Hindustan Insecticides Ltd. v. General Secretary, HIL Canteen Employees Union (CITU), General Secretary, HIL Canteen Employees Organisation (BMS), General Secretary, HIL Canteen Workers Congress (INTUC), HIL Consumer Store Limited, and Industrial Tribunal, Alappuzha

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE** **MONDAY, THE 11TH DAY OF JUNE 2018 / 21ST JYAISHTA, 1940** **WP(C).No. 345 of 2005** ## **PETITIONER(S)** **------------** **HINDUSTAN INSECTICIDES LTD, UDYOGAMANDAL, ERNAKULAM, REP. BY ITS GENERAL MANAGER, MR.SIVADAS SHENOY.** **BY ADVS.SRI.P.BENNY THOMAS SRI.D.PREM KAMATH** **RESPONDENT(S):** **-------------** **1. THE GENERAL SECRETARY, HIL CANTEEN EMPLOYEES UNION(CITU),, UDYOGAMANDAL, ERNAKULAM.** **2. THE GENERAL SECRETARY, HIL CANTEEN EMPLOYEES ORGANISATION (BMS),, UDYOGAMANDAL, ERNAKULAM.** **3. THE GENERAL SECRETARY, HIL CANTEEN WORKERS CONGRESS (INTUC), UDYOGAMANDAL,, ERNAKULAM.** 4. **THE HIL CONSUMER STORE LIMITED.** - **UDYOGAMANDAL.** **5. INDUSTRIAL TRIBUNAL, ALAPUZHA.** **R1 TO R3 BY ADVS. SRI.C.ANIL KUMAR** **SRI.PRATAP ABRAHAM VARGHESE SRI.P.RAMAKRISHNAN R4 BY ADV. SRI.R.SANJITH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-06-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **TS** **WP(C).No. 345 of 2005** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **-----------------------** **EXHIBIT P1 TRUE COPY OF AWARD PASSED BY THE 5TH RESPONDENT DATED 7.9.2004.** - **EXHIBIT P2 TRUE COPY OF CLAIM STATEMENT FILED BY THE 1ST RESPONDENT IN I.D.77/99 BEFORE THE 5TH RESPONDENT DATED 10.1.2000.** - **EXHIBIT P3 TRUE COPY OF WRITTEN STATEMENT FILED BY THE PETITIONER BEFORE THE 5[TH] RESPONDENT IN MAY 2000.** - **EXHIBIT P4 TRUE COY OF WRITTEN STATEMENT FILED BY THE 4[TH] RESPONDENT BEFORE THE 5[TH] RESPONDENT DATED 2.2.2001.** **RESPONDENT(S)'EXHIBITS** **----------------------** **EXHIBIT R1(A) TRUE COY OF THE LETTER DATED 1.4.2003 SUBMITTED BY THE 1ST RESPONDENT BEFORE THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, ERNAKULAM.** **EXHIBIT R1(B) TRUE COPY OF THE LETTER NO.C.S.2122/2003 DATED 4.7.2003 ISSUED BY THE JOINT REGISTRAR(GENERAL) CO-OPERATIVE SOCIETIES,ERNAKULAM.** **EXHIBIT R1(C) TRUE COPY OF THE LETTER DATED 1.11.2010 SUBMITTED BY THE PETITIONER BEFORE THE ASSISTANT LABOUR COMMISSIONER(CENTRAL)ERNAKULAM.** **/TRUE COPY/** **PS TO JUDGE** **TS 19.07.2018** **A. MUHAMED MUSTAQUE, J.** ......................................... W.P.(C).No.345 of 2005 …......................................... Dated this the 11[th] day of June, 2018. ## **JUDGMENT** The petitioner, a public sector undertaking of the Government of India, runs a statutory canteen to cater to the requirements of its employees. This canteen is run by a Co-operative Society, the 4[th] respondent. The Co-operative Society was promoted by the employees. It appears that, before the formation of the Society, the canteen had been run by the contractors. As per the bye laws of the Society, the Board of Directors would also comprise a nominee of the management Company of the petitioner. It appears that the management have also provided infrastructure to run the canteen. The employees of the Society raised an industrial dispute claiming absorption to the permanent cadre of the petitioner Company. The dispute, that was referred for adjudication by the Industrial Tribunal was as follows: _“1. Whether the canteen workers of M/s. Hindustan Insecticides Ltd., are eligible for regularization or departmentalization as workers of HIL, since the management has statutory obligation to run the canteen?_ _2. If not, what alternate remedy does the canteen workers have?”_ 2. The reference was answered holding that the employees working under the Society are entitled for absorption as permanent employees of the petitioner Company. This award is under challenge 2 W.P.(C).No.345 of 2005 in this writ petition. 3. Heard learned counsel appearing for the petitioner as well as learned counsel for the Union. 