Holding

The Supreme Court held that the canteen workers are not workmen of the Reserve Bank of India as no master‑servant relationship or statutory obligation exists, and therefore the Tribunal’s award is set aside.

Summary

The Reserve Bank of India (RBI) provided canteen facilities for its Class III and IV employees through three arrangements – an Implementation Committee, co‑operative societies and contractors – but had no statutory duty to run these canteens. The Central Government Industrial Tribunal held that 166 canteen workers were employees of the RBI and entitled to regularisation. The RBI appealed, arguing that it exercised no direct control or supervision over the canteen staff and that no master‑servant relationship existed. The Supreme Court examined the test for employer‑employee status, emphasizing the need for the employer to have the right to supervise and control the work. It found that the RBI’s role was limited to providing subsidies and premises, with no authority to direct work, discipline staff, or recruit them. Consequently, the Court held that the canteen workers were not workmen of the RBI, the Tribunal’s award was unsustainable, and set it aside. The appeal was allowed.

Issues considered

Whether the canteen workers are workmen of the Reserve Bank of India under the Industrial Disputes Act, 1947.
Whether a master‑servant relationship exists between the RBI and the canteen workers.
Whether the RBI has any statutory or other legal obligation to run the canteens.
Whether the ratio laid down in M.M.R. Khan v. Union of India is applicable to the present facts.

Legislation cited

Subjects

master‑servant relationshipworkmencanteenReserve Bank of Indiaindustrial disputeregularisationcontrol and supervisionIndustrial Disputes Actemployment law

Judgment

)
t
A EMPLOYERS IN RELATION TO THE MANAGEMENT OF
RESERVE BANK OF INDIA
v.
-
THEIR WORKMEN

FEBRUARY 28, 1996
B
(A.M. AHMADI, CJ., S.C. SEN AND KS. PARIPOORNAN, JJ.]

Labour Law:

C Industrial Disputes Act, 1947: Section 2(a).

Employees of canteens-Run by employer organisation-No legal or
statu(01y obligation to mn such canteens-Not light to supe1vise or control
their work or take disciplina1y·action against them-Held: Master and Se1vant
Relationship did not exist-Hence they were not workmen of organisa-
D tion-Not entitled to regulalisation-Reserve Bank of India Act, 1934.

The-appellant-Bank had been providing canteen facilities to its
employees in Classes III and IV. The "Lounge" at the appellant-Bank
catered to its officers at some centres. There was no obligation either under
any statute or otherwise, for the appellant to run the canteens. It was so
E done only as a welf~re measure. The .appellant bore by way of a subsidy to
the extent of95% of the costs incurred by the canteens for payment of salary,
provident fund contribution, gratuity, uniform etc.; and also provided
premises, fixtures, utensils, furniture, electricity, water etc.; free of charges.
The canteens were run either by "Implementation Committee (Canteen
F Committee)" or "Co-operative Societies" or "Contractors". Out of 12 repre-
sentatives in the Implementation Committee three were from the appellant-
Bank. Some employees, who were in the Committee were permitted by the
appellant for full day or half day to look after or supervise the day-to- day
affairs of the canteen. The Committee could neither increase the strength of
)
,
the canteen employees nor could revise their wages without the consent.of
G the appellant-Bank. The appellant reimbursed the charges incurred for
getting the licences for the canteens and also the expenses incurred over the
,,
periodical medical check iip of the employees attached to the kitchen and
counters. In these circumstances the Central Government Industrial
Tribunal held that the persons employed in the canteens to be employees of
H the appellant-Bank. The Tribunal further directed the appellant to tit them
1176
(

RESERVEBANKOFINDIAv. THEIR WORKMEN 1177

with retrospective effect, in the corresponding categories of employees A
employed in the Officers" lounge. Aggrieved by the Tribunal's judgment the
appellant preferred the present appeal.

