conduct of the business and affairs of the Corporation and make it obligatory for the Corporation to carry on the direction of Air India, would not merge the identity of the shareholders with the Corporation. The Division Bench ultimately affirmed the decision of the JUDGMENT learned Single Judge and, while doing so, observed as follows: “20. On the basis of the aforesaid enunciation of law, the factual matrix is required to be tested. As is manifest, there is no material on record to show that the respondent - Air India had any role in the appointment of the employees in the canteen. No administrative or disciplinary action could be Page 14 15 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

Mr. Jayant Bhushan, Senior Advocate appearing on behalf of the appellants submits that the obligation to provide for the Canteen is with Air JUDGMENT India and, therefore, the workmen are entitled to be treated as their employees and Air India their employer. It is further contended that Air India has a large role to play in the operation and management of the Canteen and, in the circumstances, the veil of the contract has to be Page 15 16 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 lifted and this Court is competent to do so to arrive at the truth. In support of the submission

slightest hesitation in accepting this broad submission of Mr. Bhushan and, hence, I deem it unnecessary to refer to all those decisions. It is well settled that the court can lift the veil, look to the conspectus of factors governing employment, discern the naked truth though concealed intelligently. The court has to be astute in piercing the veil to avoid the mischief and achieve the purpose of law. It cannot be JUDGMENT swayed by legal appearance. The court’s duty is to find out whether contract between the principal employer and the contractor is sham, nominal or merely a camouflage to deny employment benefits to the workmen. Page 16 17 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Once the veil is pierced, the control of Air India is writ large over the Corporation, submits

controls the composition of the Board of Directors and appoints and removes Directors in consultation with the Government of India. According to him, the general management of the Corporation is vested in its Managing Director. Notwithstanding that, Air India is conferred with the power to issue directions or instructions as it may think fit in regard to the finances and the conduct of the business and affairs of the Corporation and, JUDGMENT hence, the workmen employed by the Corporation are, in fact, the employees of Air India. Mr. C.U. Singh, however, submits that notwithstanding the aforesaid power vested in Air India, the Corporation is still a separate legal entity. The fact that its entire share is held by Air India or Air India has the power to appoint the Board of Page 17 18 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Directors, issue directions etc., will not denude the legal status of the Corporation as a

by the Corporation through one of its units Chef Air will not make Air India its principal employer. He points out that in order to determine the principal employer one is required to see as to who is paying the salary, who is supervising the work, the role played in selection and appointment of the workmen, disciplinary control over them and whether such employees are covered under the welfare scheme of Air India etc. JUDGMENT He points out that the responsibility to run the Canteen is with the Corporation and, hence, Air India cannot be treated as its principal employer. According to him, the Corporation is a separate legal entity and even though Air India is a holding company, the Corporation shall still be a separate legal entity. Further, the Corporation Page 18 19 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 is not subservient to Air India but is a servant to its Memorandum of Association and Articles of

Court in the case of Heavy Engineering Mazdoor Union v. State of Bihar, (1969) 1 SCC 765 . Paragraph 5 of the judgment reads as under: It is true that besides the “5. Central Government having contributed the entire share capital, extensive powers are conferred on it, including the power to give directions as to how the company should function, the power to appoint directors and even the power to determine the wages and salaries payable by the company to its employees. But these powers are derived from the company's memorandum of association and the articles of association and not by reason of the company being the agent of the Central Government. The question whether a corporation is an agent of the State must depend on the facts of each case. Where a statute setting up a corporation so provides, such a corporation can easily be identified as the agent of the State as in Graham v. Public Works JUDGMENT Page 19 20 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT Page 20 21 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 (underlining mine)

case of Steel Authority of India Ltd. v. National Union Waterfront Workers, (2001) 7 SCC 1, in which it has been held as follows: …………The President of India “41. appoints Directors of the Company and the Central Government gives directions as regards the functioning of the Company. When disputes arose between the workmen and the management of the Company, the Government of Bihar referred the disputes to the Industrial Tribunal for adjudication. The union of the workmen raised an objection that the appropriate Government in that case was the Central Government, therefore, reference of the disputes to the Industrial Tribunal for adjudication by the State Government was incompetent. A two-Judge Bench of this Court elaborately dealt with the question of appropriate Government and concluded that the mere fact that the entire share capital was contributed by the Central Government and the fact that all its shares were held by the President of India and JUDGMENT Page 21 22 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

I have considered the rival submissions and find substance in the submission of Mr. Singh and the authorities relied on do support his contention. The Corporation undisputedly is a Government Corporation incorporated under the Companies Act. It is a legal entity altogether different from its shareholders. In my opinion, JUDGMENT the fact that Air India or its nominee are the shareholders of the Corporation and in the management of business and finances, it is subject to the directions issued by Air India in terms of the Memorandum of Association and Articles of Association shall not merge the Corporation’s identity in shareholders. In my opinion, the Page 22 23 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Corporation is a separate legal entity, not subservient to Air India but a servant to its

Association. Mr. Bhushan, then submits that the Corporation may be a separate legal entity but Air India’s control over the affairs of the Canteen makes it the principal employer. He points out that many of the articles for running the Canteen were purchased by Air India and, in fact, grievances pertaining to running of the Canteen were entertained by it. These, according to the learned counsel, clearly show that Air India is JUDGMENT the principal employer. I have bestowed my consideration to the aforesaid submission, but find no substance in the same. Few of the well recognized tests to find out the real relationship are whether the principal employer: Page 23 24 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 (1) pays the salary to the workmen instead of the contractor,

employees, (3) has role in selection and appointment of the employees, and (4) acts as a disciplinary authority over the conduct and discipline of the employees. Reference in this connection can be made to a decision of this Court in the case of Haldia Refinery Canteen Employees Union and Others v. Indian Oil Corporation Ltd. & Ors. (2005) 5 SCC JUDGMENT , wherein it has been held as follows: 51 “16….. It has nothing to do with either the appointment or taking disciplinary action or dismissal or removal from service of the workmen working in the canteen. Only because the management exercises such control does not mean that the employees working in the canteen are the employees of the management. Such supervisory Page 24 25 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 control is being exercised by the management to ensure that the workers employed are well qualified and capable of rendering proper service to the employees of the management.” (underlining mine) In the case of International Airport Authority of India v. International Air Cargo this Court Workers' Union, (2009) 13 SCC 374, echoed the same view and observed as follows: “38. The tests that are applied to find out whether a person is an employee or an independent contractor may not automatically apply in finding out whether the contract labour agreement is a sham, nominal and is a mere camouflage. For example, if the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, and the ultimate JUDGMENT Page 25 26 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 supervision and control lies with the contractor.

JUDGMENT This Court has taken the same view in General Manager, (OSD), Bengal Nagpur Cotton Mills, , in Rajnandgaon v. Bharat Lal, (2011) 1 SCC 635 which it has been held as follows: It is now well settled that if “10. the industrial adjudicator finds Page 26 27 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT Bearing in mind the principles aforesaid, when I proceed to consider the facts of the present case, I find that Air India does not fulfill the test laid down so as to treat it as the principal employer. It is not the case of the workmen that it is Air India which pays their emoluments instead of the Corporation. Air India has neither Page 27 28 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 any role in selection and appointment of the workmen nor it controls and supervises their work.

and discipline. In my opinion, Air India, by giving subsidy at a specified rate or for that matter purchasing few articles for the Canteen on its behalf and further bringing to the notice of the Corporation the complaint in regard to the functioning of the Canteen, will not make it the principal employer. As has rightly been observed by the High Court, the Corporation is a Government company like Air India and the workmen in no way JUDGMENT will be prejudiced if they continue to be the employees of the Corporation. In my opinion, there does not seem to be any mala fide or oblique motive in Air India entering into a contract with Chef Air, a unit of the Corporation for operating its Canteen. Certainly, it is not to defeat the rights of the workmen. Page 28 29 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Mr. Bhushan, lastly submits that the workmen were engaged in the Canteen provided by Air India

exercise of powers under Section 46 of the Factories Act. According to him, the workmen of a statutory canteen have to be treated as employees of such establishment whose obligation is to provide for the Canteen. In the case in hand, according to Mr. Bhushan, the obligation to provide for the Canteen is with Air India and, therefore, the workmen are entitled to be treated as their employees and Air India their employer. In support of the submission reliance has been JUDGMENT placed on a decision of this Court in the case of M.M.R. Khan v. Union of India, 1990 Supp SCC 191 , and my attention has been drawn to Paragraph 39 of the judgment which reads as follows: The result, therefore, is that “39. the workers engaged in the statutory canteens as well as those Page 29 30 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

Reliance has also been placed on a Constitution Bench decision of this Court in the JUDGMENT case of Steel Authority of India Ltd. (supra) referred to by the learned counsel for Air India also and my attention has been drawn to paragraph 107 thereof, which records as follows: An analysis of the cases, “107. discussed above, shows that they fall in three classes: ( i ) where contract labour is engaged in or in connection with the work of an Page 30 31 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT According to Mr. Bhushan, the Constitution Bench judgment clinches the issue. I do not find Page 31 32 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 any substance in the submission of Mr. Bhushan and the authorities relied on are clearly

determine the status of workmen employed in the Canteen. Reference in this connection can be made to a decision of this Court in Workmen of the Canteen of Coates of India Ltd. v. Coates of India Ltd. & Ors. (2004) 3 SCC 547 wherein it has been held as follows: “4……….. It is sufficient for us to state that some requirement under the Factories Act of providing a canteen in the industrial establishment, is by itself not decisive of the question or sufficient to determine the status of the persons employed in the canteen.” JUDGMENT (underlining mine) The aforesaid submission has squarely been dealt with by this Court in the case of Hari Page 32 33 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Shankar Sharma v. Artificial Limbs Manufacturing Corpn., (2002) 1 SCC 337, and this Court in no

