Holding

No master‑servant relationship exists between the canteen workers (appointed by the welfare committee) and MECON; therefore, they are not entitled to the same service conditions or pay as MECON’s regular employees.

Summary

The Canteen Mazdoor Sabha filed a civil appeal challenging a Jharkhand High Court decision that set aside an Industrial Tribunal award granting canteen workers the same pay scales as MECON’s VIP Guest House and Tea Club employees. The core issue was whether a master‑servant (employer‑employee) relationship existed between MECON and the canteen workers, who were appointed by a welfare committee rather than by MECON itself. The Supreme Court examined the validity of the reference under Section 10(2) of the Industrial Disputes Act and the applicability of the constitutional principle of equal pay for equal work (Article 39(d)). Relying on evidence that the canteen was managed by an independent welfare committee and that MECON exercised no disciplinary or contractual control over the workers, the Court held that no such relationship existed. Consequently, the canteen employees could not claim parity of service conditions or pay with MECON’s regular staff. The Court affirmed the High Court’s view and dismissed the appeal.

Issues considered

Whether the employees of the canteen engaged by the MECON Welfare Committee are entitled to the same service conditions and benefits as the employees of MECON's VIP Guest House and Tea Club.
Whether a master‑servant (employer‑employee) relationship exists between MECON (or its management) and the canteen workers.
Whether the reference of the dispute to the Industrial Tribunal under Section 10(2) of the Industrial Disputes Act, 1947, was valid.
Whether the principle of equal pay for equal work under Article 39(d) of the Constitution applies in the absence of a master‑servant relationship.

Legislation cited

Constitution of Indias. Article 39(d)
Industrial Disputes Act, 1947s. 10(2)

Subjects

equal pay for equal workmaster‑servant relationshipindustrial disputeservice conditionswelfare committeecanteen employeesSection 10(2) Industrial Disputes ActArticle 39(d) Constitutionpay parity

Judgment

A CANTEEN MAZDOOR SABHA
v.
METALLURGICAL ENGG. CONSULTANTS (I) LTD. & ORS.

AUGUST 21, 2007

B [A.K. MA THUR AND MARKANDEY KA TJU, JJ.]

Labour Laws:

Industrial Disputes Act, 1947; S. 10(2)/Constitution of India, 1950;
C Article 39(d):

Service conditions-Employees of a canteen engaged by a ~elfare
Committee of Respondent-organisation claiming to be treated at par with its
regular employees-Disputes-Industrial Tribunal passing an award holding
D that workmen of the Canteen entitled to same pay scales as available to the
workmen of the Guest House and Tea Club run by respondent-organisation-
Cha//enge to-Dismissed by Single Judge of the High Court-Reversed by
Division Bench of the High Court holding that since there was no master and
servant relationship between the workmen of Canteen and the respondent
organization, they are not entitled to same service benefits as are admissible
E to its regular workmen-On appeal, Held: Jn order to grant equal pay for
equal work, the Court has to first redress the question whether any
relationship of master and servan.t exists between the workmen and the
organization-Jn the present case, on evidence, there exists no master servant
relationship between the workmen of the Canteen and the respondent.
organisation since the workmen of Canteen are appointed by a welfare
F Committee of the respondent and not by the respondent-In the absence of
existence of master and servant relationship between workmen of the Canteen
and the respondent organisation, question of giving them same benefits,
including salary at par with the workmen of respondent-organisation, does
not arise.
G
A writ petition was filed by the appellants in the Apex Court earlier and
this Court by order dated 23rd February, 1987 directed to list the matter after
pronouncement of the judgment in a bunch of writ petitions. Later, after
pronouncement of the judgment in such petitions, when the writ petitions came

H 210

\
CANTEEN MAZDOOR SABHA v. METALLURGICAL ENGG. CONSULTANTS (l) LTD. 211
up for final disposal, the Court passed an order directing the State Government A
to refer the dispute, as to whether the employees of canteen engaged by the
Welfare Committee of respondent/MECON & Others are entitled to the same
service conditions/benefits as are applicable to the employees of the VIP Guest
House and of the Tea Club who were engaged by MECON, and if so, from
which date etc., to the Industrial Tribunal for adjudication. Accordingly, State B
Government referred the disputes to the Industrial Tribunal under Section
10(2) of the Industrial Disputes Act for adjudication. The Tribunal raised the
following points for consideration:

"(i) Whether the present reference is bad in law and on facts.?

