STEEL AUTHORITY OF INDIA LTD. v. I. RAMENAYYA — 1996 DIGILAW 404 (MP)

JUDGMENT S.K. Kulshrestha, J. This appeal has been filed under Clause 10 of the Letters Patent against the order dated 12-12-1995 of the learned Single Judge of this Court passed in M. P. No. 204/92. Some of the Societies which were respondents in the said petition have also filed Letters Patent Appeal No. 209/95 feeling aggrieved by the very same order. This judgment shall, therefore, govern the disposal of L.P.A No. 209/95 as well. The appellant No. 1, Bhilai Steel Plant is a cluster of 53 departments or shops where each such shops is separately registered as a factory under the Factories Act, 1948 under a separate licence. Out of these shops 25 employ workers exceeding 250 in number of which list has been appended to the memo of appeal as Annexure P.2. Yet there are 17 other such departments employing less than 250 workers which have non-statutory canteens of which list his been furnished as Annexure P.3. Some canteens are located within the works premises while some are outside the premises. A list of the canteens is also appended. It is not disputed that these canteens whether statutory or non-statutory are being managed by societies registered under the M. P. Co-operative Societies Act having their approved bye-laws which include the power to appoint and dismiss the employees of the societies. The canteens are managed through the instrumentality of these societies though, according to the Appellants, they are run by them in accordance with the M. P. Factories Rules, 1962 as independent bodies. Reference has been made by the Appellants to the registered bye-laws of the societies particularly to bye-law 23 providing for the meeting of the general body, bye-law 28, providing for the constitution of the managing committee of the society, bye-law 33, prescribing functions of the managing committee with particular reference to Clause 22 thereof with regard to the preparation of the estimates of canteens run by the individual society in support of the claim that the persons engaged by these societies were, at all times, treated to be the employees of their respective society and on several occasions, revision of pay of these employees had also been arrived at between the employees and the societies concerned and burden of payment to them had always been shouldered by the societies. It was only after the decision of the Apex Court in M.M.R. Khan and others etc. Vs. It was only after the decision of the Apex Court in M.M.R. Khan and others etc. Vs. Union of India and others, etc., that a wave trigerred in them to lay a claim to their being the employees of the Appellant No. 1 and to seek parity with the employees of the said Appellant. The Respondents Nos. 1 to 43 are the original Petitioners. According to the case of the Respondents, they were the workers within the meaning of Section 2(1) of the Act notwithstanding that the canteens were managed and controlled by the co-operative societies in accordance with the provision made in the M. P. Factories Rules. According to the case set up by the Respondents, each such canteen though had a separate managing committee consisting of members elected according to the bye-laws but real control and supervision vested in the manager of each factory and these managing committees were headed by the President nominated by the Bhilai Steel Plant. The Chairman of the societies were also nominees of the management of the Plant. The workers in the canteen were being paid consolidated fixed pay which was even less than half the minimum pay of the employees working in the Bhilai Steel Plant. These Respondents, therefore, claimed that they could not be deprived of the pay scales and other service benefits as that of the workers of the BSP merely because the factories were running their canteens through the management entrusted to the societies. They, therefore, sought mandamus against the present Appellants to treat the canteen workers as the workers of the Appellant No. 1 and to pay to them the salary and other emoluments applicable to the workers of the Appellant. The learned Single Judge after hearing the parties and going through the various decisions relied upon by the parties, came to the conclusion that these workers were in fact the workers of the BSP and were entitled to the same service conditions as the workers of this plant, and allowed the petition with costs. It is against this order, these two appeals have been filed. Some of the societies which were not joined as parties in the said petition, have also been permitted to intervene and their counsel has also been heard in the matter. Section 46 of the Factories Act, 1948 reads as under: Canteens. It is against this order, these two appeals have been filed. Some of the societies which were not joined as parties in the said petition, have also been permitted to intervene and their counsel has also been heard in the matter. Section 46 of the Factories Act, 1948 reads as under: Canteens. - (i) 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. (2) Without prejudice to the generality of the foregoing power, such rules may provide for: (a) the date by which such canteen shall be provided; (b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen; (c) the foodstuffs to be served therein and the charges which may be made therefor; (d) the construction of a managing committee for the canteen and representation of the workers in the management of the canteen; (dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuffs and which shall be borne by the employer; (e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the