“whenever in discharge of statutory mandate a canteen is set up or other facilities provided by the establishment, the employee of the canteen or such other facility become the employee of that establishment”. Relevant portion of the judgment reads as follows: The submission of the “5. appellants that because the canteen had been set up pursuant to a statutory obligation under Section 46 of the Factories Act therefore the employees in the canteen were the employees of Respondent 1, is unacceptable. First, Respondent 1 has disputed that Section 46 of the Factories Act at all applies to it. Indeed, the High Court has noted that this was never the case of the appellants either before the Labour Court or the High Court. Second, assuming that Section 46 of the Factories Act was applicable to Respondent 1, it cannot be said as an absolute proposition of law that JUDGMENT Page 33 34 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT Page 34 35 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Now referring to the authority of this Court in the case of M.M.R. Khan (supra), the same is

canteens as well as those engaged in non-statutory recognized canteens are railway employees and they have to be treated as such. This Court came to the aforesaid conclusion as, on fact, it was found that though the workmen were employed in the canteen through the device of a labour contract, they were essentially working under the control and supervision of the railway establishment. Further, the provision for running and operating JUDGMENT the canteen was in the Establishment Manual of the Railways. Under these circumstances, this Court came to the conclusion that the workmen engaged in the statutory canteens were, in fact, the railway employees. No such facts exist in the present case. Page 35 36 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 In the Steel Authority of India Ltd.(supra), the Constitution Bench observed that the

has not endorsed the said view. In fact, the decisions which I have referred to in the earlier paragraphs of this judgment negate this contention. I have tested the case of the workmen on the touchstone of the principles laid down by this Court and find that they do not satisfy those tests so as to hold that Air India is the principal employer. Having found no substance in any of the JUDGMENT submissions made on behalf of the appellants, I do not find any merit in these appeals and they are dismissed accordingly, but without any order as to costs. ……………..………..………………………..J. (CHANDRAMAULI KR. PRASAD) Page 36 37 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 NEW DELHI, NOVEMBER 13, 2013 JUDGMENT Page 37 38 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.10264-10266 OF 2013 (Arising out of SLP (C) Nos. 24946-24948 of 2011) BALWANT RAI SALUJA & ANR.ETC. ETC. … APPELLANTS VS. AIR INDIA LTD. & ORS. … RESPONDENTS J U D G M E N T JUDGMENT V. GOPALA GOWDA, J. Leave granted. 2. I have gone through the judgment of my learned brother Judge in these civil appeals, in which my learned brother Judge has concurred with the impugned Page 38 39 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 judgment. However, I am in respectful disagreement with the opinion of my learned brother and I am

These appeals have been filed by the appellants nd challenging the judgment and order dated 2 May, 2011 passed in L.P.A. Nos.388 of 2010, 390 of 2010 and 391 th of 2010 confirming the judgment and order dated 8 April, 2010 of the learned single Judge of the Delhi High Court passed in WP Nos.14178 of 2004, 14181/2004 and 14182 of 2004, wherein the learned single Judge th has set aside the common award dated 5 May, 2004 of the Central Government Industrial Tribunal (for short JUDGMENT ‘CGIT’) passed in Industrial Disputes case Nos. 97, 98 and 99 of 1996. The CGIT recorded that the concerned workmen of Chefair, a unit of Hotel Corporation of India (for short HCI) with which Air India had entered into a contract to provide canteen services at its establishment, are entitled to be treated as being employees of it and consequently Page 39 40 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 held that they are entitled to the relief sought for by them. The said judgment of CGIT was set aside by

nd judgment dated 2 May, 2011 after adverting to certain relevant facts, legal contentions and cases 1 like M.M.R. Khan & Ors. v. Union of India & Ors. , and some other decisions of this Court and concurred with the finding of facts and reasons recorded by the learned single Judge in setting aside the award and consequently dismissed the appeals of the concerned workmen. That is how these Civil Appeals are filed by the workmen urging various factual and legal JUDGMENT contentions in support of their claims with a request to set aside the impugned judgments and orders of the Division Bench and the learned single Judge of the Delhi High Court in the aforesaid Letter Patent Appeals and the writ petitions. 1 1990 (Supp) SCC 191 Page 40 41 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 3. Since my learned brother Judge has referred to certain facts and legal contentions to decide the

rival legal contentions urged on behalf of the parties with a view to answer the contentious points that would arise in these appeals to answer the same. 4. Three industrial disputes case Nos. 97, 98 and 99 of 1996 were registered by CGIT pursuant to the order of references made by the Central Government in the Ministry of Labour vide its order No.L- JUDGMENT 11012/23/96-IR (Coal-I) dated 23.10.96 for adjudication on the points of dispute referred to it in relation to the workmen mentioned in the respective orders of references made by it and in relation to other industrial disputes namely ID Case Nos. 107/96 and 108/96 which are individual cases of industrial disputes filed by the concerned workmen Page 41 42 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 since their services were illegally terminated by the employer Air India during pendency of the

workmen by the Management of Air India before the CGIT without obtaining the approval from the CGIT, despite the order dated 04.12.1996 passed by CGIT wherein an undertaking was given by the Management of Air India that neither it will change the contractor Chefair without permission of/intimation to the Tribunal nor will it take any action against the workmen listed in the reference order made to the CGIT for an adjudication of their dispute. JUDGMENT Despite the same, the services of the concerned workmen in the Industrial disputes in case ID Nos.97, 98 and 99/1996 were terminated. The action of the Management of Air India in terminating the services of the concerned workmen in the complaint ID Nos. 107 and 108/1996 is in contravention of Page 42 43 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Section 33(2)(b) of the Industrial Disputes Act, 1947 (in short ‘I.D. Act’). Therefore, the

existing industrial dispute between the concerned workmen and the Management of Air India regarding their illegal order of termination during the pendency of the industrial disputes referred by the Central Government which are registered as reference Nos.97, 98 and 99 of 1996 with regard to the absorption of the services of the contract labour employees, employed by the HCI on behalf of M/s Air India and made them to work in the Chefair. The JUDGMENT aforesaid canteen is the statutory canteen in terms of the definition of Section 46 of the Factories Act, according to the appellants herein and they requested the CGIT for answering the points of dispute which was referred to in the order of references made by the Central Government in ID Page 43 44 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Nos.97 to 99, to treat them as the deemed employees of the Management of Air India and also to set aside

order of reinstatement with all consequential benefits including the award of back-wages. 5. In support of their respective claims and counter claims on behalf of the workmen and the Management of Air India, they filed their statements respectively in the cases referred to supra before the CGIT. In the claim petition, the workmen contended that the canteen which is being run by the JUDGMENT Air India through HCI through Chefair has engaged the concerned workmen in these cases as contract employees in various capacities and they have been working in the canteen run by the Management of Air India through Chefair ranging from 3 to 20 years on the date of references made by the Central Government to the CGIT which in turn is run by its Page 44 45 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 subsidiary Company HCI. Delhi State Government in exercise of its power under Section 46 of the

to as ‘the Rules’). A Notification was issued by the Lt. Governor of the Union Territory of Delhi under Rule 65(2) of the Rules stating that the Rules of the Factories Act shall apply to the factories specified in the Schedule to the said notification. In the Schedule to the notification, the description of the factory at serial No. 9- M/s. Air India Ground Services Deptt. IGI, Air Port Delhi (Engineering Unit) F.D.1725 is one of the specified JUDGMENT factories, the same is marked as – Ex.P. 4 in the Industrial dispute cases before the CGIT. 6. Rule 65 states for providing canteen, Rule 66 speaks of Dining Hall, Rule 67 provides Equipment, Rule 68 for fixing the prices to be charged, Rule 69 deals with Accounts and Rule 70 deals with Managing Page 45 46 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Committee to manage the affairs of the statutory canteen. The relevant Rules will be adverted to in

shortly. 7. Strong reliance was placed upon the Rules and the Notification referred to supra by the learned senior counsel Mr. Jayant Bhushan inter alia contending that the canteen is being run by the Air India through HCI by Chefair where the concerned workmen have been working in different capacities for number of years such as cook, ground cleaning JUDGMENT staff, servicing, washing staff etc. etc. The HCI employed them on contract basis as canteen workers though they have been discharging their duties which are in perennial nature. Then action of the Management of Air India in employing the concerned workmen on contract basis is an unfair Page 46 47 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 labour practice as defined under Section 2(ra) of th the I.D. Act enumerated in the V Schedule to the

th serial No. 10 to the V Schedule which states that “to employ workmen as casual or temporary workers and to continue them as such for years with the object to deprive them of the status and privileges of permanent workmen is an unfair labour practice on the part of the employer”. It is further stated that Management of Air India has employed more than 2000 employees in its factory and therefore notification issued by the Lt. Governor of Delhi on JUDGMENT st 21 January, 1991 applying Rules 65 to 70 of Rules 1950 to the said establishment framed under Section 46 of the Factories Act will be applicable to the canteen in question run by the HCI on behalf of Air India. It is the case pleaded and proved before the CGIT by the concerned workmen and it has recorded Page 47 48 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 the finding in this regard in their favour by placing reliance upon three judge bench decision of