(ii)Whether the relationship of employer and employees exists in C
between the management of MECON; and

(iii) Whether the employees of MECON Canteen are entitled to get
pay scale and other benefits as available to the employees of VIP
Guest House as well as the employees of Tea Club of MECON.
D
The Tribunal held that neither the reference was bad in law nor on facts,
relationship of employer and employees existed between the management of
MECON and the workmen of MECON Canteen and that the workmen of
MECON Canteen are entitled to get pay scales and other benefits which were
available to the workmen ofMECON, VIP Guest House and MECON Tea Club
from the dates of appointments. This award was challenged by MECON in the E
High Court. Single judge of the High Court upheld the order of the Tribunal
and declined to interfere under Article 226 of the Constitution of India.
Aggrieved against the order, MECON approached the Division Bench of the
High Court by way of filing an appeal. The Division Bench of the High Court
observed that no Master and servant relationship existed between the F
employees of the Canteen and MECON, and as such they were not entitled to
the same service benefits as are admissible to the employees of MECON
serving for the VIP Guest House or for the Tea Club. Hence the present appeal

Appellant submitted that the Division Bench of the High Court has gone
wrong and should not have gone into the question of relationship of employees G
of the canteen with that of the management of MECON.

Dismissing the appeal; the Court

HELD: 1.1. There is no two opinion in the matter that the canteen is not
managed by the management of MECON. The point which ought to have been H
212 SUPREME COURT REPORTS (2007] 9 S.C.R.

A addressed by the Tribunal as well as by the Single Judge of High Court was ,
what is the co-relation between the management of the canteen with the
management of MECON. Therefore, in order to answer this question whether
the employees of the canteen are equated with the employees ofMECON the
Tribunal and the Single Judge of High Court should have addressed the
B question whether there is master and servant relationship between the
employees of the canteen with the management of MECON. If that is not
established, then there is no question of seeking any parity with the pay scale
of the employees of MECON. Simply because the canteen workers are
discharging same duties as are being discharged by the employees of the V.l.P.
Guest House or the Tea Club, that will not serve the purpose. On the evidence,
C it appears that there is no such master and servant relationship between the
two. [Para 4) [215-D-F)

1.2. From the facts, it is more than evident that the employees of canteen
are appointed by the Canteen Welfare Committee and not by MECON.
Therefore, the canteen was not being run either under a statutory obligation
D or an obligation arising out of any standing order or other binding circulars
ofMECON. There is no contract between MECON with the employees in the
canteen to the effect that providing of canteen service was a part of the service
conditions of the employees of MECON. Therefore, the Division Bench of the
High Court correctly approached the matter and rightly addressed whether
E there exists any relationship of master and servant between MECON and the
Canteen workers. Since there is no relationship of master and servant
between the employees of the canteen and MECON, therefore, there is no
question of giving them the salary at par with that of the employees of MECON.
[Para 41 [215-F, H; 216-B)

p Management of Reserve Bank of India v. Workmen, 11996] 3 SCC 267;
State Bank ofIndia & Ors. v. State Bank of India Canteen Employees' Union
(Bengal Circle) & Ors., 120001 5 SCC 531; State of Haryana & Ors. v.
Charanjit Singh & Ors., 120061 9 SCC 321 and MMR. Khan & Ors. v. Union
of India & Ors., 119901 Supp. SCC 191, relied on.

G 1.3. In order to grant equal pay for equal work one has to first address
the question whether there is any master and servant relationship between
the canteen employees and MECON. In fact, without going into this question,
other questions could not have been answered. In this view of the matter, the
Division Bench of the High Court correctly approached the matter and found
H that since there is no master and servant relationship between the employees
CANTEEN MAZDOOR SABHA v. METALLURGICAL ENGG. CONSULTANTS (I) LTD. (A.K. MATHUR. J.] 213
of the canteen and MECON, the workers of the canteen are not entitled to A
claim the salary which is given to the employees serving in the V.I.P. Guest
House or Tea Club. (Para 6) (220-C, DJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1587 of2005.