power to make rules under Clause (c). Referring to the said section, the learned Counsel for the Appellant has contended that the said section does not create any obligation but merely empowers the State Government to make rules requiring that any specified factory which ordinarily employs more than 250 workers, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers. It is, therefore, according to the learned Counsel, the Rules framed by the State Government which have to construed to find out as to what is the nature of the requirement and on whom the obligation lies. The State Government has framed Rules entitled "Madhya Pradesh Factories Rules, 1962" and the Rules relevant for the purpose of this decision are the ones framed u/s 46 of the Factories Act, Rules 77 to 82. These Rules read as under: Canteens. - (1) Rules 77 to 82 shall come into force on such date in respect of any factory as the State Government may notify in the official Gazette in this behalf. These Rules read as under: Canteens. - (1) Rules 77 to 82 shall come into force on such date in respect of any factory as the State Government may notify in the official Gazette in this behalf. (2) The occupier of every factory notified by the State Government, in this behalf and wherein more than two hundred and fifty workers are ordinarily employed shall be provided in or near the factory an adequate canteen according to the standards prescribed in these rules. (3) The manager of the factory shall submit, for the approval of the Chief Inspector, plans and site plan, in duplicate, of the building to be constructed or adapted for use as a canteen. (4) The canteen building shall be situated not less than fifty feet from any latrine, urinal, boiler house, coal stocks, ash dump and any other source of dust, smoke, obnoxious fumes, or nuisance: Provided that the Chief Inspector may, in any particular factory, relax the provisions of this sub-rule to such extent as may be reasonable in the circumstances and may require measures to be adopted to secure the essential purpose of this sub-rule. (5) The canteen building shall be constructed in accordance with the plans approved by the Chief Inspector, and shall accommodate at least a dining hall, kitchen, storeroom, pantry and washing-places separately for workers and for utensils. (6) In a canteen the floor and inside walls up to a height of four feet from the floor shall be made of smooth and impervious materials; the remaining portion of the inside walls shall be made smooth by cement plaster or in any other manner approved by the Chief Inspector. (7) The doors and windows of a canteen building shall be of fly-proof construction, and shall allow adequate ventilation. (8) The canteen shall be sufficiently lighted at all times when any person have access to it. (7) The doors and windows of a canteen building shall be of fly-proof construction, and shall allow adequate ventilation. (8) The canteen shall be sufficiently lighted at all times when any person have access to it. (9) (a) In every canteen - (i) all inside walls of rooms and all ceilings and passages and staircases shall be lime-washed or colour-washed at least once in each year or painted once in three years, dating from the period when last lime-washed, or painted, as the case may be; (ii) all wood work shall be varnished or painted once in three years, dating from the period when last varnished or painted; (iii) all internal structural iron or steel-work be varnished or painted once in three years, dating from the period when last varnished or painted provided that the inside walls of the kitchen shall be lime-washed once every four months. (b) Records of dates on which lime-washing, colour-washing, varnishing or painting is carried out shall be maintained in the prescribed register (Form No. 7). (10) The precincts of the canteen shall be maintained in a clean and sanitary condition. Waste water shall be carried away in suitably covered drains, and shall not be allowed to accumulate so as to cause a nuisance. Suitable arrangements shall be made for the collection and disposal of garbage. 77-A(1) Annual medical examination for fitness of each member of the canteen staff who handles foodstuffs shall be carried out by the Factory Medical Officer or the Certifying Surgeon in the following manner, namely:- (i) blood shall be examined for veneral disease, namely, syphilis, and Gonorrhea in addition to routine blood examination; (ii) stool and urine examination shall be done for worms infection; (iii) skin disease, such as scabies, dermatitis shall be thoroughly seen; (iv) X-Ray and other examination shall be done to detect tuberculosis. (2) Any person, who in the opinion of the Factory Medical Officer or the Certifying Surgeon, is unsuitable for employment, on account of possible risk to the health of other shall not be employed as a member of canteen staff. Dinning hall. - (1) The dinning hall shall accommodate at a time at least 30% of the workers working at a time: Provided that, in any particular factory or in any particular class of factories, the State Government may, by a notification in this behalf after the percentage of workers to be accommodated. Dinning hall. - (1) The dinning hall shall accommodate at a time at least 30% of the workers working at a time: Provided that, in any particular factory or in any particular class of factories, the State Government may, by a notification in this behalf after the percentage of workers to be accommodated. (2) The floor area of the dining-hall, excluding the area occupied by the service counter and any furniture, except tables and chairs, shall be