2 Corporation of India and Ors. , and another decision of this Court in Basti Sugar Mills Ltd. v. Ram 3 Ujagar & Ors. in support of the legal contention urged on behalf of the workmen that employees of statutory canteens i.e. canteens which are required to be compulsorily provided to its workmen in the factory as per Section 46 of the Factories Act are employees of the establishment not only for the purpose of Factories Act but also for all other JUDGMENT purposes. In the case of Parimal Chandra Raha referred to supra, this Court has held that for canteen workers of contractor who runs the canteen, it must pass the relevant test to determine on the facts as to whether providing canteen to its workmen 2 1995 suppl. (2) SCC 611 3 AIR 1964 SC 355 Page 48 49 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 by a factory was obligatory on its part. In Basti Sugar Mills Ltd.'s case, this Court has held that

employed by the contractor to do that work, the contractor terminated their services on completion of the work. The stand taken in the said case by the establishment was that they had nothing to do with the workmen. The workmen in the case approached this Court for relief against the termination of their services. This Court held that the workmen were employed in the industry to do manual work for reward and therefore it is held that the Company was JUDGMENT their employer, as the workmen were employed by the contractor with whom the Company had contracted in the course of conducting its business for execution of the said work of removal of the press mud which is ordinarily part of the industry. Further reliance was placed by the learned counsel upon the decision Page 49 50 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 of this Court in Union of India & Ors. v. M. Aslam & 4 Ors. wherein this Court has held that for the unit

benefits as government servants. Finding of fact was recorded by the CGIT in favour of the concerned workmen while answering the points of dispute referred to it by the Central Government with reference to the factual legal aspects and evidence on record from the aforesaid cases. This finding is found fault with by the Single Judge and Division Bench of the Delhi High Court and they had set aside the finding recorded by CGIT. Strong reliance was JUDGMENT placed by the Delhi High Court upon the plea taken by Air India and HCI with regard to the fact that though HCI is subsidiary Company of the Air India, it is governed by its own Memorandum and Articles of Association as existed in the Companies Act and is governed by the provisions of the said Act. HCI is 4 (2001) 1 SCC 720 Page 50 51 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 an independent legal entity from that of the Air India. The learned single Judge while accepting the

and stated with reference to the Memorandum and Articles of Association, and observed that the general management of business of HCI vests with its Board of Directors, no doubt, the same is subject to the directions, if any, that will be issued from time to time from Air India with regard to the finance and conduct of its business affairs. However, the composition of the Board of Directors of HCI is constituted by Air India in consultation JUDGMENT with the Government of India. In view of the said reason, it cannot be said that the concerned contract employees employed by HCI to do work in the canteen are employees of Air India in the face of the first principle of Corporate law with reference 5 to Salomon v. Salomon & Co. Ltd. , wherein it was 5 1897 AC 22 Page 51 52 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 held that Company is a person all together different from its shareholders though Air India is the sole

reference to Section 46 in Chapter V of the Factories Act under the heading “welfare”. The mandatory provision is provided to maintain a canteen in the establishment, which is a measure for the welfare of the workers, the statutory obligation on the part of the industrial establishment to provide and maintain a canteen in the factory. If it is found that the operation of such canteen has been entrusted to such an expert, it cannot be said that JUDGMENT the employees deployed by such expert in such canteen becomes employees of the factory/establishment. Further, it is held by him that HCI was not incorporated merely to run the canteen of Air India so as to keep the employees of the canteen maintained by it at arm's length from Page 52 53 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Air India. The HCI is a business entity on its own rights and no malafide have been established by the

canteen to the HCI and no prejudice is shown to have been caused to the concerned workmen being the employees of the HCI instead of Air India, except that they may be entitled to a free flight once in a while from it, which they may not be entitled to get as workmen of the HCI. Therefore, he has held that it is hardly determinative of the matter in controversy and thereafter he has referred to the judgments of this Court in Indian Petrochemicals JUDGMENT 6 Corporation Ltd. & Anr. v. Shramik Sena & Ors. , Steel Authority of India Ltd. & Ors. v. National 7 Union Waterfront Workers & Ors. , International Airport Authority of India v. International Air 8 Cargo Workers' Union & Anr. , in support of his 6 ( 1999) 6 SCC 439, 7 ( 2001)7 SCC 1 8 ( 2009)13 SCC 374 Page 53 54 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 conclusion laid down by applying the test laid down in those cases to the fact situation and held that

within the meaning of Section 2(k) of the I.D. Act between the concerned workmen and the Management of Air India. Therefore, he has quashed the award of the CGIT which was affirmed by the Division Bench of the Delhi High Court in the aforesaid L.P.As by accepting the reasons recorded by the learned single Judge and also after extracting certain relevant paragraphs from the decisions of this Court in the cases of M.M.R. Khan, Parimal Chandra Raha, Indian JUDGMENT Petrochemicals Corporation Ltd., (all referred to supra) Hari Shanker Sharma and Ors. v. Artificial 9 Limbs Manufacturing Corporation and Ors . The Division Bench of Delhi High court has concurred with the finding and reasons recorded by the learned single Judge in the impugned judgment and dismissed 9 (2002) 1 SCC 337 Page 54 55 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 the letter patent appeals of the concerned workmen. The correctness of the said judgment and order are

contentions as has been adverted to before the CGIT and the High Court in the writ petition and the appeals. Therefore, the same need not be adverted to once again in this judgment with a view to avoid repetition. 8. It is contended by the learned senior counsel Mr. Jayant Bhushan on behalf of the concerned workmen, placing strong reliance upon Section 46 of JUDGMENT the Factories Act and notification of the year 1991 referred to supra issued by Lt. Governor of the Union Territory of Delhi upon the Rules 65 to 70 of the Rules that the Management of Air India is enumerated at serial No.9 in the Schedule to the said notification. Therefore, the Management of Air India was required to provide a statutory canteen to Page 55 56 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 its workmen in its industrial establishment and the learned senior counsel also placed strong reliance

substantiate his contentions that the control and directions that will be issued from time to time with regard to running of the canteen and managing the canteen is on the Management of Air India to HCI wherein, the Management of Air India was the occupier. The learned senior counsel has further placed strong reliance upon the findings recorded by the CGIT in its award in answer to the points of disputes referred to it holding that the concerned JUDGMENT workmen were employed by HCI to work in the statutory canteen of the Management of Air India and placed strong reliance upon the judgment of this Court in State of U.P. & Ors. v. Renusagar Power Co. 10 & Ors. , which is followed by two other judgments of this Court in Delhi Development Authority v. Skipper 10 , (1988) 4 SCC 59 Page 56 57 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 11 Construction Co. (P.) Ltd. & Anr. , Kapila Hingorani 12 v. State of Bihar , wherein this court has laid down

as to whether the contract employment of the concerned workmen by the HCI on behalf of the Management of Air India is a sham or a camouflage. The CGIT has pierced the veil with reference to the existing factual situation and found that the concerned workmen had been working in the statutory canteen required to be established and managed by the Management of the Air India as per Rule 65(2) of the Rules and the HCI is a subsidiary Company of the JUDGMENT Air India as it holds 100% share holding and therefore, the Air India has got the control and supervision of its business under clause 33 of the Memorandum and Articles of Association. Therefore he has requested this Court to set aside the findings 11 ( 1996) 4 SCC 622 12 ( 2003) 6 SCC 1 Page 57 58 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 of fact recorded by the learned single judge, which are concurred with by the Division Bench in the

consideration of the proved facts and legal evidence on record but also suffers from error of law as has been laid down by this Court in catena of cases referred to supra upon which the learned senior counsel has placed strong reliance in support of the case of the concerned workmen in these appeals. 9. Further he has placed strong reliance upon the judgment of this Court in M.M.R. Khan’s case JUDGMENT particularly paragraphs 25, 27 and 30 in support of the proposition of law wherein this Court has held that rules framed by the State Government of Delhi under Section 46 of the Factories Act are obligatory on the part of the Railway Administration to provide and maintain statutory canteen. In pursuant to the above rules and notifications, this Court has held Page 58 59 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 that canteens were incidental and connected with the manufacturing process and is subject to the

concomitant of the manufacturing activity and further railway establishment has recognized the obligation of the Railway Administration by the Act which makes provision for meeting the cost of the canteen though Railway Administration to employ any staff committee or cooperative society for the management of the canteen. The legal responsibility for the proper management of such canteen rests not with such agency but solely with the Railway JUDGMENT Administration. With reference to paragraph 27 of the said decision and also having regard to the undisputed fact of the case in hand that the Chefair unit of the HCI in which canteen is being run is situated in the premises of the Air India and that it is also the statutory duty of the Air India under Page 59 60 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Rules 65(2) and 65(4) of the Delhi Factories Rules, that the canteen building should be situated not

source of dust, smoke or obnoxious fumes etc. and that the manager of the factory shall submit for the approval of Chief Inspector of plans and site plan as provided under sub-rule (3) of Rule 65 and further that the construction of the canteen building is in accordance with Rules 65, 66, 67 and 70 which would clearly go to show that the said canteen is established by Air India to discharge its welfare statutory obligation to its JUDGMENT workmen/employees as provided under the Factories Act and Rules framed under by the State government of Delhi. Also, the managing committee constituted under the Rules should consult from time to time regarding the quality and quantity of food stuff to be prepared and served in the canteen to its Page 60 61 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 workmen/employees and for other purposes. Therefore, he has contended that the legal principles laid down

it is contended by the learned senior counsel that the findings and reasons recorded by the learned single Judge and the Division Bench in the impugned judgments after setting aside the finding of facts recorded in the award on this aspect of the matter by CGIT in answer to the points referred to it is not only erroneous but also suffers from error in law and is liable to be set aside and the common award passed by CGIT should be restored. JUDGMENT 10. Another ground urged by the learned senior counsel is that the High Court failed to appreciate the fact that the canteen has been in existence since 1945. It is a deemed statutory canteen under Section 46 of the Factories Act vide notification of 1991 referred to supra. Therefore, the CGIT has come Page 61 62 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 to the right conclusion and held that the canteen is incidental to and running the canteen and the work

the Division Bench of the Delhi High Court has erroneously applied the judgments in Indian Petrochemicals Corporation Ltd. , Parimal Chandra Raha and referred to para 22 of M.M.R. Khan’s case , Workmen of Nilgiri Coop. Mkt. Society Ltd. v. State 13 of Tamil Nadu & Ors. , Haldia Refinery Canteen Employees Union & Ors. v. Indian Oil Corporation & 14 Ors. , and Hari Shanker Sharma (supra) to set aside the findings of the CGIT and concurred with the JUDGMENT finding of learned single Judge. Therefore, the learned senior counsel has urged this Court for quashing of the impugned judgments of both the learned single judge and the Division Bench since the same are not only based on erroneous reasoning 13 (2004) 3 SCC 514 14 ( 2005) 5 SCC 51 Page 62 63 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 but also suffer from error in law in view of the clear pronouncement of law laid down by this Court

providing and maintaining statutory canteen to its workmen/employees in support of his contentions that the employment of contract employees by Air India through HCI to run the statutory canteen in its premises is a sham and camouflage to deprive the legitimate statutory and fundamental rights of the concerned workmen. Therefore, he submits that the CGIT was justified in lifting the veil or piercing the veil from the nature of employment to provide JUDGMENT and maintain the statutory canteen by Air India through HCI and the finding by CGIT is supported by plethora of judgments of this Court referred to supra. It is further submitted by him that there is direct control and supervision on the functioning of the canteen and its employees by Air India being a Page 63 64 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 statutory canteen which is required to be maintained by it in conformity with Rules 65 to 70 of the Delhi

issued enlisting the Management of Air India in the Schedule to the said notification for providing and maintaining the statutory canteen which notification has not been questioned by Air India. Therefore, the decisions of the Supreme Court referred to supra regarding piercing the veil for the purpose of finding out the real facts and to give effect to the object and intendment of the statute while recruiting the workmen on contract basis which is in JUDGMENT violation of the statutory provisions of the Industrial Disputes Act has been rightly arrived at by the CGIT on proper appreciation of pleadings and evidence on record to answer the points in the affirmative. Therefore, the learned senior counsel has requested this Court to interfere with the Page 64 65 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 impugned judgments and for restoration of the award passed by the CGIT.