From the final Judgment and Order dated 23.12.2003 of the Jharkhand B
High Court at Ranchi in L.P.A. No. 382 of 1997 (R).

M.P. Jha Ram Ekbal Roy, Harshvardhan Jha and Anil K. Chopra for the
Appellant.

Deba Prasad Mukherjee, Mohit Shah, Anukul Raj, Rituraj Biswas, Manish C
Kumar and Gopal Singh for the Respondents.

The Judgment of the Court was delivered by

A.K. MA THUR, J. I. This Appeal is directed against the order passed
by the High Court of Jharkhand at Ranchi in Letters Patent Appeal No. 382/ D
1997 whereby the Division Bench by order dated 23rd December, 2003 set
aside the order passed by the learned Single Judge as well as the Award of
the Industrial Tribunal holding that the workers of the canteen ofMetallurigical
and Engineering Consultant (India) Ltd. (hereinafter referred to as the Mecon)
run by Mecon Welfare Committee be treated at par with the employees
working in the VIP Guest House and Tea Club of Mecon and granting them E
all the benefits given to those employees and to treat them as employees of
Mecon. The writ petition was filed by the Canteen Mazdoor Sabha in the
Apex Court and this Court by order dated 23rd February, 1987 directed to list
the matter after the judgment was pronounced in writ petition Nos. 12143-
12214of1984. On 19.10.1992, the writ petition came up for final disposal and F
it was stated in the order that the parties agreed that a joint reference under
Section 10(2) of the Industrial Disputes Act,. 1947 (hereinafter referred to as
the Act) be made to the Industrial Tribunal for adjudication of the disputes
between Sabha and Mecon. Following are disputes set out in the order :

"1. Whether the employees of canteen engaged and employed by G
MECON Welfare Committee consisting of the representatives of
MECON (Non-executive) Employees' Union, MECON Executive
Association and nominees of MECON are entitled to the same service
conditions as are applicable to the employees of the VIP Guest House
and of the Tea Club who are employed and engaged by MECON?
H
214 SUPREME COURT REPORTS (2007) 9 S.C.R.

A 2. If so, from what date?

3. In view of the nature of work perfonned by the Canteen employees
engaged and employed by MECON Welfare Committee, are they
justified in law in asking for parity with the employees of MECON
working in the VIP Guest House and the Tea Club keeping in view that
B the total number of the canteen employees are only 25 and the said
Canteen run by Mecon Welfare Committee is a non-statutory and
non-recognised canteen?"

Thereafter, the State Government was directed to refer the disputes to
the Industrial Tribunal under Section 10(2) of the Act for adjudication. The
C Tribunal raised the following points for consideration:

"(i) Whether the present reference is bad in law and on facts.?

(ii)Whether the relationship of employer and employees exists in
between the management of Mecon or the management of Mecon
D (SAIL) Welfare Committee and the employees ofMecon Canteen, and

(iii) Whether the employees of Mecon Canteen are entitled to get pay
scale and other benefits which pay scale and other benefits are made
available to the employees of VIP Guest House as well as the
employees of Tea Club of Mecon?
E
2. The Tribunal after recording necessary evidence and hearing both
the parties held that neither the reference was bad in law nor on facts,
relationship of employer and employees existed between the management of
Mecon and the workmen of Mecon Canteen and that the workmen of Mecon
Canteen are entitled to get pay scales and other benefits which were/are
F available to the workmen of Mecon VIP Guest House and Mecon Tea Club
from the dates of appointments of the concerned workmen. This award was
cha1lenged by the MECON by filing writ petition in the High Court. and
submitted that the Tribunal had misdirected itself in framing the question. It
was said that the question referred as directed by the Supreme Court clearly
G implied that the workers of the canteen were employed by the Mecon Welfare
Committee, distinct from MECON and the question was whether those persons
were liable to be treated as employees of the MECON. Since the question was
wrongly framed, therefore, the wrong answer has been given by the Tribunal.
This was opposed by the Canteen. Sabha and a preliminary objection was
raised to the effect that the writ petition was not maintainable. Learned single
H judge dismissed the preliminary objection of the canteen Sabha and upheld
CANTEEN MAZDOOR SABHA v. METALLURGICAL ENGG. CONSULTANTS (I) LTD. [A.K. MATHUR, J.) 215
the order of the Tribunal and declined to interfere under Article 226 of the A
Constitution of India. Aggrieved against this order the MECON approached
the division bench by filing the appeal, and the division bench after properly
construing the matter came to the conclusion that the canteen was run by the
Canteen Welfare Committee for the welfare of the staff and workmen of
Mecon. Therefore, there was no Master and servant relationship between the B
employees of the Canteen and Mecon, and as such they are not entitled to
the same service benefits as are admissible to the employees of the MECON
serving for the VIP Guest House or for the Tea Club. Consequently, the
Division Bench set aside the order of the Tribunal as well as the order of the
single Judge and dismissed the writ petition. Hence the present appeal by the
Canteen Mazdoor Sabha. C
3. We have heard learned counsel for the parties & perused the record.

