NATIONAL ALUMINIUM CO.LTD. vs. ANANTA KISHORE ROUT .

Civil Appeal No.5989 of 2008 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5989 of 2008

Vs. Ananta Kishore Rout & Ors. ….Respondent(s) With Civil Appeal No.5992 of 2008 Civil Appeal No.5993 of 2008 J U D G M E N T A.K. SIKRI, J. 1. The Appellant herein, National Aluminium Company Limited (NALCO) has established two schools for the benefit of the wards of its-employees. These schools are JUDGMENT known as Saraswati Vidaya Mandir (SVM) and located at NALCO Nagar in Angul district and at Damandjodi in Koraput district, Orissa. Management of these schools is presently in the hand of Saraswati Vidya Mandir (SVS) which is affiliated to Vidya Bharati Akhila Bharatiya Sikhya Sansthan. 1 Page 1 Civil Appeal No.5989 of 2008 2. Two Writ Petitions were filed by the employees of each of school in the Orissa High Court, Cuttack for a declaration that they are the employees of NALCO and be treated as

employees of NALCO. Having regard to the commonality of fact, situation under which these writ petitions were filed, as well as singularity of the issue involved, both these writ petitions were heard together by the High Court, the st outcome of which is the judgment dated 21 December, 2006. The High Court has accepted the case of these employees of SVM holding them to be the employees of the NALCO. As a sequittor, direction is issued to the NALCO to make available the benefits, which are enjoyed JUDGMENT by other employees of the NALCO. Present appeals, filed by NALCO, question the validity of the aforesaid judgment of the High Court. 3. We may first take note of those facts which are not in dispute. These are as follows: 2 Page 2 Civil Appeal No.5989 of 2008 NALCO is a Public Sector Enterprise under the Government of India. It is Company incorporated under the Indian Companies Act, 1956 with its registered office at

manufacturing units: one at NALCO Nagar, Angul and at Damanjodi in Koraput district. 4. In the year 1984, NALCO established two schools in the townships set up by it for its employees working in its manufacturing units at NALCO Nagar, Angul and at Damanjodi, with a view to provide educational facility mainly to the children of its employees from primary to +2 level though the children from neighbouring area are also JUDGMENT given admissions. It also provided necessary infrastructure, such as land, building, furniture, library, laboratory equipments and other assets. The said schools admittedly th are unaided private schools. On 15 May, 1985, NALCO entered into two separate but identical agreements for the aforesaid schools with the Central Chinmoy Mission Trust, Bombay (in short, CCMT) whereunder the NALCO entrusted 3 Page 3 Civil Appeal No.5989 of 2008 the management of the schools on contract basis to CCMT and the schools were called Chinmay Vidyalayas. According to the these agreements, NALCO agreed to pay an amount of

5. These Agreements acknowledged the fact that the two schools have been established by the NALCO and to start and run those schools, it had approached CCMT. The Agreements further stipulated terms and conditions on which CCMT was to run and manage these schools. It is a common case of the parties that the schools have been recognized by the State Government (Education Department) and also affiliated to the Orissa Board of Secondary Education. As per JUDGMENT the requirements of the Statute governing school education, every school is required to constitute a Managing Committee. Accordingly, these Agreements also provided that the powers to establish, maintain and manage the schools shall vest in the Managing Committee consisting of seven members. Out of these seven members, four were the nominees of CCMT and three persons were nominated by the NALCO. Chairman, 4 Page 4 Civil Appeal No.5989 of 2008 Vice-Chairman and Secretary-cum-correspondent were to be the nominees of CCMT. Though the admission in the schools is open to all children irrespective of caste, creed and

building and providing requisite furniture and fittings, NALCO was also to provide quarters at its own cost for teachers and staff members of the schools. NALCO also agreed to provide residential accommodation to every employee in due course. Significantly, the employees of the schools were to be treated at par with NALCO employees so far as the medical, consumer co-operative, club and similar facilities are concerned. NALCO also agreed to meet the revenue deficit as per Clause 15 of the said Agreement which reads as under: JUDGMENT “15. That NALCO shall meet the revenue defit of Chinmaya Vidyalaya, Damanjodi on the actual basis. Since NALCO shall be meeting the capital expenditure and the revenue deficit, NALCO shall have the right to fix the tuition fees and other charges from time to time for children of NALCO employees and others.” 6. These agreements were terminable at the instance of the parties by giving six months prior notice in 5 Page 5 Civil Appeal No.5989 of 2008 writing to the other party. In the event of termination the agreements, the services of the staff employed by the school were liable to be terminated in accordance with the terms of