not less than 10 sq.ft. per dinner to be accommodated as prescribed in Sub-rule (1). (3) A portion of the dining-hall and service counter shall be partitioned of and reserved for women workers in proportion to their number. Washing places for women shall be separate and screened to secure privacy. (4) Sufficient tables, chairs or benches, shall be available for the number of diners to be accommodated as prescribed in Sub-rule (1). Equipment, - (1) There shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for the efficient running of the canteen. Suitable clean clothes for the employee serving in the canteen shall also be provided and maintained. (2) The furniture, utensils and other equipments shall be maintained in a clean and hygienic condition. A service counter, if provided, shall have a top smooth and impervious material. Suitable facilities including an adequate supply of hot water shall be provided for the cleaning of utensils and equipment. (3) Food and food-materials shall be stored in fly-proof almirah and handled with the help of wooden laddies or suitable metal forceps, whichever is convenient. Vessels once used should be scaled before being used again. Prices to be charged. - (1) Food, drink and other items served in the canteen shall be sold on a non-profit basis, and the prices charged shall be subject to the approval of the canteen managing committee. (1-a). Vessels once used should be scaled before being used again. Prices to be charged. - (1) Food, drink and other items served in the canteen shall be sold on a non-profit basis, and the prices charged shall be subject to the approval of the canteen managing committee. (1-a). In computing the prices referred to in Sub-rule (1) the following items of expenditure shall not be taken into consideration but will be borne by the occupier: (a) The rent for the land and building; (b) The depreciation and maintenance charges of the building and equipment provided for the canteen; (c) The cost of purchase, repairs and replacement of equipment including furniture, crockery, cutlery and utensils; (d) The water charges and expenses for providing lighting and ventilation; (e) The interest on the amount spent on the provision and maintenance of the building, furniture and equipment provided for the canteen; (f) The cost of fuel required for cooking food stuffs of water; and (g) The wages of the employees serving in the canteen and the cost of uniforms, if any, provided to them. (2) The charge per portion of food stuffs, beverages and any other item served in the canteen shall be conspicuously displayed in the canteen. (3) Where the canteen is managed by a co-operative society the charge to be made for the food-stuffs served may be allowed to include a profit up to 5% on its working capital employed in running the canteen; subject to following conditions: (a) The co-operative society shall have been registered under Madhya Pradesh Co-operative Societies Act, 1960, and at best one-half of its share capital shall have been subscribed by the workmen of the factory. (b) If the society engages in any business other than the canteen also separate accounts of the canteen shall be maintained. (c) The manager of the factory shall nevertheless be responsible for providing free cost land, building, furniture and equipment as well as electricity wherever available in the factory. (d) The canteen shall be subject to inspection and control under this Act as it would have been if not managed by the co-operative society, and if the Chief Inspector of Factories is of opinion that the canteen is not being managed properly by the society he may, by three months notice, require the society to withdraw from its management and require the manager of factory to manage it himself. Accounts. Accounts. - (1) All books of accounts, register and any other documents used in connection with the running of the canteen shall be produced on demand to an Inspector of Factories. (2) The accounts pertaining to the canteen shall be audited once every twelve months, by registered accountants and auditors. The balance-sheet prepared by the said auditors shall be submitted to the canteen managing committee not later than two months after the closing of the audited accounts. Provided that the accounts pertaining to the canteens in a Government Factory, having its own accounts department, may be audited in such department. Provided further that where the canteen is managed by workers co-operative society under the Madhya Pradesh Co-operative Societies Act, 1960, the accounts pertaining to such canteens may be audited in accordance with the provisions of that Act. Managing Committee. - (1) The Manager shall appoint in canteen managing committee which shall be consulted from time to time as to - (a) the quality and quantity of food-stuffs to be served in the canteen; (b) the arrangement of the menus; (c) times of meals in the canteen; and (d) any other matter as may be directed by the committee. Provided that when the canteen is managed by a co-operative society as mentioned in Rule 80(3) it shall not be necessary to appoint a Canteen Managing Committee. (2) The canteen managing committee shall consist of an equal number of persons nominated by the occupier and elected by the workers. The number to elected workers shall be in the proportion of 1 for every 1,000 workers employed in the factory provided that in no case shall there be more than 5 or less than 2 workers on the committee. Provided that where in any factory there exists a Representative Union of the employees as provided in Madhya Pradesh Industrial Relations Act, 1960 it shall have a right to