respondent sought to justify the impugned judgment of the Division Bench of the Delhi High Court in affirming the judgment of the learned single Judge by placing strong reliance upon the decisions of this Court in Dena Nath & Ors. v. National 15 Fertilisers & Ors. , and Steel Authority of India (supra). It is contended by the learned senior counsel for the respondent that the Division Bench after adverting to the rival legal contentions has JUDGMENT elaborately referred to the decision of M.M.R. Khan’s case and the various other decisions referred to in the impugned judgment rightly concurred with the findings and reasons recorded by the learned single judge in reversing the findings and reasons recorded in the Award by the CGIT on the points of 15 ( 1992) 1 SCC 695 Page 65 66 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 dispute referred to it by the Central Government for its adjudication. On appreciation of facts pleaded

canteen by the HCI which is the statutory Corporation, therefore, the Management of Air India has no power of recruitment, disciplinary control on the employees and no control and supervision on functioning of the workmen of the canteen. Therefore, the High Court has rightly arrived at the conclusion and held that there is no relationship of master and servant or employer and employee between the concerned workmen of the canteen and the Air JUDGMENT India. The HCI is an independent legal entity which has been carrying on with its business strictly in conformity with the Memorandum and Articles of Association and therefore he contends that there is no need for this Court to interfere with the impugned judgments. Further, he has urged that the Page 66 67 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 canteen in which the concerned workmen were employed by HCI is not a statutory canteen and the finding

that Air India has employed more than 2000 employees and that the said canteen is the statutory canteen and that there is an obligation on the part of the Management of Air India to cater the food stuff to its workers and employees, is an erroneous finding and also suffers from error in law. Therefore, the said finding has been rightly set aside by the learned single Judge, the same is affirmed by the Division Bench of the Delhi High Court by concurring JUDGMENT with decision of the learned single judge. Hence, he further contends that there is no questions of law much less the questions of law framed by the workmen in the appeals involved which require to be considered and answered by this Court in exercise of Page 67 68 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 its jurisdiction. Hence he has prayed for dismissal of these appeals.

contentions, the following questions of law would arise for consideration: (1) Whether the canteen which is run through HCI from its Chefair unit by the Management of Air India, is the statutory canteen of it under Rules 65 to 70 of the Delhi Factories Rules of 1950? (2) Whether engaging the contract workmen in the canteen situated in the premises of Air JUDGMENT India through HCI amounts to sham and camouflage by Air India to deprive the legitimate statutory and fundamental rights of the concerned workmen as provided under the provisions of the Industrial Disputes Act and the Constitution and can this Court pierce the veil to find out and ascertain Page 68 69 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 the real and correct facts as to whether they are the workmen of Air India?

th common award dated 5 May, 2004 in ID Nos. 97, 98, 99, 107 and 108 of 1996 are legal and valid? (4) Whether the findings recorded by the learned single Judge in CWP No.14178, 14181 and 14182 of 2004 which are concurred with by the Division Bench in LPA Nos.388, 390 and 391 of 2010 suffer from erroneous reasoning and error in law and warrant interference by JUDGMENT this Court? (5) What award the concerned workmen are entitled to? Answer to Point Nos. 1 and 2: Page 69 70 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 13. First two points are answered together by assigning the following reasons since they are

of fact which are on record and are not in dispute with a view to determine the nature of dispute between the parties that is referred to by the CGIT for adjudication in exercise of its power and examine the rights and obligations of the parties to find out as to what relief the concerned workmen in the appeals are entitled to, keeping in view the provisions of Factories Act read with the Delhi Factories Rules of 1950, The Contract Labour JUDGMENT (Regulations and Abolition) Act, 1970 and the Industrial Disputes Act, 1947. 14. It is an undisputed fact that the Labour st Department vide its notification dated 21 January, 1991 issued in pursuance of the provisions of sub- rule (1) of Rule 65 of the Delhi Factories Rules Page 70 71 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 wherein Lt. Governor of Union Territory of Delhi directed that Rules 65 to 70 of the Rules which

– M/s. Air India Ground Services Deptt. IGI, Air Port Delhi (Engineering Unit) F.D.1725 is enlisted. In view of the aforesaid notification, the Air India is statutorily required to maintain and provide a canteen in its factory premises to cater the food stuff to its employees/ workmen. It is the case of the concerned workmen that there are 2000 workmen working in the establishment of Air India which plea is accepted by the CGIT and the finding of fact is JUDGMENT recorded on the basis of evidence on record by it, particularly, the admission made by the witness examined on behalf of Air India before CGIT. 15. Rules 65 to 70 of the Rules framed by the Union Territory of Delhi under Section 46 of the Factories Act are applicable in respect of Air India as it is Page 71 72 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 enlisted in the Schedule to the Notification issued by the Labour Department referred to supra, to

concerned workmen in the industrial disputes raised by them is that Air India has employed more than 2000 workmen and on the basis of the pleadings and evidence on record has proved the points of dispute referred to it in the Industrial disputes referred to supra. The Air India has now challenged the applicability of the Notification and the Rules framed by the Delhi Union Territory under Section 46 of the Factories Act. The case pleaded by the JUDGMENT workmen on the other hand is that they are working in Chefair which belongs to the HCI which is wholly owned subsidiary Company of Air India with expertise in food preparation and catering to the employees/workmen and traveling passengers in their domestic and international Air Crafts, and it is Page 72 73 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 bound by its Memorandum and Articles of Association, which is comprehensive enough to regulate the

service conditions prevailing in the HCI vis-a-vis its employees are comparable to the relation between the workers and Air India and Chefair in terms of monetary benefits and the same are largely similar. The cost of providing the canteen services to its employees/workmen was provided by Air India on the basis of ‘per employee subsidy’. The CGIT, with reference to Factories Rules and Notification referred to supra has held that Air India has to JUDGMENT provide food stuff to its employees/workmen at the subsidiary rate. The pleadings of Air India in its counter statement filed before the CGIT are cleverly designed and drafted stating that there were not more than 250 employees/workmen of Air India in order to apply the relevant provisions of the Page 73 74 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Factories Act and Rules in relation to a statutory canteen run by HCI through Chefair and therefore the

fact was demolished by the concerned workmen of the canteen by cross examining the witness of Air India, who is its designated officer. He has stated in his evidence unequivocally that the actual number of workmen/employees availing the canteen facilities in the factory premises were in the range of 2000 persons - a figure which was at least not less than eight times the number contained in the original pleadings of Air India. Air India, in spite of JUDGMENT being the statutory corporation did not consider it necessary to come to the court with clean hands but on the other hand, it has suppressed relevant material fact regarding the number of employees/workmen working in its establishment. Therefore, the CGIT, on the basis of admission made Page 74 75 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 by the witness examined on behalf of the Air India as MW1, has recorded the finding of fact holding

the canteen facilities, which is run through the HCI from its Chefair unit in the premise of Air India. The wholly owned subsidiary corporation- HCI has adopted unfair labour practice as defined under Section 2(ra) of the I.D. Act at serial No. 10 entry th in the V Schedule under the heading of the Unfair Labour Practices practiced by the employer, by keeping workers in employment in the canteen for 40 days at a time and thereafter employing them on JUDGMENT contract basis after a break though the nature of work to be performed by them in the canteen have been perennial in nature, for the reason that they were required to provide and maintain the statutory canteen in the factory premises to cater the food stuff to its employees/ workmen. Therefore, they Page 75 76 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 have committed a statutory offence punishable under the provision of Section 25U of the I.D. Act for

unfair labour practice and is prohibited under Section 25T of the I.D. Act either by the employer or the workmen under the above Schedule to the I.D. Act. The concerned workmen got the Industrial Disputes referred to the CGIT for adjudication on the points of the dispute referred to it by the Central Government in the orders of reference who are covered in the award passed by the CGIT. They have been discharging the permanent nature of work JUDGMENT in different capacities working continuously ranging from 3 years to 20 years with an artificial break after 40 days of employment by the employer with an oblique motive to deprive them of their legitimate statutory right of regularizing them as permanent workmen in the statutory canteen which is being run Page 76 77 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 by the Air India in its factory premises through HCI from its Chefair unit.

on behalf of the appellants- concerned workmen with reference to the pleadings of the parties and the evidence on record, has rightly placed strong reliance upon the Notification of 1991 issued by the Labour Department enlisting Air India in the Schedule to the Notification at serial No.9 to provide a statutory canteen to the employees/ workmen of Air India which is being run through HCI from its Chefair unit on its behalf which is its JUDGMENT subsidiary company as it has got 100% share holding as per Memorandum and Articles of Association. On the basis of pleadings and evidence on record, the learned senior counsel substantiated the finding of fact recorded by the CGIT, wherein it has held that the concerned workmen are employed by Air India through its subsidiary Corporation- HCI, which is a Page 77 78 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 sham contract and this veil is required to be pierced to find out the real facts involved in the

