IMPORTANT POINT
Factors determinative of employer-employee relationship discussed.

JUDGMENT

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 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.

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 such, with consequential prayer that these employees be also accorded suitable pay scales as admissible to the 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 outcome of which is the judgment dated 21st 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 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: 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 Bhubaneswar, Orissa. NALCO is engaged in manufacture and production of Alumina and Aluminium. It has its 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 given admissions. It also provided necessary infrastructure, such as land, building, furniture, library, laboratory equipments and other assets. The said schools admittedly are unaided private schools. On 15th 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 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 Rs.10,000/- per annum to CCMT as donation towards the supervision charges for each school.

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 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, 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 community, preference is to be given to the children of the employees of the NALCO. Apart from constructing the building and providing requ