7. These agreements came to an end by efflux of time in the year 1990. It appears that CCMT was not interested in continuing with the aforesaid arrangement. This led NALCO to find another organization for running and managing the schools. It is how SVS came into the picture which agreed to manage both the schools. Accordingly th Agreement dated 18 May, 1990 was entered into by NALCO with SVS. As per the Agreement, name of the school was changed from Chinmaya Vidyalaya Damanjodi to Saraswati JUDGMENT Vidya Mandiar (SVM). As per this agreement NALCO agreed to pay Rs.2,000/- per month to the SVS towards its supervision charges which was enhanced from time to time and this figure was Rs.50,000/- per annum at the time of the filing of the writ petitions in the High Court. Even as per this Agreement, the Executive Authority of these two schools vests in the Managing Committee to be constituted 6 Page 6 Civil Appeal No.5989 of 2008 separately for each of the schools. This Managing Committee is constituted with the following members:

b) A nominee of the Finance department of the respective units of NALCO; c) A nominee of the Personnel Admn. Department of the respective units of NALCO; d) A representative of the parents/guardians who hsall be an employee of NALCO to be co-opted by the Managing Committee respectively for each school at the units; e) 4 members to be nominated by the Samiti; f) The headmaster of the school; g) A representative of the teachers; h) A part-time representative of the Samiti who shall act as the ex-officio member-secretary of the Managing Committees.” JUDGMENT The aforesaid clause in the Agreement is with a proviso that the relevant provisions of the Orissa Education Act and Rules shall be kept in view while making aforesaid nominations. 8. Accordingly, two Managing Committees were constituted; one for each school and both have been 7 Page 7 Civil Appeal No.5989 of 2008 registered under the Societies Registration Act, 1860. As per the provision contained in clause 4 of the aforesaid Agreement, other clauses relating to placing at the exclusive

equipments, audio-visual, etc. remain as it is. Likewise provision for providing deficit funds, after accounting for the fee and other amounts received from the students, by NALCO is also maintained. Other functions which are specifically assigned to the Managing Committee, as per this Agreement, are as follow: “(a) Audit of the schools accounts by the Auditors appointed by the Managing Committee. (b) Managing Committee to raise funds by way of donation and voluntary contribution including power to borrow funds or raise loans for the purpose of the schools after getting prior approval of the Samiti, without any liability to NALCO.” JUDGMENT 9. It is also significant to note that apart from providing usual termination clause, as per this Agreement, the Samiti agreed to retain the services of the 8 Page 8 Civil Appeal No.5989 of 2008 existing teachers and staff in both the schools as provided in clause 25 thereof, which is to the following effect:

10. Since the teaching and non-teaching staff working in the aforesaid schools had no service conditions, there was discontentment among the employees. Therefore, it was thought proper to frame rules regulating conditions of service for such employees. A joint meeting was convened for this purpose wherein certain modalities were worked out to frame rules regarding recruitment and conditions of JUDGMENT services of the employees of the schools and a committee for this purpose was constituted comprising of the authorities of both the schools at Angul and Damanjodi, the Manager (Personnel) of NALCO and the Secretary of SVS. A set of draft rules was framed under the name and style ‘Saraswati Vidyamandir Employees’ Recruitment and Conditions of 9 Page 9 Civil Appeal No.5989 of 2008 Service Rules, 1995’ (Rules’ hereinafter). The Rules so framed were approved by the Corporate office of NALCO. 11. These Rules provide for the scales of pay