Allowing the appeal, this Court

HELD : 1.l. Against the aspects relied on by the Central Government B
Industrial Tribunal for its decision in respect of canteens run by the Im-
plementation Committee (Canteen Committee), the fact remains that the
appeJJant-Bank has only a limited role to play regarding the functioning of
the committee and do not have any control whatsoever on the employees
engaged by the committee so far as taking of disciplinary action against any C
particular employee is concerned. The recruitment of the 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 canteen run by the Implementation Committee (Canteen Committee)
is not under any legal obligation to run the same. Moreover, there is no
right in the Bank to supervise and control the work done by the persons D
employed in that committee nor has the Bank any right to direct the
manner in which the work shall be done by various persons. The ·Bank has
absolutely no right to take any disciplinary action or to direct any canteerr
employee to do a particular work. Even ~rding to the Tribunal, the Bank
exercises only a 'remote control'. Therefore, m the absence of any obligation E
statutory or otherwise regarding the running of a canteen by the Bank and
the details relating thereto similar to Factories Act or the Railway Estab-
lishment Manual, and in the absence of any effective or direct control in
the Bank to supervise and control the work done by vari.ous persons, the
workers in the canteen run by the Implementation Committee (Canteen
Committee) cannot come within the ratio laid down by this Court in M.MR. F
Khan's case. (1189-C; F-G; 1190-A-C]

1.2. As regards the canteens run by the Cooperative Societies, the
mere fact that the Bank nominates its representative to the committee or
reimburses the licence renewal charges will not in any way provide any . G
direct control. (1190-D-F]

1.3. As per the agreement between the Bank and the contractor, the
Bank has detailed the subsidy and other facilities afforded by it to run the
canteen and has also stipulated certain conditions necessary for conducting
the canteen in a good, hygenic and efficient manner like insistence of the H
J
1178 SUPREME COURT REPORTS [1996] 2 S.C.R.

A quality of food, supply of food, engagement of experienced persons etc. Such
conduct cannot in any manner point out any obligation in the Bank to
provide "canteen" as wrongly assumed by the Tribunal. Sine~ the distin-
guishing features mentioned in M.M.R. Khan's case are not present in this
case, the Tribunal by a negative process was inclined to hold that though the
canteens may be non-statutory and non-recognised in nature, they 'could be
B said to be' non-statutory recognised ones and so they will be entitled to get
all the benefits like the recognised canteens. This is a wrong approach to the
issue. The non- statutory recognised canteens in the instant case are not
similar to the non-statutory recognised canteens considered in M.M.R.
Khan's case. If the workers in the non-statutory recognised canteens them-
C selves cannot be considered to be workmen under the Bank, by the same
token. the workers employed by the contractors, even if they are considered
to be non-statutory recognised canteens as held by the Tribunal, will not be
entitled to get any benefit. (1190-G-H; 119.1-A-D]

D M.M.R. Khan v. Union of India, (1990) Supp. SCC 191, held inap-
plicable.

2. On the facts of this case, in the absence of any right in the Bank to
supervise and control the work or the details thereof in any manner regard-
ing the canteen workers employed in the three types of canteens, it cannot
E be said that the relationship of master and servant existed between the Bank
and the various persons employed in the three types of canteens. They are
not workmen of the appellant-Bank and they are not comparable employees
employed in the Officers' lounge. Therefore, the demand for regularis~tion
is unsustainable and they are not entitled to any relief. (1191-F-H]

F M.M.R. Khan v. Union of India, (1990) Supp. SCC 191, Saraspur Mills
Co. Ltd. v. Raman/al Chimanlal, (1974) 3 SCC 66 and Basti Sugar Mills Ltd.
v; Ram Ujagar, AIR (1964) SC 355, held inapplicable.

Dharangadhra Chemical Works Ltd. v. State of Saurashtra and Others,
G AIR (1957) SC 368, Chiraman Rao v. State of M.P., AIR (1958) SC 388 and
Puri Urban Co-operative Bank v. Madhusudhan Sahu, (1992) 2 SCR 977,
·relied on.

Parimal Chandra Raha v. Life Insurance Corporation ot India, JT
(1995) 3 SC 288 and Mersey Docks and Harbour Board v~ Coggins & Griffith
H (Liverpool) Ltd., (1947) 1AC1 (E) 23, referred to.
\ \ RESERVE BANK OF INDIAv. TIIEIR WORKMEN [PARIPOORNAN, J.] 1179

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4177 of A
1996.

