H.H. Kantharia, J.
1. In this writ petition under Article 227 of the Constitution, the eight petitioners-workmen (hereinafter referred to as 'the petitioners') challenged the judgment and order dated March 23, 1982 passed by the third respondent-Labour Judge, presiding over the Six Labour Court, Bombay, dismissing their complaint of unfair labour practice covered by Item 1(a), (b) and (d) of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as 'the MRTU & PULP Act').
2. The case of the petitioners is that respondent No. 1, M/s. Indo French Time Industries Limited, is an incorporated company. They appointed respondent No. 2, Sanjiva Shetty, as a canteen contractor in their factory premises. The petitioners joined a trade union known as 'Suburban General Workers Union' and submitted a charter of demands dated October 19, 1979 on both respondent No. 1 and respondent No. 2 for revision of wage scales and improvement in the other service conditions on account of which respondent Nos. 1 and 2 started harassing them and threatened them with dire consequences. It is also the case of the petitioners that both respondent Nos. 1 and 2 refused to consider the charter of demands and on the contrary terminated the services of the petitioners, along with some others, with effect from December 22, 1979. It is the contention of the petitioners that they were the employees of the first respondent who with a view to discourage and curb their legitimate trade union activities terminated the services of the petitioners by removing the second respondent.
3. The petitioners, therefore, filed complaint (ULP) No. 18 of 1980 in the Court of the third respondent-Labour Judge under Item 1 of Schedule IV of the MRTU & PULP Act. The first respondent resisted the complaint and it was their case in the written statement that the petitioners were not their employees and that the second respondent contractor terminated their services for which the first respondent was not liable. It appears that the second respondent did not even file the written statement and did not appear in the Labour Court to contest the complaint of the petitioners. On behalf of the petitioners, petitioner No. 2 gave evidence in support of the complaint whereas on behalf of the first respondent, Satish Shiva Marathe, Personnel Manager was examined. The petitioners also relied upon some documentary evidence in the nature of letters dated 4.11.1979, 22.12.1979 and 24.12.1979.
4. On considering of the evidence adduced before him, the third respondent by his impugned judgment and order dismissed the complaint of the petitioners holding that there was no relationship of employer and employees between the petitioners-workmen on one hand and the first respondent-company on the other and hence this writ petition.
5. Now, it is to be seen that before filing the complaint of unfair labour practice, on behalf of the petitioners, a letter dated November 4, 1979 (Exhibit E to the petition) was addressed to the first respondent-company putting it on record that complaints were received from, the members of the union representing the petitioners that the canteen contractor had orally threatened them to break their legs if they were to continue the membership of union. It was pointed out in this letter to the first respondent that as the principal employer, it was their bounden duty to protect the interest of the canteen workmen and that they should see that respondent No. 2 desists from such unfair labour practice. Thereafter, on December 22, 1979 the President of Suburban General Workers Union wrote another letter to the first respondent- company stating that they had already appointed a new contractor who would take charge on 22.12.1979 on account of which the existing canteen employees will be thrown out of employment for which the first respondent would be held responsible as the principal employer under Section 46 of the Factories Act, 1948. Again, on December 24, 1979, the President of the Suburban General Workers Union addressed a letter to both the first respondent and the second respondent that a new contractor was appointed in place of the second respondent from 21.12.1979 and all the canteen workmen were forcibly removed along with their belonging on 22nd December, 1979 without notice and that the first respondent, as principal employer, was duty bound for all the legal dues of the canteen workmen and that a complaint of unfair labour practice was filed in their behalf in the 8th Labour Court, Bombay. It is important to note that neither the first respondent nor the second respondent responded to any of these three letters which clearly pointed out to the guilt of the first respondent, being the principal employer, as responsible for the unlawful termination of services of the petitioners.