4. The question that arises is whether the Industrial Tribunal is justified under law to hold that the workers were liable to be absorbed to the service of the petitioner Company. The jurisdiction of the Industrial Tribunal to pass such an award relatable to the unfair labour practices as referred under Section 2(k) of the Industrial Dispute Act. The Industrial Tribunal, therefore, has to find precisely, the existence of any unfair labour practices on the part of the employer. In labour jurisprudence, unfair labour practice is understood as the deprivation of a legitimate claim of employees by an employer, which he is otherwise entitled to claim. Unfair labour practices under the industrial dispute are illustrated under 5[th] schedule by an exhaustive reference to various practice on the part of the employer. It is appropriate to refer Clause 10 of 5[th] Schedule of the Industrial Disputes Act, which reads thus: _“To employ workmen as ”badlis”, casuals or temporaries and and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen.”_ 5. Therefore mere nexus of the petitioner Company with the Society to fulfil a statutory obligation itself will not result in such practices. In order to prove such practices, the Tribunal had to find out the nature of engagement and whether such an engagement 3 W.P.(C).No.345 of 2005 would deprive an employee, the status of a permanent workman. The emphasis was given in Clause 10 in relation to the deprivation of the status and the privileges of permanent workman. One cannot gloss over those aspects while determining the nature of relationship. In a constitutionally bound country like India, there is no restrain for the formation of an entity to carry out the trade and business including by legal entities. Assuming that the Society itself was promoted by the employer, the petitioner herein, it cannot be viewed that such formation itself was with an intention to deprive the status and privileges of the employees under the Society. It is in this background, the case in hand will have to be examined. 6. Admittedly, the Society was registered under the Kerala Cooperative Societies Act, 1969. The Co-operative Society so formed under the Act is under the control of the machinaries set up under the Act and the staff pattern of the Society will have to be in accordance with the Act. The salaries, wages etc will have to be in accordance with the Act. It also envisages the payment of pension under the Co-operative Societies Employees Pension Scheme. The Society, therefore, will have to function in accordance with the mandate of the Co-operative Societies Act. Though the Co-operative Society is an autonomous body not being treated as an instrument of the State, nevertheless, State interference can be seen at all levels of functioning of the Society to ensure that the society functions in W.P.(C).No.345 of 2005 4 accordance with the statutory provisions. The welfare of the employees has to be protected through provisions of the Cooperative Societies Act. The conditions of service of the employees are secured through the statutory provisions. 7. Apart from above, court cannot also shut its eyes, to the fact that satisfaction to be entered by the machineries under the Cooperative Societies Act, as to the formation of such Society and the stamp of approval given to such a Society under the Co-operative Socialites Act. It is appropriate to refer in this context to a judgement of the Hon'ble Supreme Court in _**Union of India [Railway Board] and others v. J.V. Subhaiah and others**_ (1996 (2) SCC 258) wherein in paragraphs 17 and 18 it was held as follows: _“17. It is seen that service conditions of the employees, officers and servants of the Stores/Societies are not regulated by the Railway Administration. They are governed by the byelaws of the Societies subject to control and sanction by the Registrar under the State Act or the relevant provisions. There is no obligation on the part of the Railway Administration to provide security for those employees. The disciplinary control by the Society concerned is subject to other laws and is exclusively domestic in character. The Indian Railway Establishment Code is not applicable to them. Their appointment is subject to bond prescribed by the Registrar. The arrears of funds or misappropriated amounts etc. are recoverable under the provisions of the State Act and the Rules made thereunder. The services of the staff are liable to termination in terms of the State Act, Rules and bye-laws._ _18. In other words, there is a dual control over the staff by the Society and the Registrar. In that behalf, the Railway Administration has no role to play. If the subsidy is considered to be a controlling factor and the societies/Stores s an intervening agency or veil between the Railway Administration and the employees, the same principle would equally be extendible to the staff, teachers, professors appointed in private educational institutions receiving aid from the appropriate State/CEntral Government to claim the status of government employees. Equally, other employees appointed in_ 5 W.P.