4. The basic question before us is whether these canteen employees are
part of Mecon or not. There is no two opinion in the matter that the canteen
is not managed by the management of Mecon. The point which ought to have D ·
been addressed by the Tribunal as well as by the Single Judge of High Court
was what is the co-relation between the management of the canteen with the
management of Mecon. Therefore, in order to answer this question whether
the employees of the canteen are equated with the employees of Mecon the
Tribunal and the Single Judge of High Court should have addressed the
question whether there is master and servant relationship between. the E
employees of the canteen with the management of Mecon. If that is not
established, then there is no question of seeking any parity with the pay scale
of the employees of Mecon. Simply because the canteen workers are
discharging same duties as are being discharged by the employees of the
V.l.P.Guest House or the Tea Club, that will notserve the purpose. On the p
evidence it appears that there is no such master and servant relationship
between the two. In the present case, from the facts it is more than evident
that the employees of canteen are appointed by the Canteen Welfare Committee
and not by Mecon. Therefore, the canteen was not being run either under a
statutory obligation or an obligation arising out of any standing order or
other binding circulars of Mecon. It was also pointed out that there is no G
evidence to show that providing of canteen service was a part of the service
conditions of the employees of Mecon. There is no contract between the
Mecon with the employees in the canteen to this effect. Therefore, the learned
Division Bench correctly approached the matter and rightly addressed whether
there exists any relationship of master and servant between Mecon and the H
216 SUPREME COURT REPORTS [2007] 9 S.C.R.

A Canteen workers. The admitted facts are that the Management of Mecon had
not recognized the Union of employees of the canteen. The day to day sales
are deposited in the account of the Canteen Welfare Committee. The workmen
of the canteen are never transferred either to the VIP Guest House or to the
Tea Club or vice versa. The workmen at the VIP Guest House and Tea Club
B are appointed by the Mecon. There was no bank account given to the
workmen employed in the canteen by the Management of Mecon and their
salaries were not transferred to their respective bank accounts by Mecon
unlike in the case of the employees of the VIP Guest House and the Tea .Club.
Since there is no relationship of master and servant between the employees
of the canteen and Mecon, therefore, there is no question of giving them the
C salary at par with that of the employees of Mecon. These controversies have
been put to rest long back and this Court has made a distinction between the
statutory canteens and non-statutory canteens which are required to be
established either by the statute, they stand on one footing and the other
canteen which is run by the Welfare Committee stands on a different footing.
This distinction has been maintained right from the beginning i.e. in
D MMR.Khan & Ors. v. Union of India & Ors., [1990) Supp. SCC 191). In that
case their Lordships have made a distinction that the canteens run by different
railway establishments are classibiable into three categories i.e. (i) statutory
canteens, (ii) non-statutory recognised canteens and (iii) non-statutory non-
recognised canteens. Their Lordships said th.at the employees of the non-
E statutory non-recognised canteens stand on a different footing and are not
entitled to claim the status of railway employees. It was observed as under:

"However, the employees of the non-statutory non-recognised
canteens are not entitled to claim the status of the railway servants.
These canteens are run more or less on ad hoc basis, the railway
F administration having no control on their work. Neither is there a
record of these canteens nor of the contractors who run them who
keep on changing, much less of the workers engaged in these canteens."

