IMPORTANT POINT
Employees of URCs are not government servants.

ARIJIT PASAYAT, J.

( 1 ) DOUBTING correctness of the view of this Court in Union of India v. Mohd. Aslam (2001 (1) SCC 720) reference has been made to a three-Judge bench and that is how these appeals are before this Bench. The controversy lies within a very narrow compass.

( 2 ) THE issue is as to the status of an employee of Unit Run Canteen in armed Forces. While admitting Civil Appeal No. 3495/2005 the matter was referred to a larger Bench as noted above and other cases were tagged with civil Appeal No. 3495 of 2005. We shall deal with the factual scenario in civil Appeal No. 3495 of 2005 and after deciding the legal issues involved, apply the decision to the other appeals.

( 3 ) APPELLANT Shri R. R. Pillai was recruited as Airman in the Indian Air force on 7. 10. 1967 and was discharged from service on 31. 10. 1988 as Junior warrant Officer as he sought for premature retirement from service. Before his discharge he had been looking after the affairs of the Unit-Run-Canteen (in short the 'urc' ). After discharge he was engaged as Manager of URC at southern Air Command on an honorarium of Rs. 1,000/-P. M. w. e. f 1. 2. 1989. Para 6 of the appointment letter clearly stated that the appointment was governed by the terms and conditions as laid down in Air HQ letter no. 20728/p/org dated 31st January, 1984 issued under the relevant regulations. The terms and conditions of service of canteen employees are covered by the rules called "the Rules regulating the Terms and Conditions of Service of' Civilian Employees of Air Force Unit Run Canteen paid out of Non Public Funds".

( 4 ) ACCORDING to the appellant the view taken in Mohd Aslam's case (supra) is the correct view, it is stated that even if Canteen Store Department (in short the 'csd') was not the source of funding, other parameters clearly cover the employees in question of Government service.

( 5 ) REFERENCE is made to certain decisions to support the stand, e. g. , Kona prabhakara Rao v. M. Seshagiri Rao and Anr. (1982 (1) SCC 442 (para 9)and Satrucharla Chandrasekhar Raju v. Vyricherla Pradeep Kumar Dev and anr. (1992 (4) SCC 404 at 412 ). Even if full funding is not there partial funding by quality discount is there which is the test for determining as to which employee is a government servant. Reference is also made to certain subsequent decisions in which Aslam's case (supra) has been referred to. It is pointed out that on the date the OAs were decided, Aslam's case (supra)was applicable and therefore de facto doctrine would apply. In any event, it is stated that Rule 24 cannot take out the benefits in the manner done. The high Court had not considered the challenge to Rule 24. It is pointed out that the decision which has been given can only be re-considered for compelling reasons and the view taken in Aslam's case (supra) is a possible view. In any event, the appointing body is an instrumentality of State and, therefore, Articles 14 and 16 of the Constitution of India, 1950 (in short the 'constitution') are applicable. With reference to Section 23 of the Indian contract Act, 1923 (in short the 'contract Act') it is stated that Section 23 of the Contract Act clearly prohibits the appointments in the manner done.

( 6 ) LEARNED counsel for the Union on the other hand submitted that aslam's case (supra) proceeded on erroneous factual basis. It proceeded on the basis as if the canteen or the establishment in question was funded by the csd. The issue is not whether it is an instrumentality of the State. Issue is whether the concerned employees are government employees. It is submitted that Union of India and Anr. v. Chote Lal (1999 (1) SCC 554) clearly applies to the facts of the case.

( 7 ) IT is submitted that unit run canteen is amenable to Shops and commercial Establishments Statutes because the appointment cannot be made dehors the Rules. There is no prescribed qualification or age limit. Similarly there is no grade or cadre. Therefore, it cannot be said that the conce