recruitment of Principal, teachers and other non-teaching staff and determination of seniority of the employees besides fixing the age of superannuation etc. 12. It cannot be disputed that as per these Rules, it is the Managing Committee’s of the schools, which are registered as societies under the Societies Registration Act, undertake the recruitment of the teaching and other staff, issue appointment letters and take all other decisions in respect of the services of teaching and other staff including JUDGMENT promotion, pay fixation, seniority, grant of leave, disciplinary action, retirement, termination etc. This has been so demonstrated by NALCO by producing copies of the orders issued by the MCs relating to each of the aforesaid aspects. Not only this, it has been so provided under the Rules as well. Rule 4 prescribes the method of recruitment; Rule 2(a) defines the appointing as MC; Rule 4(11) deals with the cadre 10 Page 10 Civil Appeal No.5989 of 2008 of posts; Rule 20 touches the aspect of termination of service; and Rule 24 deals with the discipline and disciplinary action. 13. From these facts, narrated above, one

the parties. The employees of both schools filed the writ petitions to lay the claim that they are the employees of the NALCO on the ground that real control and supervision of the schools, including the staff is that of NALCO which has the final say in all vital matters. It was their argument that though the appointments are made by the Managing Committees of the schools, it is on the recommendation of the Selection Committee of which the authorities of NALCO are the members. Further, since inception of the school, an JUDGMENT officer in the rank of General Manager of NALCO has been functioning as the President of the Managing Committee, and an officer in the rank of Chief Manager/DGM (Personal Admn.), and the DGM (Finance) are the other two members. That apart, the building furniture/fittings and all necessary paraphernalia for running of the schools is provided by and is the responsibility of NALCO. Even the finances are provided 11 Page 11 Civil Appeal No.5989 of 2008 by NALCO the financial budget is approved by the Board of Director of the NALCO. NALCO even fixes the tuition fee. No transaction of the schools can be made without the approval

reimbursement, leave travel concession, festival advance, increments, etc. Teaching and non-teaching staff of the schools are allotted with residential quarters by the NALCO. It was thus argued that NALCO plays a decisive role in the matter of appointment of the employees as well as in the management of the schools. 14. On the other hand, the case of the NALCO was that Managing Committees are the societies registered JUDGMENT under Societies Registration Act having independent legal status; it is these MCs which are not only the appointing authorities but disciplinary authorities with all controlling power over these employees and therefore NALCO cannot be treated as the employer of the staff of the schools. 15. The High Court after considering the respective submissions and perusing the material on record 12 Page 12 Civil Appeal No.5989 of 2008 came to the conclusion that real control and supervision over these employees and even over the schools, was that of NALCO. Some of the relevant discussion in the impugned

“A bare look at the basic document, i.e. agreement th dated 15 May, 1985 entered into between the NALCO and CCMT, Clause 20 of it, as indicated above, would show that on termination of the agreement, only the name of the Chinmaya Vidyalaya cannot be used by NALCO and subsequently, the place of CCMT has been taken over by SVS. From the voluminous documents as referred to above, there can be no second opinion in regard to the fact that the schools were established by the NALCO, funded by NALCO authorities and it has deep and pervasive control over the schools. It is the NALCO, which pays the salary, Provident fund, and makes the medical reimbursement, the SVS as stated in its affidavit, only looked to the discipline, curriculum and management of the schools. In this regard, we may refer to a decision rendered by this Court in OJC No.4581985 (Duryodhan Swain & Ors. vs. Fertiliser Corporation of India and others) on 22.11.1990, wherein a similar question arose. Twenty-one petitioners serving in the Fertilizer Higher Secondary school in different capacities had filed the said writ petition. The said school was imparting teaching in + 2 course and on account of the welfare need of its employees, the school was given grant and was converted into a Higher Secondary School. Even though a managing committee was constituted for the said school, representatives of trade unions and of guardians and parents as well as the officials of the corporation were also included. The financial control of the school rested in a larger measure with the JUDGMENT 13 Page 13 Civil Appeal No.5989 of 2008

It is a peculiar case, where there is no denial that all the employees are getting much higher scale of pay than that of the employees of the aided and unaided schools under the state and their pay structure is totally different and even much better than the employees of all the Government educational institutions functioning of the state. It has become possible only due to the reason that the entire finance is being paid by NALCO and if NALCO withdraws itself from the schools, neither SVS and SVM would be able to meet the expenses of the schools. JUDGMENT The agreement dated 15.05.1985 as well as the conduct of the parties and the transactions that are carried on from 1985 till today, would indicate that NALCO has deep and pervasive control over the management of the schools and it is NALCO, which is the educational agency in establishing the schools. The argument advanced by Mr. R.K. Rath, learned counsel for NALCO, and Mr. B.N. Rath, 14 Page 14 Civil Appeal No.5989 of 2008