6. Then the evidence of Narayan Shetty examined on behalf of the petitioners shows that the canteen in question belonged to the first respondent and all the utensils, furnitures and other articles in the canteen were owned by the first respondent-company. His evidence further shows that the canteen committee was looking after the affairs of the canteen and that the company's cashier used to hand over the amount of salary to the canteen manager who used to pay the same to the canteen workmen. The canteen used to cater to the need of 800 employees working in the factory of the first respondent in two shifts. Narayan Shetty also deposed in terms of his union making a charter of demands on respondent Nos. 1 and 2 for which the Government Labour Officer had initiated proceedings where the first and the second respondent did not even appear. His evidence thereafter shows that the Labour Officer of the company asked him to leave the union and if not done he would be dismissed. Lastly, Narayan Shetty deposed that his services along with others were terminated from December 22, 1979 without notice and without payment of legal dues by the canteen manager. This workman was subjected to cross-examination by the learned counsel appearing on behalf of the first respondent but I find no material brought on the record to shake his credibility. The evidence of Satish Shiva Marathe, Personnel Manager, examined on behalf of the first respondent-company shows that earlier one Telang was running the canteen and as the workmen were not happy with him, his services were terminated and prior to Telang the second respondent was running the canteen and at present it was one C.K. Shetty who was running the canteen in the factory of the first respondent-company. Satish Marathe deposed to the effect that the second respondent's contract was terminated in December, 1979 because of financial difficulties.
7. This evidence given by Satish Marathe in the examination-in-chief does not help the first respondent-company in any manner and on the contrary it clearly shows that the first respondent-company was running the canteen as per their whims and fancies by appointing different contractors. However, the admission given by Satish Marathe in the cross-examination supports the case of the petitioners inasmuch as he stated that the canteen belongs to the first respondent-company and the same is located in the factory premises where 700 workmen worked. The furnitures, crockeries, utensils and other articles used in the canteen belonged to the first respondent-company. The rates of food articles are fixed by the first respondent and that the canteen was provided and maintained by the first respondent-company as per the provisions of the Factories Act. This evidence, therefore, shows that the canteen in question was a statutory canteen as provided in Section 46 of the Factories Act, 1948 which envisages that the State Government may make Rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers and Rule 79 of the Maharashtra Factories Rules, 1963 provides that the occupier of every factory wherein more than 250 workers are ordinarily employed and which is specified by the State Government by a Notification in this behalf shall provide, in or near the factory, an adequate canteen according to the standards prescribed in the Rules and that the canteen shall be available for the use of the workers, within six months from the date of such notification. The evidence of Narayan Shetty and Satish Marathe also clearly shows that the canteen in question was an integral part of the factory of the first respondent-company and that being so, the petitioners would be the employees of the first respondent-company and, therefore, the learned Labour Judge was not correct in coming to a conclusion that there was no relationship of employer and employees between the first respondent-company on one hand and the petitioners of the other.
8. While dealing with a similar question, a Division Bench of the Allahabad High Court in Indian Explosive Limited v. State of U.P. and Ors. 1981 1 LLJ 423 held :
'Admittedly the petitioner-company is running its factory wherein more than 20 persons are employed. Under Section 46 of the Factories Act, 1948 the petitioner-company is under statutory obligation to provide facility of canteen for its workmen employed in its factory. The canteen in question is being maintained by the petitioner-company in pursuance of the statutory requirement of Section 46 of the Factories Act. The canteen is an integral part of the factory and the employees working therein are engaged in connection with and for the purpose of industry run by the petitioner-company. Maintenance of canteen in the factory premises is incidental to the main industrial operation of the petitioner-company. Therefore, those employed in the canteen would fall within the definition of employees. If an owner of an industry executed any work in the course of running an industry through a contractor, the owner of such industry would be the employer of the workmen employed by such contractor'.
For coming to such a conclusion, the Allahabad High Court had referred to and relied upon a ruling of the Supreme Court in Samstipur Mills v. Ram Lal : (1973)IILLJ130SC in which case the company running the industry was maintaining canteen for its employees through the agency of a Cooperative Society. Those employed in the canteen claimed that they were employees of the mill and as such entitled to the same emoluments and benefits which were being given to other employees of the mill. A similar objection assessed in the present petition was raised and it was asserted that there was no relationship of employer and employee between the persons employed in the canteen and the company. The Supreme Court held that since the mill was maintaining the canteen for its employees the workmen employed therein would be the workmen of the mill. Mr. Ramaswami, learned counsel appearing on behalf of the first respondent-company submitted that the ruling of the Allahabad High Court is not relevant to the facts and circumstances of our case as the Allahabad High Court as also the Supreme Court in case of Samstipur Mills were dealing with the provisions of the U.P. Industrial Disputes Act, 1947. I find no substance in the submission of Mr. Ramaswami for the simple reason that the relationship of employer and employee stands created between the first respondent-company and the petitioners from the very inception in view of the provisions of Section 46 of the Factories Act, 1948 read with Rule 79 of the Maharashtra Factories Rules, 1963.