From the Judgment and Order dated 28.2.95 of the Central Govern-
ment Industrial Tribunal No. 1 at Bombay in Ref. No. C.G. IT-96 of 1991.

Harish N. Salve, H.S. Parihar and C. Mukund for the Appellants. B

V.M. Tarkunde, S.D. Poojari and Rejesh for the Respondents.

The Judgment of the Court was delivered by

PARIPOORNAN, J. Special leave granted. c
2. This appeal is filed by "Employers in relation to the Management
of Reserve Bank of India (hereinafter referred to as "the Bank") against
the award of the Central Government Industrial Tribunal No. 1 at Bombay
dated 28.2.1995 and rendered in Ref. No. CGIT-96 of 1991. The workmen
engaged in the catering establishments of the bank is the respondent in this D
appeal.

3. Government of India, by letter dated 13.12.1991, referred the
following dispute for adjudication under Section lO(l)(d) read with section
2A of the Industrial Disputes Act, 1947 to the Tribunal : E
"Whether 166 employees engaged in various catering estab-
lishments of the Reserve Bank of India at Bombay are the workmen
of the Reserve Bank of India ? If so, whether their demand for
regularisation with retrospective effect was justified ? If so, the
extent of relief payable to these 166 persons may he indicated." F

4. The employer - Reserve ~ank of India is a Corporation estab-
lished under the Reserve Bank of India Act, 1934 (No. 2) and vested with
some sovereign functions such as issue of currency notes etc. It acts as
Bankers' Bank and as Banker to the Central and State Governments. For
carrying on the business, the Bank employs various categories of staff such G
as Officers (Class-I), (Class-II), Clerks, Stenographers, Typists etc. (Class-
III) and Peons, Mazdoors Etc. (Class-IV). The Bank has been providing
canteen facilities to its e~ployees in Classes III and IV. The Rese1ve Bank
"Lounge" caters to the needs of its officers at some centres. There is no
obligation either under any statute or otherwise, for the Bank to run the H
1
1180 SUPREME COURT REPORTS [1996] 2 S.C.R.

A canteens. It is so done only as a welfare measure. The Bank bears by way
of subsidy to the extent of 95% of the costs incurred by the canteens for
payment of salary, provident fund contribution, gratuity, uniform etc., and
also provides premises, fixtures, utensils, furniture, electricity, water etc.,
free of charges. It is seen that the canteens are run either by "Implemen-
tation Committee (Canteen Committee)" or "Co-operative Societies" or
B
"contractors". As stated, such canteens are solely for Cla~.s III and class IV
employees of the Bank. The Bank has its office at Amar building, Fort,
Bombay wherein 1500 employees are working. Similarly, the Bank has its
office at Byculla and another office at Bandra, Kurla Complex Building. In
each of the latter places 1000 persons are employed.
c
5. It has come out in evidence that the constitution and functioning.
of the aforesaid canteens for Class III and Class IV employees and
functioning at Amar Building, Byculla Building and Bandra, Kurla Com-
plex Building are different. The canteen at Amar Building is managed by
D an Implementation Committee (Canteen Committee). It is functioning ever
since 1959. The canteen Committee consists of four representatives from
the Class IV employees Union, five representatives from the Class III
employees Union and three representatives from the Bank. The three
representatives of the Bank are the Currency Officer, Personnel Officer
and the Officer from the Personal Policy Department. The Currency
E Officer is always the Chairman of the Canteen Committee. About 77
workmen are employed in the said canteen.

At Byculla the Bank is running a canteen through a Co-operative
·Society since 1989. 25 workmen are employed therein. One of the
p employees of the Bank, who is a member of th~ Managing Committee of
the Society, is relieved of his work for the whole day to look after or
supervise the work of the canteen. The Bank reimburses the Society the
charges incurred for getting the licences under the Shops and Estab-
lishments Act. Prior Permission of the Bank is required to increase the
strength of the employees.
G
In the Bank office at Bandra, Kurla Complex and the one situate at
New Central office building canteen contractors are engaged. In the
Bandra Kurla Complex Building, M/S. N.T. Shetty the contractor has
employed 21 persons. In the new Central Office building, the contractor
H MIS. Alva Caterer has employed 30 persons. (The total number of persons
\
\
RESERVE BANK OF INDIAv. TIIEIR WORKMEN (PARIPOORNAN, J.] 1181

employed in all the canteens amount to only 158, though the case has A
proceeded on the basis that there are '166' persons).