16. Before us arguments of both the parties remain the same. Mr. P.P. Rao, learned Senior Counsel appearing for the Appellant in one appeal and Mr. Ashok Gupta, Senior Advocate appearing in the other appeal of NALCO challenged the aforesaid line of thinking of the High Court. It was argued by Mr. Rao that the High Court took into consideration those facts which were irrelevant and not germane to decide the controversy viz. over the whether JUDGMENT NALCO had any deep and comprehensive control and supervision over the teaching and other staff of the school. His submission was that establishment of the school with necessary infrastructure was not at all relevant factor. The schools were set up by NALCO acknowledging its responsibility as a model employer which can be termed as a step towards “Corporate Social Responsibility”. As a welfare 15 Page 15 Civil Appeal No.5989 of 2008 measure, NALCO wanted to provide this facility in the two NALCO campuses. However, by providing land, building and infrastructure and setting up of the school, all of it has been

employ the staff and settle their service conditions. In so far as provision of providing financial assistance is concerned, it was only to the extent of meeting shortfall, again, keeping in mind good corporate governance. He argued that the real test in such a case was to examine as to which authority was the appointing authority of the employees, and was fixing terms and conditions of the employment, including fixing their service conditions like pay fixation, seniority, grant of leave, promotion etc. When all these powers were with the JUDGMENT Managing Committee or the SVS which was so specifically provided in the service rules as well, duly approved by the Director of Education, by no stretch of imagination these employees could be called as the employees of NALCO. 17. Another submission of Mr. Rao was that even the High Court has accepted, in the impugned 16 Page 16 Civil Appeal No.5989 of 2008 judgment, that the employees of these schools are enjoying much higher scales of pay than that of the employees of aided and unaided schools under the State of Orissa and their

He, thus, argued that when it is established as an admitted fact that the salaries and services conditions of the employees of these schools are far superior than their counter parts in working in aided, unaided and government schools, there was no reason for these employees to file these petitions. Elaborating this proposition, the submission of Mr. Rao was that even if it is assumed that they are the employees of NALCO, no direction could have been given to give them the pay scales which are enjoyed by the JUDGMENT employees of NALCO, in the absence of any parity inasmuch as principle of equal pay for equal work has no application in a case like this as the duties, functions, job requirements and even the eligibility conditions for appointment of such staff were materially different from the employees of the NALCO. Therefore, the High Court could not give any direction to NALCO to make available the benefits which are being 17 Page 17 Civil Appeal No.5989 of 2008 enjoyed by other employees of NALCO to the employees of these schools. To buttress this argument he referred to the following judgments: (i) A.K. Bindal & Anr. v. Union of India & Ors. ; (2003) 5 SCC 163; (ii) State of West Bengal & Anr. v. West Bengal Registration Copywriters Association and Anr .; (2009) 14 SCC 132, (iii) Nihal Singh & Ors. v. State of Punjab & Ors ; (2013) 10 Scale 162 18. Mr. Ashok Gupta, in addition, argued that the impugned direction to treat the employees of the school as that of NALCO, amended to giving them the status of public employment which was impermissible inasmuch as the procedure for recruitment by NALCO for its own staff was JUDGMENT entirely different. Further, whether the agreement entered into with SVS is a camouflage an aspect which could not have been gone into in writ proceedings under Article 226 of the Constitution. He also argued that impugned direction of the High Court would discourage the corporate sector, private or public, to take up welfare measures for its employees and would be counter productive to the principle of corporate 18 Page 18 Civil Appeal No.5989 of 2008 good governance, which is now mandatorily provided under new Companies Act, enacted by the Parliament in the year 2013.

