Important point
The question as to whether the employees of the canteen are employees of the State or whether their services should be directed to be regularized or not, would be dependent upon the issues as to whether the canteens are required to be made in terms of the provisions of a statute or otherwise.

Headnote:Labour Law—Canteen Employees of Karnataka Secretariat Departmental Canteen—Claim of status of Government servant—Canteen being run by State Government for the benefit of secretariat employees—74 employees working therein having completed more than 10 years of service—Association of employees of Karnataka Government Secretariat Departmental Canteen filed a writ petition alleging that they were in effect and substance the employees of the State Government itself, although they were termed as ‘employees of the canteen’—Prayer for grant of scale of pay and other service benefits applicable to Government servants—Single Judge of the High Court allowing their writ petition held that canteen can be equated to the Government Hospitality Organization where the canteen facilities are made available—Appellants were directed to implement the notification dated 22.6.1996 which was applicable in relation to Government Hospitality Organization, as far as possible to the said canteen employees—Appeals filed by State Government—Division Bench of the High Court disposed of appeals modifying judgment of Single Judge as regard date of regularization of their services as also payment of back wages—Whether judgments of the High Court are sustainable—(No).
       Held : The canteen was being run by private contractors for a long time. In the year 1974, the State of Karnataka intended to run the canteen by a committee, consisting of ten persons, six of them representing the Government and the remaining four representing the Association as mentioned in order bearing No. GAD 106 DBM dated 19th November, 1974. Amenities and facilities, e.g., premises, furniture, cooking utensils, crockery, cutlery etc. for running the canteen were to be provided by the State only for a period of one year. (Para 12)
       The State by reason thereof, thus, made a provision for grant of Rs. 25,000/-. In terms of the said scheme, all the furniture and equipments which were handed over to the committee were required to be accounted for and returned to the Government upon the closure of the canteen. The employees were appointed, indisputably, by the committee on an ad hoc basis/daily wages. (Para 13)
       It, furthermore, appears that the Government had sanctioned grant in aid from time to time. The management of the said canteen was handed over to the Respondent Association. Constitution of the Managing Committee was being changed on a regular basis. (Para14)
       In an affidavit filed before us, it is stated that the Karnataka Government Secretariat Employees Association which was running the canteen from 04.08.2000 to 31.03.2003 by a letter dated 10.03.2003, expressed its inability to run the canteen beyond 31.03.2003 and, thus, the canteen services were closed from 01.04.2003. It is further stated that the State Government demolished the main canteen building pursuant to the Government Note dated 04.08.2003. Certain litigations had thereafter been initiated before several authorities. A writ petition had also been filed by the Association before the High Court, which was marked as Writ Petition No. 41207 of 2004 seeking direction to make the balance payment of LIC premium and contribution towards EPF for the period from 01.01.2003 to 31.03.2003. This Court evidently is not concerned with the pending litigation but we have noticed the said fact only for the purpose of showing that the State intended to run the canteen departmentally through a committee, but according to the State, the committee has a distinct and different existence or different entity than the Government. (Paras 16 and 17)
       The fact situation obtaining in this case already suggests that the State had no intention to run and maintain the canteen as a department. Had the intention of the State been to run the said canteen as one of its departments, the question of giving any grant or for that matter making of a provision for return of the furniture and equipments would not have arisen. (Para18)
       The question as to whether the employees of the canteen are employees of the State or whether their services should be directed to be regularized or not, in view of several decisions of this Court would be dependent upon the issues as to whether the canteens are required to be made in terms of the provisions of a statute or otherwise. Admittedly, the State had no statutory compulsion to run and maintain any canteen for its employees. (Para 19)
       The High Court was, thus, not correct in holding that the members of the First Respondent could be treated at par with the Hospitality Organization of the State of Karnataka. Such equation is impermissible in law. In the Hospitality Organization of the State, the posts might have been sanctioned. Only because, food is prepared and served, the same would not mean that a canteen run by a Committee can be equated thereto.
       Subsequent Event
       Subsequent events which had taken place is also worth taking note of. The fact remains that the canteen now is closed. The judgment and order of the High Court, thus, otherwise also cannot be implemented. The employees concerned, therefore, cannot be directed to be reinstated in service. We have noticed, hereinbefore, that other proceedings have been initiated by them. The said proceedings may be disposed of in accordance with law. (Paras 51 and 52)

Judgment

S.B. Sinha, J.—Both the State of Karnataka and K.G.S.D. Canteen Employees Welfare Association are in appeal before us aggrieved by and dissatisfied with the judgments and orders dated 29.05.2002 and 30.05.2002 passed by a Division Bench of the Karnataka High Court in Writ Appeal Nos. 5690-5692 of 2000 and 4613-32 of 2000.

Writ Proceedings

2. The First Respondent herein is an Association of the employees of the Karnataka Government Secretariat Departmental Canteen. The Respondent Nos. 2 and 3 are its members. They filed a writ petition before the Karnataka High Court, inter alia, contending that the said canteen having been run by the State Government for the benefit of the secretariat employees and 74 employees working therein having completed more than 10 years of service were in effect and substance the employees of the State Government itself, although they were termed as ‘employees of the canteen’. Further contention of the respondents herein was that their wages were absolutely meagre being little more than the minimum wages, but despite several representations made by them, they were not paid the same salary as was payable to the employees of the State who were similarly situated.

3. The Appellant herein rejected their request for grant of scale of pay and other service benefits applicable to the Government servants, inter alia, on the premise that they were not its employees.

High Court

4. A learned Single Judge of the High Court opined that the canteen can be equated to the Government Hospitality Organization where the canteen facilities are made available and consequently directed the Appellant to implement the notification dated 22.6.1996 which was applicable in relation to the Government Hospitality Organization, as far as possible to the said canteen employees with such revisions as are permissible under law as on the said date.

5. The learned Single Judge opining that the employees of the canteen are employees of the State Government directed :

"The second prayer of the petitioners is to declare them as Government Servants. In this regard I deem it proper to modify the relief by issuing a direction to the Government to regularize the services of the petitioners in the following manner :

Government is directed to regularize the services of such of those petitioners who have put in ten years of service subject to the Government satisfaction of qualification if any for the post held by them and keeping in view the long services rendered by them.

It is declared that the petitioners are the employees of the Government and are entitled for pay parity as per Annexure-O with revision from time to time.

The petitioners have approached this Court in the year 1996 and the petition is heard and disposed of in the year 2000. Petitioners have been provided some increase in the wages from time to time. In these circumstances, I deem it proper that the petitioners are not to be given any arrears for the past period and the direction is to with effect from 1.1.2000 and not for the earlier period. The arrears from 1.1.2000 is to be made available to the petitioners within three months from the date of receipt of this order."

6. Appeals having been preferred by the State thereagainst, a Division Bench of the High Court disposed of the appeals modifying the judgment of the learned Single Judge as regard the date of regularization of their services as also payment of back wages, directing:

"(i) The effective date from which the pay-scales and other service benefits should be extended to the employees of KGSD Canteen by regularizing their service is changed from 01.01.2000 to 29.05.2002."

7. The learned Single Judge as also the Division Bench despite the fact that the Appellant herein had denied and disputed the relationship of employer and employee between it and the employees of the canteen, proceeded to determine the said question on the basis of various documents produced before it.

Present Appeals

8. The State of Karnataka has filed Civi

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2006 Supreme(SC) 4

Cases Referred (20)