JUDGMENT 16 (1978) 4 SCC 257 Page 78 79 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 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 indus- try, the local conditions and the like may be resorted to when labour legislation casts welfare obligations on the real em- ployer, 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.” (Emphasis laid by this Court) 17. He has further very rightly placed reliance upon the three Judge Bench decision of this Court in the case of Kanpur Suraksha Karamchari Union v. Union of 17 India & Ors. wherein this Court has held with reference to interpreting Section 2(n) and Section JUDGMENT 46 of the Factories Act read with Rules of UP Factories Rules 1950 -Rule 1968, Section 7 and after adverting to the Government of India Notification th order No. 18/(1)80/D(JCM) dated 25 July, 1981 accorded sanction to treat all employees of the canteen established in defence industrial 17 (1988) 4 SCC 478 Page 79 80 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 establishments under Section 46 of the Act as the government employees with immediate effect and

contractors or co-operative societies or some other bodies. 18. The legal question that arose for consideration of this Court in that case was whether the services of the workers, before they were declared to be government employees should be taken into consideration for purposes of calculating their pension dues on retirement. E.S. Venkataramiah J., JUDGMENT as he then was, in Kanpur Suraksha Karamchari Union (supra) , speaking for the Court observed as under: “4. The Act is applicable both to the fac- tories run by government and the factories run by other private companies, organisa- tions, persons etc. It was enacted for the purpose of improving the conditions of the workers in the factories. Section 46 of the Act reads thus: ‘46. Canteens.— (1) The State Govern- ment may make rules requiring that in Page 80 81 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

( a ) the date by which such canteen shall be provided; ( b ) the standards in respect of con- struction, accommodation, furniture and other equipment of the canteen; ( c ) the foodstuffs to be served therein and the charges which may be made therefor; ( d ) the constitution of a managing committee for the canteen and repre- sentation of the workers in the man- agement of the canteen; ( dd ) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuffs and which shall be borne by the employer; JUDGMENT ( e ) the delegation to the Chief In- spector, subject to such conditions as may be prescribed, of the power to make rules under clause ( c ).’ 5………The expression “occupier” of a factory is defined in Section 2( n ) of the Act as the person who has ultimate control over the affairs of the factory, provided that ( i ) in the case of a firm or other associa- tion of individuals, any one of the indi- Page 81 82 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT Page 82 83 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Managing Committee. The accounts pertaining to a canteen in a government factory may be audited by its departmental Accounts Offi- cers.”

this case which reads thus: “67. Equipment: (5) There shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for efficient running of the canteen. Suitable clean clothes for employees serving in the canteen shall also be provided and maintained. (6) The furniture utensils and other equipment shall be maintained in a class and hygienic condition. A service counter, if provided, shall have a top of smooth and impervious material. Suitable facilities including an adequate supply of hot water shall be provided for the cleaning of utensils and equipment. (7) Where the canteen is managed by a co- operative society, registered under the Bombay Co-operative Societies Act, 1952, as in force in the Union Territory of Delhi, the occupier shall provide and maintain the equipment as required under sub-rule (1) for such canteen.” JUDGMENT Page 83 84 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 19. In the case in hand, it is an undisputed fact that the building for running the canteen is

the Notification of 1991 referred to supra to provide for necessary furniture and infrastructure to run the statutory canteen in the premises of Air India. In the case of Kanpur Suraksha Karmachari Union referred to supra, it was urged on behalf of the management that before the government orders were passed, the number of years of service rendered by the workmen under the managing Committee before government officially absorbed them, could not be JUDGMENT counted as years of service rendered by them. The Court had rejected the said contention urged on behalf of the management and held that even though the management of the canteen may be by the Managing Committee, the workers were employees of the factory and their services for the purposes of pension would Page 84 85 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 have to be calculated with effect from the date they started working in the canteen. Further, in the

held that the management of the canteen could be with the certain committee for determining the rights of the workers, it was the occupier of the factory who is responsible for them. The said conclusion was arrived at by this Court in that case after noticing the rights conferred on the workers though the interpretation was not confined to the provisions of the Factories Act but also regarding retirement benefits payable to the workmen employed JUDGMENT in the canteen in the said case. It was further observed by this Court that one test which is derived is in relation to the question as to who is the occupier of the relevant factory and whose responsibility is it to see whether the canteen is Page 85 86 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 provided and is running in accordance with the provisions of the Factories Act?

has also placed reliance upon another judgment of this Court in Parimal Chandra Raha (supra) upon which the CGIT placed reliance in arriving at the right conclusion to hold that the concerned workmen are entitled for absorption. In the above said case, this Court held that the appellant workmen working in the canteens at different offices of LIC across the country were like regular employees of the LIC as the canteens are run and managed by different JUDGMENT entities like Canteen Committees, Cooperative Society of the employees and even contractors and directions about how to run the canteen were issued by the LIC. In the said case, the infrastructure, the premises, the furniture, electricity, water etc. were supplied by the LIC. The working hours were also fixed by the LIC. Though LIC was obviously not Page 86 87 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 a factory, and the canteen established and run by it was not a statutory canteen, still this Court held

non-statutory obligation to provide a canteen, the position is the same and that the canteen workers become a part of the establishment. Therefore, in the said case it is held that the workmen were entitled to the same wages as Class-IV employees of the LIC. 21. In another decision rendered by three judge Bench of this Court in the M.M.R.Khan’s case, JUDGMENT demands were made by the canteen workers in many manufacturing establishments like textiles, sugar mills, rope factories and also in service establishments like RBI, LIC, Railways and Airways for establishment of a statutory canteen where there are more than 250 workmen working in such factory. In public sector undertaking like Airways, there are Page 87 88 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 different types of situations. One of them is the statutory canteen which must be provided by such

manufacturing activities are involved. In the instant case the Air India falls under the category of factory where the occupier is defined under Section 2(n) of the Factories Act and therefore, it is duty bound to provide a canteen to its employees/ workmen which is known as the statutory canteen. It is the statutory obligation on the part of Air India to provide a statutory canteen under the provisions of Factories Act and Rules and therefore, it is one JUDGMENT more strong circumstance in favour of the concerned workmen for regularization in their services as permanent workmen by the Air India. The most important legal aspect of the case which is required to be considered by me in this case is that the law stipulates statutory obligation on the part of Air Page 88 89 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 India to provide and maintain statutory canteen to cater the food stuff to its employees/ workmen as

workmen cannot be withdrawn by the owner of the establishment, namely, the principal employer. Therefore, the necessary corollary to this condition is the fact that in such a situation the nature of employment involved in the canteen in question is perennial in nature. The need for workers to run the canteen by the Management of Air India is permanent. The vacancies of various posts in the canteen are permanent in nature. JUDGMENT 22. From the review of case law on this aspect, two kinds of situations arise, one in which the contractor is changed but not the workers employed. In the Parimal Chandra Raha and the Indian Petrochemicals cases referred to supra, such were the situations, upon which strong reliance is placed Page 89 90 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 by the learned single Judge and the Division Bench of the High Court to set aside the finding of fact

note of this relevant fact and considered the same in the instant case to decide as to whether the canteen workers should be regularized by the principal employer? The other situation is where the contractor is changed and along with him the workers also get the boot. The effect of this situation appears that the workers have been temporary. In reality they are kept temporary in order to perpetuate ‘unfair labour practice by the JUDGMENT employer, which is not permissible in view of Section 25T of the I.D. Act read with entry at th Serial No. 10 in the V Schedule of the I.D. Act regarding unfair labour practices on the part of the employer. In the case in hand, I hold that Air India is the principal employer and Chefair - an Page 90 91 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 unit under HCI is the contractor, on the basis of the pleadings of the parties and law laid down by

arrived at the finding that Chefair is the unit of HCI which renews the contract of canteen workers every forty days. Unfortunately, the said workers, have been continued as contract workers in the canteen though they have completed 240 days of continuous service in a year as defined under Section 25B of the I.D. Act which action of the Air India is unfair labour practice and is prohibited under Section 25T of the I.D. Act. In spite of JUDGMENT statutory prohibition of employing the concerned workmen in the canteen on contract basis in permanent nature of work, the Chefair - a unit of HCI and Air India have indulged in unfair labour practices as defined under Section 2(ra) read with th Section 25T and the V Schedule of the I.D. Act, Page 91 92 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 with a deliberate intention to deprive the statutory rights of the concerned workmen which is a glaring

I.D. Act read with the Rules. 23. If the case pleaded by Air India and HCI is accepted by the single Judge and the Division Bench of the High Court, it amounts to giving a reward to Air India, who is the principal employer. It also amounts to holding that the concerned workmen are contract employees of the contractor and they are not put in the continuous service which amounts to JUDGMENT conferring reward upon the HCI and AIR India who have committed illegality. Both the learned single Judge and the Division Bench of the High Court have erroneously accepted the case pleaded by Air India and HCI which suffers from error in law as it goes against the statutory provisions of the Factories Act, Rules and the I.D. Act. The concerned workmen Page 92 93 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 who are working in the canteen at the relevant time have been working in the vacancies which are

permanent workmen and they are also entitled to the consequential benefits since they have rendered their services for more than 3 to 20 years continuously saving the artificial breaks imposed on them by the employer from time to time to deprive them from regularization as permanent employees of the establishment as has been held by the CGIT in its award by accepting the claim of the workmen. JUDGMENT 24. Further, it is clear from the Rules of 1950 and the Notification of 1991 referred to supra that Air India is the occupier under Section 2(n) of the Factories Act and it must provide and maintain a statutory canteen for its employees/ workmen. The vacancies in various posts that exist for canteen workers are permanent in nature but the Management Page 93 94 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 of HCI on behalf of Air India has continued them as contract workers for a long period with a break

of the I.D. Act. The temporary rotation of concerned workers in the vacancies of the canteen by the HCI, which is an instrumentality of the state is to countenance a situation where two statutory entities of the above nature collude together to perpetuate ‘unfair labour practices’ as defined under Section 2(ra) which is enumerated at serial no. 10 under the heading of ‘unfair labour practice’ on the part of th the employer in the V Schedule to the I.D. Act. JUDGMENT Therefore, this Court is bound to ensure the implementation of all relevant laws, especially those enacted by the Legislature to fulfil the constitutional obligations under the Directive Principles of State Policy and bring this unholy alliance between Air India and HCI to an end by Page 94 95 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 declaring the canteen workers as employees of the principal employer.