Counsel appearing for the employees of the schools defended the judgment of the High Court and the directions contained therein. He referred to all those documents and provisions as per which NALCO had been exercising effective control in functioning of these schools. These features have already been mentioned above. Thrust of his submission was that even when there was cloak of Managing Committee, apparently running the show, it was only a subterfuge, when examined in the light of the aforesaid documents reflecting JUDGMENT that the real control was that of NALCO which was pulling the strings. Apart from highlighting that the schools were established by NALCO which remain the property of NALCO, it is even providing entire infrastructure as well as full financial support on continuous basis. Further the schools were established for the benefit of the children of NALCO’s employees. He also referred to various documents, which are 19 Page 19 Civil Appeal No.5989 of 2008 taken note of by the High Court as well, to buttress his submission that the actual decision making authority from the stage of recruitment process to that of termination of these

“(i) Though the appointments are made by the Managing Committees of the School, selection process of appointment is controlled by NALCO which has financial say in the matter. (ii) Appointments are made on the recommendation of the Selection Committee of which authorities of NALCO are the members. (iii) President of the Managing Committee is JUDGMENT the General Manager of NALCO. Likewise Chief Manager/DGM (Personnel Administration) is member of the Managing Committee who takes care of personnel managing of the Managing Committee. Financial affairs of the Schools are controlled by DGM (Finance) of NALCO as a member of the Managing Committees. In this 20 Page 20 Civil Appeal No.5989 of 2008 way administrative and financial control is exercised by NALCO. (iv) Entire expenses incurred for running of the

(Finance), NALCO including the expenses with regard to the salary, Provident Fund, medical reimbursement, Leave Travel Concession, festival advance, increments etc. (v) Teaching and non-teaching staff of the schools also enjoyed the facilities of Consumer Cooperative Society by NALCO as well as NALCO Hospital, like any other employees of NALCO. (vi) Budgetary provisions for the school are JUDGMENT made by the NALCO authorities every year. NALCO appoints auditors to audit the accounts of the schools. NALCO has provided residential quarters to the teaching and non-teaching staff of the school in the NALCO Township at par of the employees of the NALCO. 21 Page 21 Civil Appeal No.5989 of 2008 (vii) Documents show that day to day grievances of the staff of different schools and other issues are addressed by NALCO Authorities.” 20. Mr. Venugopal submitted that in a matter like this, where one has to examine as to who may be the employer of the employees of the school, there were three possibilities namely NALCO, Siksha Samiti or Managing Committee. He argued that so far as the Managing Committee is concerned, it is not having any legal entity of its own. Moreover as soon as the agreement between NALCO and SVS comes to an end, these Managing Committees would disappear. Therefore, such a body cannot be the employer. JUDGMENT Likewise, in so far as the SVS is concerned, it was only an agency for running the school and would go away after the expiry or termination of the agreement. Therefore, it would follow that NALCO is the real employer which fact stands established from the manner in which NALCO is exercising deep and pervasive control. 22 Page 22 Civil Appeal No.5989 of 2008 21. We have considered the aforesaid submissions with reference to the record of this case. No doubt, the school is established by NALCO. NALCO is also

expenses from the tuition fee and other incomes received by the schools, is met by NALCO. NALCO has also placed staff quarters at the disposal of the schools which are allotted to the employees of the schools. Employees of the school are also accorded some other benefits like recreation club facilities etc. However, the poser is as to whether these features are sufficient to make the staff of the schools as employees of NALCO. JUDGMENT 22. In order to determine the existence of employer - employee relationship, the correct approach would be to consider as to whether there is complete control and supervision of the NALCO. It was so held by this Court in Chemical Works Limited (supra) way back in the year 1957. The court emphasised that the relationship of master and servant is a question of fact and that depends upon the 23 Page 23 Civil Appeal No.5989 of 2008 existence of power in the employer, not only to direct what work the servant is to do but also the manner in which the work is to be done. This was so explained by formulating the following principle:- “The principle which emerges from these authorities is that the prima facie test for the determination of the relationship between master and servant is the existence of the right in the master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work, or to borrow the words of Lord Uthwatt at Page 23 in Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool) Ltd., and Another, “The proper test is whether or not the hirer had authority to control the manner of execution of the act in question.” 23. It has been established from the JUDGMENT documents on record that both the schools have their own independent Managing Committees. These Managing Committees are registered under the Societies Registration Act. It is these Managing Committees who not only recruit teaching and other staff and appoint them, but all other decisions in respect of their service conditions are also taken by the Managing Committees. These range from pay fixation, 24 Page 24 Civil Appeal No.5989 of 2008 seniority, grant of leave, promotion, disciplinary action, retirement, termination etc. In fact, even Service Rules, 1995 have been framed which contain the provisions; delineating