However in this case, this Court gave relief on factual metrix. Similarly,
in Employers in relation to the Management of Reserve Bank of India v.
G Workmen, [1996) 3 sec 267, similar observation was made by a three Judge
Bench of this Court wherein the issue involved was whether the workers
engaged in the canteens of the Reserve Bank of India can be treated as
employees of the Reserve Bank of India and their services can be regularized
or not. Their Lordships said that since these workers are not under the
H disciplinary control of the Reserve Bank oflndia and there existed no 'master
CANTEEN MAZDOOR SABHA v. METALLURGICAL ENGG. CONSULTANTS (I) LTD. (A.K. MATHUR, l.] 217
and servant' relationship between them, therefore, they are not entitled to the A
same service conditions as are admissible to the employees of the Reserve
Bank of India. In this connection, their Lordships observed that the Bank has
a very limited role regarding the functioning of the Welfare Committee which
is managing the canteen and it does not have any control whatsoever over
the employees engaged by the Committee so far as taking any disciplinary
action against any particular employee is concerned. The recruitment of the B
workers for the canteen is made by the Canteen Committee and the attendance
record as well as the sanctioning of leave to the workers is done by the
committee. The only role played by the Bank in the running of the canteen
is the nomination of the three members to the Committee. It was also observed
that there is common ground that the canteen run by the Implementation C
Committee ( Canteen Committee ) is not under any legal obligation. There is
no right in the Bank to supervise and control the work done by the persons
employed· in the Committee nor has the Bank any right to direct the manner
in which the work shall be done by various persons. The Bank only exercises
a remote control. Therefore, their Lordships observed as follows :
D
"Therefore, in the absence of any obligation, statutory or
otherwise, regarding the running of a canteen by the Bank and the
details relating thereto similar to Factories Act or the Railway
Establishment Manual, and in the absence of any effective or direct
control in the Bank to supervise and control the work done by various E
persons, the workers in the canteen run by the Implementation
Committee (Canteen Committee) cannot come within the ratio of
M.M.R.Khan case."

The decision in M.M.R.Khan case (supra) was explained by this Court by a
subsequent three Judge Bench. F
5. Similarly, in State Bank of India & Ors. v. State Bank of India
Canteen Employees' Union (Bengal Circle) & Ors., [2000] 5 SCC 531, their
Lordships observed that in order to provide canteen facilities by providing
subsidy is altogether different from running the canteen. Their Lordships
observed as follows : G
" Presuming that the privilege of providing canteen facilities to the
employees exists, yet it cannot be held that the Bank should provide
the said facility by running a canteen by itself. To promote canteen
facilities by providing subsidy or other facilities is altogether different
from running the c~nteen. Running of a canteen in a small branch H
218 SUPREME COURT REPORTS [2007] 9 S.C.R.

A having staff strength less than a particular limit may not be economical,
but may 'he a waste. There is a vast difference between "promotion"
and "providing". Further, the appointment of the employees by the
Bank has been regulated by the State Bank of mdia General Regulations,
which are statutory Regulations framed by Reserve Bank of India with
the previous sanction of the Central Government in exercise of powers
B conferred by Section 50(3) of the State Bank of India Act, 1955. In the
case of employees of canteens run by LICs, the Bank does not have
any control in their appointment and the aforesaid Recruitment Rules
are not required to be observed."

C Similarly, in State ofHaryana & Ors. v. Charan)it Singh & Ors., [2006] 9 SCC
32 l, another three Judge Bench of this Court had occasion to consider the
matter with regard to Article 39(d) of the Constitution of India i.e. 'equal pay
for equal work'. Their Lordships said that there must be everything identical
and equal. The concept of 'equal pay for equal work' has undergone a sea
of change in series of subsequent decisions. Their Lordships after reviewing
D all the case laws on the subject observed as follows :