supports the finding recorded by the CGIT on the points of dispute in favour of the concerned workmen by directing the Air India to regularize them as canteen workers. At Para 25 of the said judgment the observations made by this Court which are very relevant for our purpose read thus: “25. Since in terms of the Rules made by the State Governments under Section 46 of the Act, it is obligatory on the railway administration to provide a canteen, and the canteens in question have been estab- lished pursuant to the said provision there is no difficulty in holding that the can- teens are incidental to or connected with the manufacturing process or the subject of the manufacturing process. The provision of the canteen is deemed by the statute as a necessary concomitant of the manufacturing activity. Paragraph 2829 of the Railway Es- tablishment Manual recognises the obliga- tion on the railway Administration created by the Act and as pointed out earlier para- graph 2834 makes provision for meeting the cost of the canteens. Paragraph 2832 ac- knowledges that although the railway admin- JUDGMENT Page 95 96 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

26. Before applying the legal principles laid down in the above paragraph of the case to the case in hand, it is pertinent to note that at the very outset three kinds of canteens exist in the Railways. They are: (i) Statutory canteens as required under Section 46 of the Factories Act, 1948 JUDGMENT where more than 250 employees are working, (ii) Non- statutory non-recognized canteens which employ 250 or less than 250 employees and hence there is no statutory obligation on the part of the employer to maintain them, where workers exceed hundred and such canteens are set up with prior approval of the Railway Board, and (iii) Non-Statutory non- Page 96 97 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 recognized canteens where 100 or less than hundred workers work and are set up without prior approval of the Railway Board. 27. In the decision of this Court in M.M.R. Khan (supra), the workers engaged in the first and second category of canteens mentioned above were treated as Railway employees after considering the relevant facts and statutory provisions of the Factories Act and the Rules. Thus, this Court held that the workmen would be entitled to all service conditions prescribed for them under relevant rules/orders. The relevant paragraph from the said JUDGMENT decision reads as under: ” 30 . While discussing above the contention that the employees in the statutory can- teens cannot be treated as railway employ- ees even for the purposes of the said Act, we have referred to the various develop- ments, and documents on record including the court decisions. It is not necessary to repeat them here. In view of the same, the contention advanced by Mr Ramaswamy that the railway administration is engaged in Page 97 98 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

(Emphasis laid by the Court) JUDGMENT 28. I have carefully analysed the law enunciated by this Court in M.M.R. Khan’s case which throws interesting light on the history of the canteen workers’ litigation which I have carefully considered and applied the legal principle laid down in that case to the fact situation of the case in Page 98 99 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 hand. The canteen workers of the canteen of Railways in Kharagpur approached the High Court of Calcutta

workers be made available to them. The learned single Judge dismissed the petition. The Division Bench directed the respondents to recognize the workers as Railway employees but rejected their plea for similar service conditions. The matter came before this Court and the Court was inclined to agree with the Division Bench decision of the Calcutta High Court and left it open to the Union of India. The railway board acted on the initiative of JUDGMENT this Court and declared that all Kharagpur canteen workers, soon followed by all statutory canteen workers across India would be deemed railway workers, but governed by their earlier service conditions. The prime mover therefore was not the Railway Establishment Manual (REM) but a judicial Page 99 100 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 interpretation clubbed with judicial nudging, to achieve the constitutional goals for canteen

that the decision rendered by this Court in M.M.R. Khan’s case is distinguishable from the facts of the instant case, as this Court placed reliance upon the REM and the circulars issued by the Railway Board in the above referred case is wholly untenable in law, for the reason that REM is also invoked by the Railways. I have to state that this Court has not given relief to railway canteen workers because of the REM. On the contrary, it is the statutory JUDGMENT status of one type of canteen that was the prime mover, not only for workers to claim their rights, but also for the railways to find a basis for classification and then create a suitable administrative system to govern all kinds of canteen workers using a reasonable basis for classification. Page 100 101 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Indeed the distinguishing feature adopted by the Railways in the above referred case is primarily the

Court in the aforesaid case without in any way watering down the importance of a statutory canteen to be provided to the employees/ workmen by the occupier of a factory. The learned single Judge and Division Bench have unjustly refused the claim of the canteen workmen by accepting the untenable arguments advanced by the learned senior counsel on behalf of the Air India that the canteen run through HCI from Chefair is not the statutory canteen and JUDGMENT Air India is not the principal employer. This conclusion is not only erroneous but is also contrary to the law laid down by this Court in the cases referred to supra which are binding upon it. 29. The presence of a statutory obligation on the part of Air India to run a canteen must always be Page 101 102 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 seen as one more strong circumstance for me to determine the wider question of regularization of

supra we noticed the facts of that case which are quite similar to the case in hand. This Court was greatly influenced in determinative way of the finding of fact and recorded that the workers were in continuous employment in the canteen for a considerable length of time. The underlying test is what is the nature of employment of the concerned workmen in the case in hand? Is it a temporary or casual vacancy or is it perennial and permanent in JUDGMENT nature? The answer to the aforesaid queries by me is that in all statutory canteens, the nature of employment, of vacancies, is indeed of a permanent nature and those who deploy the workmen on contract basis to discharge statutory duties of an employer amounts to unfair labour practice. In the nature of Page 102 103 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 rotational hire and fire, policy adopted by the employer must not be rewarded for the illegalities

coupled with the fact that the contractor also is one such entity and the two should not be allowed to continue their unfair labour practices to employ the workmen on contract basis in the canteen to discharge the statutory duty by the occupier to provide and maintain a statutory canteen for its employees/workmen in its factory. Both Air India and HCI have colluded with each other to perpetuate unfair labour practices by engaging the concerned JUDGMENT workmen in the statutory canteen of the principal employer- Air India. 30. Another important angle is examined by me in relation to the nature of test to be used to determine employment relations between the parties. Classically jurists like Salmond and others while Page 103 104 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 developing the jurisprudence relating to Torts have laid down the test to determine the relationships

control and supervision. It is needless to state that post constitutional jurisprudence in India must no longer be allowing practice of the traditional master and servant relationship but should be facilitating employer-employee relationships mediated by constitutional jurisprudence which is relevant to the area of labour law jurisprudence in our country in the interest of maintaining industrial peace and harmony which is in larger JUDGMENT public interest. 31. Further there has been considerable discussion in the area of determining the relevant test relating to the jurisprudence of employer-employee relationship. Sometimes, we have fallen back on the old principles of master and servant and quite often Page 104 105 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 when we find that these were not capable of delivering justice to the workers keeping with the

Constitution, this Court has taken note of this difficult situation and has devised new tests to meet the challenges of the new times. 32. That is why the legal principle has been enunciated by this Court right from the Hussainbhai Calicut, M.M.R. Khan, Parimal Chandra Raha to Harjinder Singh v . Punjab State Warehousing 18 Corporation establishing the trend of healthy JUDGMENT constitutional jurisprudence and its application to labour law keeping in mind the basic feature of the constitution namely to render social justice to the weaker sections of the society as has been held by this Court in Kesvananda Bharati v. State of 19 Kerala . The concept of social justice has been 18 (2010)3 SCC 192 19 ( 1973)4 SCC2 25 Page 105 106 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 vividly explained in the case of Harjinder Singh, the relevant paragraph of which is extracted hereunder: “ 30 . Of late, there has been a visible shift in the courts’ approach in dealing with the cases involving the interpretation of social welfare legislations. The attrac- tive mantras of globalisation and liberali- sation are fast becoming the raison d’être of the judicial process and an impression has been created that the constitutional courts are no longer sympathetic towards the plight of industrial and unorganised workers. In large number of cases like the present one, relief has been denied to the employees falling in the category of work- men, who are illegally retrenched from ser- vice by creating by-lanes and side-lanes in the jurisprudence developed by this Court in three decades. The stock plea raised by the public employer in such cases is that the initial employment/engagement of the workman/employee was contrary to some or the other statute or that reinstatement of the workman will put unbearable burden on the financial health of the establishment. The courts have readily accepted such plea unmindful of the accountability of the wrong doer and indirectly punished the tiny beneficiary of the wrong ignoring the fact that he may have continued in the employ- ment for years together and that micro wages earned by him may be the only source of his livelihood.” JUDGMENT Page 106 107 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 33. Courts in this country have been faced with the

of the Constitution Bench decision in Steel Authority of India ’s case (supra) on the subject, the crucial test is to determine whether the nature of the contractual relationship between the parties that is juristically introduced is a genuine one or a sham contract. It must be noted that employers and their organizations and indeed all parties to labour litigation keep close watch on the evolving jurisprudence and tailor legal agreement and paper JUDGMENT contracts accordingly to suit the purpose of finding the cheapest and most exploitable labour with honourable exceptions as we have seen in the case of the railway management. This craze for facilitating ‘flexible labour’ which is another phrase for ‘hire and fire’ deserves no constitutional sympathy. Page 107 108 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 34. Two broad judicial approaches have manifested themselves in the above background - one that

out in Harjinder Singh’s case (supra) and the other that abides by the new dogmas of globalisation and liberalisation. It is my considered view that I must abide by the former jurisprudence keeping in view the mandate we find in the judgments of this Court referred to supra. 35. The test which I come across is almost universal in its application to address the wide range of fact situations which has been discussed by me in this JUDGMENT judgment. In the case of Hussainbhai (supra), this Court has held that the test of economic control in contrast to the test of control and supervision is the test to ascertain the employer-employee relationship. I am inclined to apply the above test to the fact situation of the case in hand to Page 108 109 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 determine the fact as to whether a genuine contract or a sham contract exists between Air India and the

contractual arrangement between the two public sector corporations named above, I must come to the conclusion that what I see is a sham contract between them behind which many unfair labour practices like the 40 days contract of employment of the concerned workmen in the canteen has been perpetuated by them in order to deny permanent employment to the workmen in the canteen which is of permanent and statutory in nature and therefore JUDGMENT carries with it permanent vacancies. 36. The learned senior counsel on behalf of Air India, placing reliance upon the decision of this Court referred to supra urged that the concerned workmen in the canteen are ‘workmen’ only for the purpose of Factories Act. I disagree with the said Page 109 110 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 contention and the view point for the reason that the same workers are also 'workers' as defined under

th serial numbers 5 and 10 of the V S chedule of the I.D. Act pertains to “Unfair Labour Practices” under the I.D. Act which prohibits employers from committing such illegalities, for which the statutory penal action is prescribed under Section 25U of the I.D. Act on such persons. The existing practice that is followed by either the Hotel Corporation of India or Air India independent of each other or in collusion thereof is unbecoming of a model employer. JUDGMENT Interestingly, this position would remain the same irrespective of whether the canteen worker is an employee of the 'independent contractor' or the 'principal employer'. 37. Further question is whether the above two legal entities are independent of each other or not, has Page 110 111 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 become central focus to stay within the confines of the test of 'control and supervision'. I am prompted

what extent. If, however, I have to apply the other tests already laid down by this Court as, I propose to do in this case in Hussainbhai’s case, then the independence of the separate legal personalities and the interpretation made in Salomon v . Salomon , on which the learned single judge relies, pales into in- significance. The relevant paragraph reads as under: “Then, if the company was a real company, fulfilling all the requirements of the Leg- islature, it must be treated as a company, as an entity, consisting indeed of certain corporators, but a distinct and independent corporation. The Court of Appeal seem to treat the company sometimes as substantial and sometimes as shadowy and unreal: it must be one or the other, it cannot be both. A Court cannot impose conditions not imposed by the Legislature, and say that the shareholders must not be related to each other, or that they must hold more than one share each. There is nothing to prevent one shareholder or all the share- holders holding the shares in trust for JUDGMENT Page 111 112 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 some one person. What is prohibited is the entry of a trust on the register: s. 30 . If all the shares were held in trust that would not make the company a trustee.”