9. Then while dealing with an identical issue in case of M.M.R. Khan and Ors. v. Union of India and Ors., : [1990]1SCR687 it was pointed out by the Supreme Court that 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 established pursuant to the said provision there is no difficulty in holding that the canteens 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'. Mr. Ramaswami on behalf of the first respondent-company urged that the facts of the case before the Supreme Court show that the control, management and supervision was by the principal employer i.e. the Railway Administration which is not the case in the petition before us but there is no merit in the argument of Mr. Ramaswami as the evidence adduced on behalf of the petitioners as also on behalf of the first respondent-company, as discussed above, shows that the control, management and supervision of the canteen in our case was by the principal employer i.e. the first respondent-company.
10. Mr. Ramaswami then pointed out Clause 7 of the agreement entered into between the first and the second respondents on March 29, 1978 and submitted that under the said agreement it was the duty of the second respondent to keep adequate number of servants at the premises and such servants would be considered as the employees of the second respondent who should give to the first respondent a list of the employees with names and photographs to enable the first respondent to regulate their entry on the premises and that the removal of such employees would be immediately notified to the first respondent which all goes to show, according to Mr. Ramaswami, that the petitioners were the direct employees of the second respondent and not of the first respondent. The answer to Mr. Ramaswami's submission can be very well had from a judgment of the Supreme Court in Hussainbhai v. The Alath Factory Tozhilali Union and Ors. (1978) 2 LLJ, 397 as under :
'The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the 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 industry, the local conditions and the like, may be resorted to when labour legislation casts welfare obligations on the real employer, 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 way of legal appearances'.
11. Lastly, Mr. Ramaswami brought to my notice a ruling of the Madras High Court in Workmen Employed in Ashok Leyland Ltd. and Ashok Leyland Co- operative Canteen Ltd., Madras (represented by Secretary, Madras State General Industries and Commercial Employees Union) Madras v. Ashok Leyland Ltd. and Ors. : (1991)IILLJ12Mad and submitted that though the occupier of a factory is bound to provide and maintain canteen under Section 46 of the Factories Act, with regard to and for discharge of that obligation he need not necessarily become employer. I am afraid, this ruling of the Madras High Court will not go to the rescue of Mr. Ramaswami because it is entirely based on the interpretation of Tamil Nadu Factories Rules, 1950 and the facts and circumstances of the said case. Mr. Ramaswami also relied upon a judgment of a single Judge (Dudhat, J. of this Court in General Labour Union (Red Flag), Bombay v. KM. Desai and Ors.1990 II LLJ 215 and submitted that in a case where the workmen were employed in a canteen run by the Company through the contractor for the benefit of the employees, the company would not be the employer of the canteen workmen. Once again, this judgment may also not help Mr. Ramaswami inasmuch as my learned brother Mr. Justice Dudhat in the said case was mainly concerned with interpreting the provisions of Sections 7 and 12 of the Contract Labour (Regulation and Abolition) Act, 1970 in which process he happened to make such observations once again depending upon the facts and circumstances of the case before him.
12. In this view of the matter, the conclusion is irresistible and inevitable that the learned Labour Judge (third respondent) was not correct in law in coming to the conclusion that there was no relationship of employer and employees between the petitioners and the First respondent-company and dismissing the unfair labour practice complaint of the petitioners by his impugned judgment and order. The grave error of law which the learned Labour Judge committed which if not corrected would totally miscarry justice. The mistake committed by the learned Labour Judge, therefore, requires rectification in order to prevent injustice and to promote justice. The impugned judgment and order passed by the learned Labour Judge, therefore, are quashed and set aside. It is accordingly held that the first respondent- company indulged in committing unfair labour practice covered by Item 1 of the Schedule IV of the MRTU & PULP Act in terminating the services of the petitioners as stated hereinabove. They are directed to cease and desist from further indulging in such unfair labour practice and they shall reinstate the petitioners in their original position with continuity of service effective from the date of the termination on December 22, 1979. What follows from such a finding now arrived at is that the petitioners should also be granted full back wages for the period of their enforced and unwilling unemployment. However, in this particular case I am not inclined to grant full backwages to the petitioners as ft has been pointed out to me that the first respondent- company is a sick unit and is facing a financial crisis. In that background. I am inclined to grant 50 per cent back wages to the petitioners. In other words, the first respondent-company is hereby directed and ordered to reinstate the petitioners in their original position with continuity of service and payment of 50 per cent of their back wages.
13. In the result, the writ petition succeeds and the same is allowed. Rule is made absolute in the terms aforesaid with cost quantified as Rs. 8,000/- for eight workmen.