nominate on the Canteen Managing Committee representative of employees instead of the election. (3) The manager shall determine and supervise the procedure for elections to the canteen managing committee. (4) A canteen managing committee shall be dissolved by the manager two years after the last election, no account, being taken of a bye election. In M.M.R. Khan v. Union of India (supra), their Lordships have observed that the employees in the statutory canteens of the railways will have to be treated as railway servants. (4) A canteen managing committee shall be dissolved by the manager two years after the last election, no account, being taken of a bye election. In M.M.R. Khan v. Union of India (supra), their Lordships have observed that the employees in the statutory canteens of the railways will have to be treated as railway servants. The relationship of employer and employee stands created between the Railway Administration and the canteen employees from the very inception. Since in terms of the rules made by the State Government u/s 46 of the Factories Act, it is obligatory on the Railway Administration to provide a canteen and statutory railway canteen established pursuant to the said provisions are incidental to or connected with the manufacturing process, the provision of the canteen is deemed by the statute as a necessary concomitant of the manufacturing activity. In construing paragraph 2832 of the Railway Manual, their Lordships have held that Railway Administration may employ anyone such as a staff Committee or a Co-operative Society for the management of the canteens, the legal responsibility for the proper management rests not with such agency but solely with the Railway Administration. In the circumstances, even where the employees were appointed by the Staff Committee or Co-operative Society, it was held that their appointment is made by the department through the agency of the Committee or the society, as the case may be. Considering the provisions made in the Railway Manual, it was further held that there was no difference between the employees of statutory canteens and also non-statutory recognised canteens and the employees of the two were treated for all purposes as railway servants. Mr. G.M. Chaphekar, learned senior counsel appearing for the Appellant has, however, submitted that the decision in the said case turned on its own facts and was based on the construction of the railway manual and other instructions issued in this behalf regulating the statutory and non-statutory recognized canteens. Referring to the paragraph 29 of the said judgment, Mr. Chaphekar contended that the benefit was extended in the light of the circulars only to the recognised non-statutory railway canteens. It was clear that on the interpretation of the provision made in the railway manual that it was concluded that the employees of these canteens were in reality, the railway servants notwithstanding that they had been appointed by the Staff Committee or the Co-operative Society. It was clear that on the interpretation of the provision made in the railway manual that it was concluded that the employees of these canteens were in reality, the railway servants notwithstanding that they had been appointed by the Staff Committee or the Co-operative Society. Referring to paragraph 11 of the said judgment, learned Counsel submitted that the Railway Manual itself created certain regulations in cases where the management of the canteen was through the Co-operative Society but overall control vested in the railway administration. The chapter relating to the departmental canteens directed that the workers in the non-statutory departmental and co-operative canteens will be paid the pay and allowances at the same rate on which the employees of the statutory canteens are paid and would be amendable to disciplinary control under the same set of rules. The argument, however, ignores the fact that the obligation is created by Section 46 of the Act in relation to the statutory canteens as would be clear from the following passage of the said judgment: Since in terms of the Rules made by the State Governments u/s 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. Paragraph 2829 of the Railway Establishment Manual recognises the obligation on the Railway Administration created by the Act and as pointed out earlier paragraph 2834 makes provision for meeting the cost of the canteens. Paragraph 2832 acknowledges that although the Railway Administration may employ anyone such as a Staff Committee or a Co-operative Society for the management of the canteens, the legal responsibility for the proper management rests not with such agency but solely with the Railway Administration. If the management of the canteen is handed over to a consumer cooperative society the bye-laws of such society have to be amended suitably to provide for an overall control by the Railway Administration. If the management of the canteen is handed over to a consumer cooperative society the bye-laws of such society have to be amended suitably to provide for an overall control by the Railway Administration. In fact as has been pointed out earlier the Administrative Instructions on departmental canteens in terms state that even those canteens which are not governed by the said Act have to be under a complete administrative control of the concerned Department and the recruitment, service conditions and the disciplinary proceedings to be taken against the employees have to be taken according to the rules made in that behalf by the said Department. In the circumstances, even where the employees are appointed by the