Managing Committees, disciplinary action is taken by the Managing Committees, pay fixation and promotion orders are passed by the Managing Committees and even orders of superannuation and termination of the staff are issued by the Managing Committees. It, thus, becomes clear that day to day control over the staff is that of the Managing Committees. These Managing Committees are having statutory status as they are registered under the Societies Registration Act. Therefore, Mr. Venugopal is not right in his JUDGMENT submission that Managing Committees do not have their own independent legal entities. 24. Merely because the schools are set up by NALCO or they have agreed to take care of the financial deficits for the running of the schools, according to us, are not the conclusive factors. Such aspects have been considered by 25 Page 25 Civil Appeal No.5989 of 2008 this Court in various cases. In the case of RBI (Supra), question was as to whether workers of the canteens which were established and even financed by the RBI, were the

were established in the Bank's premises for the benefit of its employees. The Bank was reimbursing the charges incurred in getting various statutory licenses. Even prior permission of the RBI was required to increase the strength of the employees. Holding that these canteen workers were not the employees of RBI, the court observed: “10. The Bank does not supervise or control the working of the canteens or the supply of eatables to employees. The employees are not under an obligation to purchase eatables from the canteen. There is no relationship of master and servant between the Bank and the various persons employed in the canteens aforesaid. The Bank does not carry any trade or business in the canteens. The staff canteens are established only as a welfare measure. Similar demands made by the staff canteen employees and the request made to the Central Government to refer the dispute for adjudication was rejected by the Central Government and the challenge against the same before the Calcutta High Court was unsuccessful. According to the Bank, it has no statutory or other obligation to run the canteens and it has no direct control or JUDGMENT 26 Page 26 Civil Appeal No.5989 of 2008

25. The court noticed that the Implementation Committee (Canteen Committee) which was running the canteen consisted of certain members, three out of which were nominated by the Bank. This was held to be a non-determinative factor. Following discussion on this aspect is also material and, therefore we extract the same hereunder: JUDGMENT “Moreover, there is no right in the Bank to supervise and control the work done by the persons employed in the Committee nor has the Bank any right to direct the manner in which the work shall be done by various persons. The Bank has absolutely no right to take any disciplinary action or to direct any canteen employee to do a particular work. Even according to the Tribunal, the Bank exercises only a 'remote control'.” 27 Page 27 Civil Appeal No.5989 of 2008 26. In the present case, as pointed out above, the day to day supervision and control vests with the Managing Committee, from the appointment till

commenting that real control vests with NALCO. Though we would come to this aspect a little later, it is necessary to point out at this stage that whether the arrangement/ contract is sham or camouflage is a disputed question of fact. In the present case writ petitions were filed and it is not a case where industrial disputes were raised by these employees. 27. In the case of Workmen of Nilgiri JUDGMENT Cooperative Marketing Societies Ltd. (Supra) the entire law was re-visited. The Court emphasised that no hard and fast rule can be laid down nor it is possible to do so. Likewise no single test – be it control test, be it organisational or any other test – has been held to be the determinative factor for determining the jural relationship of employer and employee. The Court enumerated the relevant factors, which are to be 28 Page 28 Civil Appeal No.5989 of 2008 examined in such cases, in Paras 37 and 38 which reads as under:-

38. With a view to find out reasonable solution in a problematic case of this nature, what is needed is an integrated approach meaning thereby integration of the relevant tests wherefor it may be necessary to examine as to whether the workman concerned was fully integrated into the employer's concern meaning thereby independent of the concern although attached therewith to some extent.” In the facts of that case, where the court found that the portress and gridders who were claiming themselves to be the employees of Nilgiri Cooperative Marketing Society, were not its employees as the said society was neither maintaining any attendance register or wage register or fixing working hours or had issued appointment letters to them.” JUDGMENT 28. More significant case, having close proximity with the present one is the judgment in SC Chandra 29 Page 29 Civil Appeal No.5989 of 2008 & Ors. v. State of Jharkhand and Ors. 2007 (8) SCC 279 . In that case Hindustan Copper Limited (HCL), the Government of India enterprise, had established a school. Employees of that