"Undoubtedly, the doctrine of "equal pay for equal work" is not an
... abstract doctrine and is capable of being enforced in a court of law .
But equal pay must be for equal work of equal value. The finding in
Devinder Singh case, (l 998) 9 SCC 595, that for similar work the
E principle of equal pay applies, cannot be accepted. Equal pay can only
be given for equal work of equal value. The principle of "equal pay
for equal" has no mechanical application in every case. Article 14
permits reasonable classification based on qualities or characteristics
of persons recruited and grouped together, as against those who were
left out. Of course, the qualities or characteristics must. have a
F ).
reasonable relation to the object sought to be achieved. In service
matters, merit or experience can be a proper basis for classification for
the purpose of pay in order to promote efficiency in administration.
A higher pay scale to avoid stagnation or resultant frustration for lack
of promotional avenues is also an acceptable reason for pay
G differentiation. The view that there cannot be discrimination in pay on
the ground of differences in modes of selection taken in Bhagwan
Dass case, [1987] 4 SCC 634, cannot be accepted. The very fact that
the person has not gone through the process of recruitment may y-
itself, in certain cases, make a different. If the educational qualifications
are different, then also the doctrine may have no application. Even
H
CANTEEN MAZOOOR SABHA v. METALLURGICAL ENGG. CONSULTANTS (I) LID. [A.K. MATHUR, J.] 219

though persons may do the same work, their quality of work may A
differ. Where persons are selected by a Selection Committee on the
basis of merit with due regard to seniority a higher pay scale granted
to such persons who are evaluated by the competent authority cannot
be challenged. A classification based on different in educational
qualifications justifies a different in pay scales. A mere nomenclature B
designating a person as say a carpenter or a craftsman is not enough
to come to the conclusion that he is doing the same work as another
carpenter or craftsman in regular service. The quality of work which
is produced may be different and even the nature of work assigned
may be different. It is not just a comparison of physical activity. The
application of the principle of "equal pay for equal work" requires C
consideration of various dimensions of a given job. The accuracy
required and the dexterity that the job may entail may differ from job
to job. It cannot be judged by the mere volume of work. There may
be qualitative difference as regards reliability and responsibility.
Functions may be the same but the responsibilities make a different.
Thus normally the applicability of this principle must be Jest to be D
evaluated and determined by an expert body. These are not matters
where a writ court can lightly interefere."

Therefore, their Lordships after reviewing all the judgments have considered
all the facets of the principle of Article 39(d) of the Constitution of India.
E
6. Now, adverting to the facts of the present case, the question which
was framed by this Court while remitting the matter for reference clearly
stated, which has been reproduced above, whether the employees of the
canteen engaged and employed by MECON Welfare Committee consisting of
the representatives of MECON (Non-executive) Employees' Union, MECON F
Executive Association and nominees of MECON are entitled to the same
service conditions as are applicable to the employees of the VIP Guest House
and of the Tea Club who are employed and eng~ged by MECON? Therefore,
in order to bring them at par with the employees of the V.I.P.Guest House and
Tea Club ofMecon, one has to decide what is the relationship of the employees
of the canteen with the management of Mecon. Learned counsel for the G
appellant submitted that the Division Bench has gone wrong and should not
have gone into the question of relationship of employees of the canteen with
...... that of the management of Mecon. In fact, without first crossing this hurdle
it was not possible to come to any decision whether the employees who are
recruited by the Mecon management at V.I.P.Guest House or Tea Club can be H
220 SUPREME COURT REPORTS c20011 9 s.c.~.

A treated at par with the employees of the canteen of Mecon and they should
be given the same pay scale as given to the employees of the V.l.P.Guest
House or Tea Club. In fact this question was inherent in the questions framed
by this Court and the Tribunal also framed question whether relationship of
employer and employee existed between the management of Mecon and
B employees of the canteen managed by the welfare committee. Therefore, it is
not correct on the part of learned counsel for the appellant to submit that this
question should not have been gone into and if this question has been
wrongly framed or wrongly referred before the Tribunal then the matter should
have been directly approached by the Management of the Committee before
this Court. The argument of learned counsel for the appellant is totally
C misconceived. In order to grant equal pay for equal work one has to first
address the question whether there is any master and servant relationship
between the canteen employees and Mecon. In fact, without going into this
question, other questions could not have been answered. In this view of the
matter, the· Division Bench correctly approached the matter and found that
since there is no master and servant relationship between the employees of
D the canteen and Mecon, the workers of the canteen are not entitled to claim
the salary which is given to the employees serving in the V.I.P.Guest House
or Tea Club. -·
7. As a result of our above discussion, we are of opinion that the view
E taken by the Division Bench of the High Co~rt appears to be correct and there
is no ground to interfere with the order of the High Court. Consequently, the
appeal fails and is dismissed with no order as to costs.

S.K.S. Appeal dismissed.