Staff Committee/Co-operative Society it will have to be held that their appointment is made by the Department through the agency of the Committee/Society as the case may be. In addition, as stated earlier, the Railway Board by its circular dated June 8, 1981 had communicated that it was decided to treat the employees of all statutory canteens, as railway servants irrespective of the type and management of the canteens, and to extend to them the conditions of service and emoluments of the Railway servants as existed on October 21, 1980, w.e.f. 22nd October, 1980. No doubt it was stated in this letter that the said decision would prevail till Government decided otherwise. Subsequently, on March 11, 1982, the Board also prescribed the pay scales, dearness allowance, house rent allowance, city compensatory allowance and productivity bonus, and fixed the age of their superannuation. As also pointed out earlier, this Court in its decision reported in Kanpur Suraksha Karamchari Union (Regd.) Vs. Union of India (UOI) and Others, , subsequently directed that for the purpose of calculating pensionary benefits the service rendered by the said employees prior to October 22, 1980 would be computed. What is further, the Ministry of Railways by its letter of May 13, 1983 placed on record the fact that not only the employees of all statutory canteens but the employees of eleven Delhi based non-statutory canteens had been treated as railway servants with effect from October 22, 1980. What is further, the Ministry of Railways by its letter of May 13, 1983 placed on record the fact that not only the employees of all statutory canteens but the employees of eleven Delhi based non-statutory canteens had been treated as railway servants with effect from October 22, 1980. It must be remembered in this connection that neither the Railway Ministry nor the Railway Board had stated in their letters/orders that the employees of the statutory canteens and of the eleven Delhi based non-statutory canteens were being treated as railway servants only for the purpose of the Factories Act or that they were not to be so treated till further decision of this Court. It is possible to place liberal construction on these letters/orders and interpret the relevant direction namely, "till further directions from the Government" as being the directions after the decision of this Court in the present matters, and for the sake of argument we may proceed on that basis while dealing with the present contention. The admitted facts, however, are that these canteens have been in existence at their respective places continuously for a number of years. The premises as well as the entire paraphernalia for the canteens is provided by the Railway Administration and belong to it. The employees engaged in the canteens have also been in service uninterruptedly for many years. Their wages are reimbursed in full by the Rly. Administration. The entire running of the canteens including the work of the employee is subject to the supervision and control of the agency of the Railway Administration whether the agency is the staff-committee or the society. In fact, as stated by the Rly. Administration in its Establishment Manual the legal responsibility for running the canteen ultimately rests with it, whatever the agency that may intervene. The number and the category of the staff engaged in the canteen is strictly controlled by the Administration. As has been pointed out earlier, much before the order of this Court dated October 22, 1980, the employees of the departmental canteens/tiffin rooms were declared as holders of civil posts under the Government of India Notification No. 6(2)/23/77-Welfare dated December 11, 1979 which notification is an annexurc-4 to the Administrative Instructions referred to above. As has been pointed out earlier, much before the order of this Court dated October 22, 1980, the employees of the departmental canteens/tiffin rooms were declared as holders of civil posts under the Government of India Notification No. 6(2)/23/77-Welfare dated December 11, 1979 which notification is an annexurc-4 to the Administrative Instructions referred to above. That notification stated that all posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and accordingly, present and future incumbents of such posts would qualify as holders of civil posts under the Central Government. The notification further stated that necessary rules governing the conditions of service of the employees would be framed under proviso to Article 309 of the Constitution to have retrospective effect from October 1, 1979. Accordingly, the service rules were framed under Article 309 as per the Notification No. CSR-54 issued by the Government of India, Department of Personnel and Training on December 23, 1980. These rules contained both the recruitment rules and conditions of service of the said employees including the procedure for disciplinary action to be taken against them. As stated earlier the Administrative Instructions are applicable to the canteens/tiffin room run by all the Ministries including the Railway Ministry unless they had previously decided to be exempt from them and had framed their own rules in that behalf. On behalf of the Respondents, one Shri Sud, Joint Director of Establishment, Ministry of Railways has filed an affidavit contending that section F of Chapter XXVIII of the Railway Establishment Manual (to the relevant paragraph of which we have made a reference earlier) contains the necessary instructions for running the canteens and hence the Railway Administration should be deemed to have been exempted from the operation of