object of benefiting children of the workers of the HCL. Even the financial assistance was provided to the schools. The Court however, came to the conclusion that only by giving financial assistance the HCL did not become the employer of teachers and staff working in the school. They were held to be the employees of the Managing Committee of the school. That apart of the discussion which has direct bearing on the present case runs as follows:- JUDGMENT “8. We have heard learned counsel for the parties and perused the records. The basic question before us is whether a writ of mandamus could be issued against the management of HCL. The learned Single Judge relying on the Division Bench in an identical matter pertaining to Bharat Cooking Coal Limited dismissed the writ petition of the appellants. This issue was examined in an analogous writ petition and in the aforesaid case, this issue was extensively considered as to whether the management of the school is the direct responsibility of HCL or not. After considering the matter in detail, the learned Single Judge relying on the aforesaid judgment 30 Page 30 Civil Appeal No.5989 of 2008

JUDGMENT 29. From the reading of Para 20 in that judgment it can be discerned that the Managing Committee which was managing the school was treated as an 31 Page 31 Civil Appeal No.5989 of 2008 independent body. This case is relevant on the second aspect as well viz. the claim of school employees predicate upon the financial burden that is assured by NALCO. To that aspect we

30. No doubt, there may be some element of control of NALCO because of the reason that its officials are nominated to the Managing Committees of the schools. Such provisions are made to ensure that schools runs smoothly and properly by the society. It also becomes necessary to ensure that the money is appropriately spent. However, this kind of 'remote control' would not make NALCO as the employer of these workers. This only shows that since NALCO is shouldering and meeting the financial deficits, it wants to ensure that money JUDGMENT is spent for rightful purposes. 31. It was argued that the Managing Committee cannot be the employer as it would lose its identity on the termination of agreement between NALCO and SVS. However, even that by itself cannot be the determinative factor. When the agreement was earlier entered into between NALCO and CCMT, and staff was 32 Page 32 Civil Appeal No.5989 of 2008 appointed in the school by CCMT, NALCO ensured that such staff is taken over by SVS. For this purpose a specific clause is provided in agreement between NALCO and SVS which reads as under: “That if any of the parties hereto at any time wishes to terminate this arrangement, it may do so on giving of least six months prior notice in writing to the other party, of such an intention, provided that such termination shall be effective only at the close of the academic session. Provided further that in the event of such termination, the services of the staff employed by the school shall, subject to any agreement to the contrary between the two parties hereto, be terminated in accordance with the terms of their appointment in the Chinmaya Vidyalaya, Damanjodi.” 32. Only because SVS agreed to take over the employees, would not mean that NALCO becomes the employer. On the JUDGMENT contrary, this clause suggests that but for the intervention of NALCO, the school staff that was engaged by CCMT would have been dealt with by CCMT. It is a matter of record that CCMT runs other schools as well. In that eventuality it would have taken these employees with themselves or retrench these employees in accordance with law. Same is the position of SVS who have other schools also. However, this kind of 33 Page 33 Civil Appeal No.5989 of 2008 situation is not going to arise in the present case. We place on record the assurance given by the learned Senior Counsels appearing for NALCO that the teaching and other staff of the

management is taken over by some other agency for running the schools. We direct that NALCO shall stand committed by this assurance and would adhere to the same for all times to come. The position which emerges, in view of the aforesaid assurance, is that the service tenure of these employees is protected. 33. In so far as their service conditions are concerned, as already conceded by even the respondents themselves, their JUDGMENT salaries and other perks which they are getting are better than their counter parts in Government schools or aided/ un- aided recognised schools in the State of Orissa. In a situation like this even if, for the sake of argument, it is presumed that NALCO is the employer of these employees, they would not be entitled to the pay scales which are given to other employees of NALCO as there cannot be any comparison 34 Page 34 Civil Appeal No.5989 of 2008 between the two. The principle of ‘equal pay for equal work’ is not attracted at all. Those employees directly employed by NALCO are discharging altogether different kinds of duties.