Court in catena of cases namely, Kanpur Suraksha Karamchari Union and Basti Sugar Mills Ltd. referred to supra . In the case of State of UP v. Renusagar Power Co. (supra) , this Court held as under: “55. ……On the other hand these English cases have often pierced the veil to serve the real aim of the parties and for public purposes. See in this connection the ob- servations of the Court of appeal in DHN Food Distributors Ltd. v. London Borough of Tower Hamlets . It is not necessary to take into account the facts of that case. We may, however, note that in that case the corporate veil was lifted to confer benefit upon a group of companies under the provisions of the Land Compensation Act, 1961 of England. Lord Denning at p. 467 of the report has made certain inter- esting observations which are worth re- peating in the context of the instant case. The Master of the Rolls said at p. 467 as follows: JUDGMENT ‘Third, lifting the corporate veil. A further very interesting point was raised by counsel for the claimants Page 112 113 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT Page 113 114 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 necessary for them to go through a conveyancing device to get it……’ XXX XXX XXX XXX XXX XXX 65. Mr. Justice O. Chinnappa Reddy speak- ing for this Court in LIC v. Escorts Ltd. had emphasised that the corporate veil should be lifted where the associated com- panies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumer- ate the classes of cases where lifting the veil is permissible, since that must nec- essarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct, the in- volvement of the element of the public in- terest, the effect on parties who may be affected. After referring to several Eng- lish and Indian cases, this Court observed that ever since A. Salomon & Co. Ltd. case a company has a legal independent exis- tence distinct from individual members. It has since been held that the corporate veil may be lifted and corporate personal- ity may be looked in. Reference was made to Pennington and Palmer’s Company Laws. JUDGMENT 66. It is high time to reiterate that in the expanding horizon of modern jurispru- dence, lifting of corporate veil is per- missible. Its frontiers are unlimited. It must, however, depend primarily on the re- alities of the situation. The aim of the Page 114 115 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT XXX XXX XXX 68 . The veil on corporate personality even though not lifted sometimes, is becoming more and more transparent in modern com- Page 115 116 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

39. The above said judgment is followed by this Court in D.D.A. v. Skipper Construction Co. (supra) . The relevant paragraphs read as under: “26 . The law as stated by Palmer and Gower has been approved by this Court in TELCO v. State of Bihar . The following passage from the decision is apposite: ‘… Gower has classified seven cate- gories of cases where the veil of a corporate body has been lifted. But, it would not be possible to evolve a ra- tional, consistent and inflexible prin- ciple which can be invoked in determin- ing the question as to whether the veil of the corporation should be lifted or not. Broadly stated, where fraud is in- tended to be prevented, or trading with an enemy is sought to be defeated, the veil of a corporation is lifted by ju- dicial decisions and the shareholders are held to be the persons who actually work for the corporation.’ JUDGMENT Page 116 117 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

JUDGMENT Page 117 118 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 adopted for committing illegalities and/or to defraud people. The concept of resulting trust and equity”

JUDGMENT (Emphasis laid by the Court) 20 41. This Court in Secretary, HSEB v. Suresh & Ors . has held as under: 20 (1999) 3 SCC 601 Page 118 119 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

XXX XXX XXX 9 . The High Court did in fact note with care and caution the doctrine of “lifting of the veil” in industrial jurisprudence and recorded that in the contextual facts and upon lifting of the veil, question of having any contra opinion as regards the exact relationship between the contesting parties would not arise and as such di- rected reinstatement though, however, without any back wages. While it is true that the doctrine enunciated in Saloman v. Saloman & Co. Ltd. came to be recognised in the corporate jurisprudence but its ap- plicability in the present context cannot be doubted, since the law court invariably has to rise up to the occasion to do jus- tice between the parties in a manner as it deems fit. Roscoe Pound stated that the JUDGMENT Page 119 120 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 greatest virtue of the law court is flexi- bility and as and when the situation so demands, the law court ought to administer justice in accordance therewith and as per the need of the situation. XXX XXX XXX 13 . There is, however, a total unanimity of judicial pronouncements to the effect that in the event the contract labour is employed in an establishment for seasonal workings, question of abolition would not arise but in the event of the same being perennial in nature, that is to say, in the event of the engagement of labour force through an intermediary which is otherwise in the ordinary course of events and involves continuity in the work, the legislature is candid enough to record its abolition since involvement of the con- tractor may have its social evil of labour exploitation and thus the contractor ought to go out of the scene bringing together the principal employer and the contract labourers rendering the employment as di- rect, and resultantly a direct employee. This aspect of the matter has been dealt with great lucidity, by one of us (Majmu- dar, J.) in Air India Statutory Corpn. v. United Labour Union . JUDGMENT XXX XXX XXX 17 . Needless to note at this juncture that the Contract Labour (Regulation and Aboli- tion) Act being a beneficial piece of leg- Page 120 121 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011

XXX XXX XXX 20 . It has to be kept in view that this is not a case in which it is found that there was any genuine contract labour system prevailing with the Board. If it was a genuine contract system, then obviously it had to be abolished as per Section 10 of the Contract Labour Regulation and Aboli- tion Act after following the procedure laid down therein. However, on the facts of the present case, it was found by the Labour Court and as confirmed by the High Court that the so-called contractor Kash- mir Singh was a mere name lender and had procured labour for the Board from the JUDGMENT Page 121 122 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 open market. He was almost a broker or an agent of the Board for that purpose. The Labour Court also noted that the manage- ment witness Shri A.K. Chaudhary also could not tell whether Shri Kashmir Singh was a licensed contractor or not. That workman had made a statement that Shri Kashmir Singh was not a licensed contrac- tor. Under these circumstances, it has to be held that factually there was no gen- uine contract system prevailing at the relevant time wherein the Board could have acted as only the principal employer and Kashmir Singh as a licensed contractor em- ploying labour on his own account. It is also pertinent to note that nothing was brought on record to indicate that even the Board at the relevant time was regis- tered as the principal employer under the Contract Labour Regulation and Abolition Act. Once the Board was not a principal employer and the so-called contractor Kashmir Singh was not a licensed contrac- tor under the Act, the inevitable conclu- sion that had to be reached was to the ef- fect that the so-called contract system was a mere camouflage, smoke and a screen and disguised in almost a transparent veil which could easily be pierced and the real contractual relationship between the Board, on the one hand, and the employees, on the other, could be clearly visu- alised.” JUDGMENT (Emphasis laid by the Court) 42. The legal principle laid down by this Court by Page 122 123 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 following the exposition of law for lifting the veil to find out real facts is very much necessary to the

correctness of the findings of the High Court in reversing the finding of fact recorded in favour of the concerned workmen by the CGIT in its award with a view to find out whether the arrangement with or without the consent of the owner company facilitated the violation of the basic principles of labour jurisprudence established in this country over a period of more than six decades, especially JUDGMENT principles relating to security of tenure, retrenchment, natural justice, and many other standards relating to "decent conditions at work". If two statutory corporations owned by the Government of India are governed by Rule of law, namely Factories Act and Page 123 124 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Industrial Disputes Act, in the manner in which they contended, it would be opposed to the labour

by this Court in plethora of cases referred to supra whose relevant paragraphs are extracted as above in support of my conclusion to hold that the finding in the impugned judgments of the High Court that is, the HCI, though it is a subsidiary company of Air India, yet it is a separate and distinct legal entity and that the concerned workmen have been employed by the HCI and not Air India and hence, there is no relationship of employer and employee and JUDGMENT disciplinary control upon them by Air India, which has been reached at by the High Court and setting aside the findings recorded by the CGIT in favour of the concerned workmen, is not only erroneous but also suffers from error in law as the same is opposed to the law laid down by this Court in catena of cases Page 124 125 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 referred to supra. 43. Any other test required to be applied to the

'independent contractor', is irrelevant to the critical issues which arise in this case. The view taken by the Delhi High Court regarding the separate legal identity of both these corporations, and erroneously setting aside the findings of the CGIT is not the determining factor in this case. There have been varying practices in vogue in this regard. In the Parimal Chandra Raha ’s case (supra), it is noticed that there were 'Managing Committees’, and JUDGMENT 'Cooperative Societies' which could not exist without a separate legal personality that is, 'Contractors', many of them also create convenient legal personalities under garb of different legal entities. The presence of a contractor clothed with a legal personality or not as in the case of the defence establishments referred to above in the Suraksha Page 125 126 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Karamchari Union’s case (supra) also has hardly ever been considered to be a determinative test pertaining