the said Administrative Instructions. Although there is nothing expressly on record to show that the railway canteens are exempted from the said Instructions, we will proceed on the assumption that they are so exempted by virtue of the relevant provisions of the Railway Manual. But the fact remains that there are as yet no notifications on the lines of December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens. But the fact remains that there are as yet no notifications on the lines of December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens. Whatever the difference in the nature of work performed by the other staff in the different Ministries, it cannot be argued that there is any difference in the work performed by the employees in the canteens run in the establishments of the Ministries. Hence, we are of the view that if the said two notifications are applicable to the employees in the canteens run by the other departments of the Government of India, there is no reason why the same should not apply also to the employees in the canteens run by the Railways. On behalf of the Railway Administration no material has been placed before us to treat the employees in their canteens as a class separate from the employees in the canteens run by the other departments of the Government. In the circumstances, it would be highly discriminatory not to apply the said two notifications to the employees in the Railway canteens. It would be violative of Articles 14 and 16 of the Constitution. We are, therefore, of the view that the employees in the statutory canteens of the Railways will have to be treated as Railway servants. Thus, the relationship of employer and employee stands created between the Railway Administration and the canteen employees from the very inception. Hence, it cannot be gainsaid that for the purpose of the Factories Act the employees in the statutory canteens are the employees of the Railways. The decisions of the Calcutta and Madras High Courts (supra) on the point, therefore, are both proper and valid. However, attention was invited to the decision of the Supreme Court in Surendra Prasad Kungsal Vs. M.M.T. Corpn. of India and another, in which it was held that the decision in M.M.R. Khan's case was decided on facts of the said case including the railway manual, notification and circulars issued by the Railway Board from time to time and other documents which pertained to the workers employed in the said canteens. In view of the disputed facts, Delhi Administration was directed to refer industrial dispute between the Mazdur Sabha and the Respondent-National Small Industries Corporation. In view of the disputed facts, Delhi Administration was directed to refer industrial dispute between the Mazdur Sabha and the Respondent-National Small Industries Corporation. In Surendra Prasad Khugsal's case (supra) the facts were disputed and the case was filed on behalf of the workers employed in non-statutory canteens. It is, thus, clear that in relation to the statutory canteens, the decision in M.M.R. Khan's case was not distinguished on the ground that the said decision turned on its own facts. The obligation cast on the occupier by the M. P. Rules is couched in the same language as Section 46 of the Act. Rule 77 requires the occupier of every factory notified by the State Government wherein more than 250 workers are ordinarily employed to provide adequate canteen according to the standard prescribed in these Rules. The manager of the factory is under obligation to submit plans and site plans of the building to be constructed for the approval of the Chief Inspector. The said obligation does not admit of its transfer to another agency and continues to be that of the occupier and none else. It is, thus, clear that once Section 46 is construed to mean that the activity of the canteen is incidental to or connected with the manufacturing process, the employee, even if appointed by the Staff Committee or Co-operative Society, it has to be held that they are employees of the factory through agency of the Committee or the Society. The obligation created by Rule 77 being no different, there is no difficulty in holding that the employees of such statutory canteens of the factories are the employees of the factories and not of the individual societies. The fact that Rule 77 of the State Rules attaches the obligation on the occupier and the Rule 77(A) requires the factory Medical Officer to periodically examine the fitness of each of the canteen staff further supports the view that the members of the canteen staff are the employees of the factory concerned and their nature of employment does not change on account of their having been employed by the societies entrusted with the management of the canteens. The learned Counsel for the Appellant has referred to Section 80 captioned "Prices to be charged" and has pointed out that the State Rules permit running of the canteens through co-operative societies subject to conditions laid down in Sub-rule (3) of Rule 80 and therefore, any worker engaged in the canteens, statutory or otherwise, by the society would be the employee of the society and not of the factory. The argument ignores the basic facts; one, that it is only for the purpose of fixation of price to be charged for food and other items served in the canteens that the provision for profit of 5% on the working capital employed by a society in running the canteen has been made and secondly, the State Rule permits management of the canteens through the societies and not running of the canteens by the said society. It is, thus, clear that management can be entrusted