(C).No.345 of 2005 _other Cooperative Sores/Societies organised by appropriate Government would also be entitled to the same status as government servants. Appointment to a post or an office under the State is regulated under the statutory rules either by direct recruitment or appointment by promotion from lower ladder to higher service or appointment by transfer in accordance with the procedure prescribed and the qualifications specified. Any appointment otherwise would be vertical transplantation into services dehors the rules. Appointment through those institutions becomes gateway for back-door entry into government service and would be contrary to the prescribed qualifications and other conditions and recruitment by Public Service Commission or appropriate agencies. As contended, if the employees of the societies like cooperative canteens are declared to be Railway servants, there would arise dual control over them by the Registrar and Railway Administration but the same was not brought to the attention of the Court when M.M.R. Khan case was decided.”_ 8. A Division Bench of this Court recently in a similar challenge in W.P.(C).No.29022 of 2006 also referred to _**Balwant Rai Saluja and another v. Air India Ltd. and others (2014 (9) SCC 407)**_ and set aside similar award passed by the Tribunal. 9. Learned counsel appearing for the 1[st] respondent Union heavily placed reliance on Ext.R1(c) and argued that the petitioner Company deploys its own workers to the Society and, therefore, the petitioner cannot disown the relationship with the Society. In fact, this argument is in a similar line to the findings made in the impugned award. The Industrial Tribunal was of the view that the Society is running the canteen on behalf of the Company and the petitioner Company incurs expenses for running such a canteen. This Court is of the considered view that the Tribunal misdirected itself as to the enquiry that contemplated under the Industrial Dispute Act. The paramount consideration adverted as above must be in regard to 6 W.P.(C).No.345 of 2005 the deprivation of privileges and the status of a permanent workman. If such workmen are given privileges and the status of a permanent employee with all benefits under the Co-operative Societies Act, it cannot be said that such Society was formed to deprive such status and privileges. If any of the employees are denied of any of the benefits which they are entitled under the Cooperative Societies Act, they can very well approach the machineries under the Act. Learned counsel appearing for the Union argued that many of the employees were not given the actual benefits which they are entitled under the Co-operative Societies Act and therefore, it can be easily found out that the formation itself was for the purpose of deprivation. The Co-operative Societies Act protect the interest and welfare of an employee if not it can be enforced through machineries of the aforesaid Act. When interest of the employees is legally protected dehors contract can it be said that there exists 'unfair labour practices'? Therefore, this Court is of the view that if the employees have been denied the benefits and they are entitled for such benefits, they are free to approach such machineries under the Co-operative Societies Act. Thus in conclusion, this Court is of the view that the Industrial Tribunal is misdirected in making the findings by placing reliance on wrong premises without adjudicating the real question involved as to the deprivation of status and privileges of workmen W.P.(C).No.345 of 2005 7 and benefits which they are entitled otherwise as a permanent workmen. In the facts and circumstances, the Industrial Tribunal could not have decided the existence of unlabour practice on the part of the petitioner. Therefore, the writ petition is only to be allowed. Accordingly, the writ petition is allowed and the impugned award is set aside. Sd/- **A. MUHAMED MUSTAQUE,** **JUDGE.** cl