44. For the reasons recorded by me on the contentious points with reference to the facts, legal evidence and law laid down by this Court in plethora of cases, I am in agreement with the CGIT on the finding of facts recorded by it on the question of the relationship between the concerned workmen and the Air India on proper appreciation of pleadings and the legal evidence on record and piercing the veil to the fact situation to find out true facts which is JUDGMENT rightly answered by CGIT on the points of disputes and the said finding is in conformity with the law laid down by this Court in Hussainbhai’ case and M.M.R. Khan and other cases referred to supra for the reason that the contract with the HCI which is a subsidiary Company of Air India and employing the contract workers to work in the statutory canteen, is Page 126 127 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 a sham contract. They have been engaged in permanent nature of work continuously for number of years. The

regularization and to be absorbed as employees of Air India, without prejudice to any managerial arrangement to avail the expertise of the HCI of India through existing arrangements. Indeed that would be a win-win situation for all the stake holders concerned in this case- the corporates, the Air India employees numbering more than 2000 in this case and the disempowered canteen workers and that would also be in harmony with our constitutional JUDGMENT jurisprudence. 45. However it must be clarified that the requirement of reservation as provided for in Articles 14 and 16 of the Constitution must be complied with while regularizing the canteen workers as employees of Air India. This can be achieved by complying with Page 127 128 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 relevant provisions of the I.D. Act in contrast to the action taken by the HCI in violation of the said

regularization on the rolls of Air India. This does not itself impose any additional expenditure for it. Therefore, the concern of the learned single Judge of the High Court, on this count is not attracted in the context of the relief sought for by the concerned workmen. 46. The special facts which are intermingled with questions of fact relevant to the case at hand may JUDGMENT once again be noticed by me to hold that the concerned workmen have completed 240 days despite attempt of the contractor by giving break in service of the concerned workmen by the statutory corporation which is an instrumentality of the state which is not permissible in law. Page 128 129 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 47. The wages of the canteen workers and other costs are paid through the arrangement of per head subsidy

-Air India. The supervision and control of the establishment is adequately provided for through the 'Memorandum and Articles of Association' which binds both the 'sole owner' and the 'wholly owned subsidiary'. The service of running the statutory canteen is provided for the benefit of the employees of Air India. The statutory obligation on the part of Air India to run the canteen is squarely placed on the shoulders of the occupier of the factory as per JUDGMENT Section 2(n) of the Factories Act, because they employ more than 2000 employees despite resorting to pleadings stating that it did not employ more than 250 workers, thus seeking to escape from the consequences that may follow in case of a 'statutory canteen' without challenging the Notification of the Page 129 130 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Labour Department issued by the Lt. Governor of Delhi under Rules 65 to 70 of the Rules.

economic control, as held by this Court in Hussainbhai’s case, I am of the view that the relief sought for by the concerned workmen which is accepted by the CGIT is legal and valid. Therefore, I have to accept the finding and reasons recorded by the CGIT though the reasons which I have assigned are not the reasons assigned by it but the conclusions arrived at by the CGIT while determining the points of dispute referred to it are legal and valid. Therefore, the JUDGMENT reasons assigned by me in this judgment must be read into the reasons of the award of the CGIT. The aforesaid reasons are assigned by me in this judgment after careful examination of the rival legal contentions urged by the learned senior counsel on behalf of the parties with reference to the provisions of the Factories Act, Rules, Contract Page 130 131 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Labour Act and Industrial Disputes Act and law laid down by this Court in catena of cases. These points

Answer to point No. 3: 49. In view of the foregoing reasons recorded by me in answering the point Nos. 1 and 2 after adverting to the relevant facts and interpretation of certain provisions of the Factories Act, Rules and the Industrial Disputes Act, particularly Sections 2(k), 2(s) read with the provisions of Section 25(T) and Section 25(U) of the Industrial Disputes Act and th Entry No.10 in the V Schedule under the definition JUDGMENT of unfair labour practices as defined in Section 2(ra) regarding the employment of the workmen on contract basis against the permanent nature of employment in the statutory canteen I have held that this practice by Air India constitutes unfair labour practice. The decisions rendered by this Court which Page 131 132 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 have been extensively referred to by me and some of the cases referred to by the CGIT have rightly

facts pleaded, legal evidence on record and I have applied the legal principles laid down by this Court in the cases of Basti Sugar Mills Ltd., Parimal Chandra Raha, Kanpur Suraksha Karamchari Union and M.M.R. Khan (all referred to supra) to the fact situation of the case on hand to restore the award of the CGIT. The CGIT has rightly come to the conclusion and recorded the finding of fact assigning valid and cogent reasons. Therefore, I have to answer that the JUDGMENT findings and reasons recorded by CGIT on the points of dispute in relation to the concerned employees declaring that the concerned contract workers of the canteen are deemed employees of Air India is a right decision which has been reached after appreciation of evidence on record and adhering to the legal Page 132 133 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 principles laid down by this Court in catena of cases. Further, setting aside the termination orders

is also justified for the reason that the services of the concerned workmen in the above cases were terminated during pendency of the industrial disputes before CGIT regarding absorption of the concerned workmen as permanent employees, without obtaining approval from the CGIT as required under Section 33(2)(b) of the I.D. Act. Apart from the above reason, the termination of services of the workmen involved in the above industrial dispute cases is JUDGMENT unsustainable in law for the reason that they have not complied with the mandatory provisions of Section 25F, clauses (a) and (b) of the I.D. Act and have not obtained the permission from the Central Government as required under Section 25N of Chapter VB of the I.D. Act. Therefore, the orders of termination passed Page 133 134 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 against the concerned workmen are void ab initio in law and the same are liable to be set aside. I have

Disputes on the file of CGIT on findings and reasons recorded on the points of dispute referred to it by the Central Government upon which adjudication is made by the CGIT. The same cannot be termed either as erroneous or error in law. Accordingly, I answer the point No.3 in favour the concerned workmen. Answer to point No.4: 50. The findings and reasons recorded on the JUDGMENT contentious points by both the learned single Judge and the Division Bench of the Delhi High Court in the impugned judgment that no better service conditions than the Management of HCI would be provided to the canteen workers except to get free air tickets which apparently some employees of Air India are entitled Page 134 135 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 to, is untenable in law. Incidentally this is another aspect which may have a bearing on the

significance of the region cum industry principle so well developed in our labour jurisprudence. It is seriously concerned about competition and viability rather than focus on the handful of canteen workers. 51. The learned single Judge and the Division Bench have interfered with the finding of fact recorded in the common award passed by the CGIT by disagreeing with the findings and reasons recorded by the CGIT JUDGMENT and holding that the HCI is a subsidiary corporation of Air India and it has got 100% share holding and power to appoint the Directors of the HCI and after referring to the decisions of this Court in Kanpur Suraksha Karamchari Union case (supra), it held that it is a separate legal entity which finding of fact and reason has been concurred with by the Division Page 135 136 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Bench by assigning the similar reasons placing reliance on the decision of this Court in M.M.R.

distinguished by the Division Bench of the High Court after adverting to certain paragraphs without considering the relevant paragraph Nos. 25 and 30 which has laid down the legal principle and also referred to other judgments namely Indian Petrochemicals Corporation Ltd. and Hari Shanker Sharma referred to supra without piercing the veil to the real facts of the case. JUDGMENT 52. Both the learned single Judge and the Division Bench have exceeded in their jurisdiction in exercising their extraordinary and supervisory jurisdiction in the Writ Petitions and the Letter Patent Appeals, while examining the correctness and findings recorded by the CGIT in the common award which the High Court has disagreed with and has set Page 136 137 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 aside the common award impugned in the Writ Petitions filed by Air India. Both the learned

fact recorded by the CGIT on the points of dispute and the contentious issues on proper appreciation of pleadings, evidence on record and law laid down by this Court in the cases referred to in the award I have referred to the relevant factual aspects and legal evidence and the statutory provisions of the Factories Act, Rules and the Industrial Disputes Act, while answering to Point Nos.1, 2 and 3 in favour of the concerned workmen by recording my JUDGMENT reasons in this judgment. Therefore, I have to hold that the learned single Judge and the Division Bench exceeded in their jurisdiction to interfere with the finding of fact recorded by the CGIT on the points of dispute which were referred to by the Central Government. For the reasons recorded by me on point Page 137 138 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 Nos. 1 and 2 in this judgment and further answering the point No.3 in affirmative in favour of the

referred to it by the Central government are neither erroneous nor suffers from error in law. Also I have to hold while answering to point No. 4 that both the learned single Judge and the High Court have disagreed with the correct finding of fact recorded by the CGIT in its award. The findings recorded by the learned Singh Judge and Division Bench in the impugned judgment are not only erroneous but suffers from error in law as the same is contrary to the JUDGMENT statutory provisions and law laid down by this Court which have been extensively referred to by me in the reasoning portion of this judgment in answer to point Nos. 1 and 2. Hence, I have to hold that findings and reasons recorded in the impugned judgment is wholly untenable and liable to be set Page 138 139 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 aside and accordingly set aside by answering point no. 4 in affirmative in favour of the concerned workmen. Answer to Point No.5: 53. Since I have answered point No. 4 in favour of the concerned workmen and against Air India, the appellants are entitled for the reliefs as prayed for in these appeals. Accordingly, these appeals are allowed and common award dated 5.5.2004 passed in I.D. Nos.97 to 99 of 1996 in favour of the workmen is restored. Further, I direct the Management of Air India to absorb all the concerned workmen JUDGMENT covered in the I.D. Nos.97 to 99 of 1996 as permanent workmen on its rolls from the date of their appointment and grant all the consequential benefits such as salary for which they are entitled for after computing properly, taking into consideration the pay scale and periodical wage revision that has taken place and are applicable to Page 139 140 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 the respective posts of the concerned workmen as per the notification issued by the Lt. Governor, Union

54. Since I have allowed I.D. Nos. 97 to 99 of 1996, the Industrial Dispute case Nos. 107 and 108 of 1996 involving the workmen whose services were terminated during the pendency of petition before CGIT, must also be treated as permanent workmen at par with the concerned workmen involved in the instant case. The award for their reinstatement to their posts shall be passed with all consequential benefits with full JUDGMENT back wages. Page 140 141 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 55. Accordingly, I allow the appeals of the concerned workmen in the above said terms. ……………………………………………………………J. [V. GOPALA GOWDA] New Delhi, November 13, 2013 JUDGMENT Page 141 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 142 JUDGMENT Page 142 C.A.Nos.10264-10266/2013 @ SLP(C)Nos. 24946-24948/2011 143 JUDGMENT Page 143