to the co-operative society and in such cases under the proviso to Rule 82(1), it is not necessary to appoint any canteen committee. The Rules do not permit transfer of the statutory obligation to the co-operative society nor the co-operative societies managing their canteens step into the shoes of the occupier. The obligation of the occupier continues in terms of Rule 77 and 77-A and even in cases of mismanagement by such co-operative societies, the Chief Inspector of Factories can require the manager of the factory to manage the canteens himself and withdraw the management from the society. It is, thus, clear that the co-operative society can be permitted to manage the canteen and even in such cases, the salary and other charges have to be borne by the occupier. Mr. Sapre, learned Counsel, appearing in L. P. A. No. 209 has supported arguments of Mr. Chaphekar, learned senior advocate, and has added that under Bye-law 23 of the Cooperative Society, the relationship of master and servant exists between the co-operative society and the employee concerned and since the Petitioner-employees are the employees of the society by which they were appointed are under the control of the said society, their claim of being the employees of the factory was preposterous. Mr. Mr. Kale, learned Counsel appearing for the intervenor also supports the argument and has further submitted that the Petitioners are the employees of the society and the relationship of master and servant between the society and the Petitioners is not affected merely on account of the fact that the salary paid to them is borne by the factory concerned. He has further added that in any case, the employees of non-statutory canteens could not have made any claim of being the employees of the factories concerned. Learned Counsel for the Respondents has referred to the constitution of the societies which have been put in management of these canteens. According to the learned Counsel for the Respondents, the control of each society vests in the factory concerned and referring to paragraph 8 of the return of the Respondents, the learned Counsel has further contended that the employees are transferred from one society to another and therefore, there is a common thread between all the societies. The learned Counsel for the Respondents has referred to the decision of the Delhi High Court reported in 1984 LIC 1235 and to the decision of the Supreme Court in S.G. Chemicals and Dyes Trading Employees' Union Vs. S.G. Chemicals and Dyes Trading Limited and Another, in support of his contention that these factories were the single units and economic control vested entirely in the factory concerned. There is no dispute that the canteens whether statutory or non-statutory, are being managed by the societies of which the Petitioner employees are the employees. The only dispute between the parties is that according to the case of the employees, by virtue of the provisions made u/s 46 of the Factories Act and Rule 77 of the M. P. Rules, they are the employees of the factory concerned while the Appellants and the intervenor-societies claim to be the master of these employees. In The Saraspur Mills Co. Ltd. Vs. In The Saraspur Mills Co. Ltd. Vs. Ramanlal Chimanlal and Others, while considering the question in relation to the status of the employee under the Bombay Industrial Relations Act, 1946, their Lordships have held that since under the Factories Act, it was the duty of the Appellant Mills to run and maintain the canteen for the use of the employees and the obligation was cast on the Mill to maintain the canteen, the workers even though employed by the Co-operative Society to which the canteen was entrusted, became the employees of the mill for the purpose of emoluments and such other ancillary benefits. It was immaterial whether the activity was directly connected with the manufacturing process of the factory concerned or not. The matter relating to the status of the employee working in statutory and non-statutory canteens fell again for consideration of the Supreme Court where 42 workmen of LIC of India working in the canteens and different offices of the Corporation claimed the status of the workmen under the LIC on the ground that they were engaged in the work of canteen which was incidentally connected with the activities of the Respondent Corporation. Their Lordships after referring to Section 46 of the Act, and the earlier decision including the case of Saraspur Mills (supra) and M.M. R. Khan (supra) laid down the law on the subject in the following terms, in Parimal Chandra Raha v. LIC of India, AIR 1995 SC 1666 - What emerges from the statute law and the judicial decisions is as follows: (i) Where, as under the provisions of the Factories Act, it is statutorily obligatory on the employer to provide and maintain canteen for the use of his employees, the canteen becomes a part of the establishment and, therefore, the workers employed in such canteen are the employees of the management. (ii) Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer to provide a canteen, the canteen becomes a part of the establishment the workers working in the canteen, the employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the establishment. (ii) The obligation to provide canteen may be explicit or implicit. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the establishment. (ii) The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicitly accepted by or cast upon the employer either by an agreement or an award etc., it may be inferred from the circumstances, and the provision of the canteen may be held to have become a part of the service conditions of the employees. Whether the provision for canteen services has become a part of the service conditions or not, is a question of fact to be determined on the facts and circumstances in each case. Where to provide canteen services has become a part of the service conditions of the employees, the canteen becomes a part of the establishment and the workers in such canteen become the employees of the management. (iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among others, on the nature of the service/facility, the contribution the service in question makes to the efficiency of the employees and the establishment, whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the number of employees employed in the establishment and the number of employees who avail of the service, the length of time for which the service has been continuous available, the hours during which it is available, the nature and character of management, the interest taken by the employer in providing, maintaining, supervising and controlling the service, the contribution made by the management in the form of infrastructure and funds for making the service available etc. From the above decisions, it is clear that where the provisions of the Factories Act, it is the statutory obligation on the employer to provide and maintain canteen for the use of his employees, the canteen becomes the part of the establishment and therefore, the workers employed in the canteen are the employees of the management. From the above decisions, it is clear that where the provisions of the Factories Act, it is the statutory obligation on the employer to provide and maintain canteen for the use of his employees, the canteen becomes the part of the establishment and therefore, the workers employed in the canteen are the employees of the management. The workers employed in the canteens run by the Appellant Factory for which the factories are under a legal obligation are, thus, the employees of the management and not of the co-operative societies which are managing the canteens in these factories. As observed earlier, providing for fixation of price, under Rule 80 of the M. P. rules for food and other items served in these canteens, does not create transfer of the obligation to a co-operative society but only permits management by such society and allows profit up to 5% on its working capital employed in the running of the canteens subject to the fulfilment of the conditions enumerated in Clauses (a) to (d) of Rule 80. Rule 77 of the M. P. Rules also clearly attaches the obligation on the occupier and does not make it transferable in any case. In these circumstances, the order passed by the learned Single Judge to the effect that the workers of the statutory canteens have the status of the workers of the BSP and are entitled to the benefits which are available to the workmen of the BSP, does not call for any interference. This leaves us with the case of workers in non-statutory canteens. It is clear that the canteen would become a part of the establishment even when there is no statutory obligation but the obligation is otherwise on the employer to provide the canteen. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen as held in the case of Parimal Chandra Raha (supra). Where the obligation is implicitly accepted by the employer or cast upon him either by an agreement or by an award, it may be inferred from the circumstances and provision of the canteen may be held to have become a part of the service conditions of the employees. Whether the provision for canteen service has become a part of the service condition or not, is a question of fact to be determined on the facts and circumstances of each case. Whether the provision for canteen service has become a part of the service condition or not, is a question of fact to be determined on the facts and circumstances of each case. A reference has been made to the decision of the Supreme Court in Central Labour Union (Red Flag), Bombay v. Ahmedabad Mfg. and Calico Printing Co. Ltd., 1995 (XI) LLJ 765, that proof of actual employment by the employer is necessary. The said case related to the filing of the complaint before the Industrial Court under the Maharashtra Trade Unions and Prevention of Unfair Labour Practices Act, 1971 and the question whether the workmen represented by the unions were working in statutory canteens or non-statutory canteens and whether they were the employees of the factory concerned in view of the provision of Section 46 of the Act did not fall for consideration. However, in the case of the employees of the non-statutory canteens, it is not clear from the petition that obligation has been explicitly accepted by the Appellant or cast upon it either by an agreement or an award. It is also not clearly spelt out that such non-statutory canteens have become a part of the service conditions of the employees of such factories. In any case, these are disputed and debatable questions of fact and it is difficult in proceedings under Article 226 of the Constitution of India to hold, in the absence of clear evidence of the above fact, that the employees of non-statutory canteens are the workers of the BSP. In the result, this appeal is partly allowed and the direction to the effect that the employees in non-statutory canteens are the employees of BSP is set aside and these employees are free to prove their case in an appropriate forum. The direction with regard to the employees working in statutory canteens is maintained. In the facts and circumstances of the case, the parties are left to bear their own costs of this appeal.