units. The process and method of recruitment of those employees, their eligibility conditions for appointment, nature of job done by those employees etc. is entirely different from the employees of these schools. This aspect is squarely dealt with in the case of SC Chandra & Ors. (supra) where the plea for parity in employment was rejected thereby refusing to give parity in salary claim by school teachers with class working under Government of Jharkhand and BCCL. The discussion which ensued, while rejecting such a claim, is JUDGMENT recapitulated hereunder in the majority opinion authored by A.K. Mathur, J.: “20. After going through the order of the Division Bench we are of opinion that the view taken by the Division Bench of the High Court is correct. Firstly, the school is not being managed by BCCL as from the facts it is more than clear that BCCL was only extending financial assistance from time to time. By that it cannot be saddled with the liability to pay these teachers of the 35 Page 35 Civil Appeal No.5989 of 2008

21. Learned counsel for the appellants have relied on Article 39(d) of the Constitution. Article 39(d) does not mean that all the teachers working in the school should be equated with the clerks in BCCL or the Government of Jharkhand for application of the principle of equal pay for equal work. There should be total identity between both groups i.e. the teachers of the school on the one hand and the clerks in BCCL, and as such the teachers cannot be educated with the clerks of the State Government or of BCCL. The question of application of Article 39(d) of the Constitution has recently been interpreted by this Court in State of Haryana v. Charanjit Singh wherein Their Lordships have put the entire controversy to rest and held that the principle, 'equal pay for equal work' must satisfy the test that the incumbents are performing equal and identical work as discharged by employees against whom the equal pay is claimed. Their Lordships have reviewed all the cases bearing on the subject and after a detailed discussion have finally put the controversy to rest that the persons who claimed the parity should satisfy the court that the conditions are identical and equal and same duties are being discharged by them. Though a number of cases were cited for our consideration but no useful purpose will be served as in Charanjit Singh all these cases have been reviewed by this Court. More so, JUDGMENT 36 Page 36 Civil Appeal No.5989 of 2008 when we have already held that the appellants are not the employees of BCCL, there is no question seeking any parity of the pay with that of the clerks of BCCL.”

“24. The principle of equal pay for equal work was propounded by this Court in certain decisions in the 1980s e.g. Dhirendra Chamoli v. State of U.P., Surinder Singh v. Engineer-in-Chief, CPWD, Randhir Singh v. Union of India, etc. This was done by applying Articles 14 and 39(d) of the Constitution. Thus, in Dhirendra Chamoli case this Court granted to the casual, daily rated employees the same pay scale as regular employees. 25. It appears that subsequently it was realised that the application of the principle of equal pay for equal work was creating havoc. All over India different groups were claiming parity in pay with other groups e.g. Government employees of one State were claiming parity with Government employees of another State. JUDGMENT 26. Fixation of pay scale is a delicate mechanism which requires various considerations including financial capacity, responsibility, educational qualification, mode of appointment, etc. and it has a cascading effect. Hence, in subsequent decisions of this Court the principle of equal pay for equal work has been considerably watered down, and it has hardly ever been applied by this court in recent years. 27. Thus, in State of Haryanan v. Tilak 37 Page 37 Civil Appeal No.5989 of 2008

28. In State of Haryana v. Charanjit Singh discussing a large number of earlier decisions it was held by a three Judge Bench of this Court that the principle of equal pay for equal work cannot apply unless there is complete and wholesale identity between the two groups. Moreover, even for finding out whether there is complete and wholesale identity, the proper forum is an expert body and not the writ court, as this requires extensive evidence. A mechanical interpretation of the principle of equal pay for equal work creates great practical difficulties. Hence in recent decisions the Supreme Court has considerably watered down the principle of equal pay for equal work and this principle has hardly been ever applied in recent decisions.” JUDGMENT 34. We say at the cost of repetition that there is no parity in the nature of work, mode of appointment, experience, educational qualifications between the NALCO 38 Page 38 Civil Appeal No.5989 of 2008 employees and the employees of the two schools. In fact, such a comparison can be made with their counter parts in the Government schools and/or aided or unaided schools. On

service conditions. 35. We thus, are of the opinion that the impugned judgment of the High Court is un-sustainable. Allowing these appeals, the judgment of the High Court is hereby set aside. There shall, however, be no order as to costs. …..................................J. [Surinder Singh Nijjar] JUDGMENT …..................................J. [A.K. Sikri] New Delhi May 8, 2014 39 Page 39