6. The point at issue between the parties is whether the persons
working in the various canteens aforesaid are employees of the Reserve
Bank of India. The plea of the Federation on behalf of the workmen is that
the Bank is under a statutory obligation to provide canteen facility to the B
employees and the same is being done through agencies sucli as Implemen-
tation Committee (Canteen Committee), Co-operative Society and contrac-
tor instead of the Bank doing it on its own by employing persons directly.
On behalf of the workmen, it was further contended that the Bank cannot
shift its responsibility to others, that the entire economic control is with the C
bank and so the workmen employed in all these canteens, whether by the
implementation Committee or by the Co-operative Societies or by the
contractors should be directed to be absorbed with retrospective effect
with point to point adjustment and the Bank be directed to pay difference
of wages.
D
7. The Bank disputed the claim made by the Federation on behalf of
the workmen. It was contended that the Bank makes available space for
running the canteens on leave and licence basis and various facilities are
also provided to the Implementation Committee, Co-operative Society or
the contractor, whosoever runs the canteen. The canteens are in the nature E
of clubs. The management of the Bank is not respOnsible for employment
of persons in the canteens. Persons serving in the canteens are employed
by the Implemention Committee, the Co-operative Society or the Contrac-
tor, as the case may be.
F
The Bank does not supervise or control the working of the canteens
or the supply of eatables to employees. The employees are not under an
obligation to purchase eatables from the canteen. There is no relationship
of master and servant between the Bank and the various persons employed
in the canteens aforesaid. The Bank does not carry any trade or business
in the canteens. The staff canteens are established only as a welfare G
-i measure. Similar demands made by the staff canteen employees and the
request made to the Central Government to refer the dispute for adjudica-
tion was rejected by the Central Government and the challenge against the
same before the Calcutta High Court was unsuccessful. According to the
Bank, it has no statutory or other obligation to run the canteens and it has H
I
1182 SUPREME COURT REPORTS [1996] 2 S.C.R.

A no direct control or supervision over the, employees engaged in the can-
teens. It has no right to take any disciplinary action or to direct any canteen
employee to do a particular work. The disciplinary control over the persons
employed in the canteens does not vest in the Bank nor has the Bank any
say or control regarding the allocation of work or the way in which the
work is carried out by the said employees. Sanctioning of leave, distribution
B of work, maintenance of the Attendance Register are all cione either by the
Implementatio11 Committee (Canteen Committee) or by the Co-operative
Society or by the contractor.

8. The Tribunal, on the basis of the materials available before it and
C on hearing the parties, held that 1966 persons mentioned in the list at-
tached to the reference and employed in various canteens are employees
of the Reserve Bank of India and they are entitled to appropriate relief in
that behalf. An award was passed affording relief to 166 employees working
in the various canteens in the following terms :

D "From the nature of the work that is being performed by the 166
persons mentioned in the list attached to the reference it is seen
that they have comparable employees.employed in the Officers
lounge. The exercise of fitting of these 166 employees in the
corresponding categories will have to be carried out by the Reserve
E Bank of India, that th<-:Y will have to be paid difference in wages
which they would have earned and which they have been paid. As
can be seen from the Annexure 'A' to the statement of claim
certain categories of employees are clubbed together for the pur-
poses of pay scale. The Assistant cook, tea boys & farash is one
such clubbing, Supervisor and coupon clerk is another .... ., .............. .
F

The just direction in my view would be that they will be entitled
to absorption and difference in back wages with effect from 1st of
M~rch 1995. In respect of employees who are working in the
G
canteens run through the contractors they will be entitled to the
benefit with effect from the date the respective contracts come to
an end."

It is the aforesaid award that is assailed by the Bank in this appeal filed by
H Special Leave.
RESERVE BANK OF INDIA v. THEIR WORKMEN [PARIPOORNAN, J.) 1183

.9. A perusal of the award passed by the Tribunal as a whole shows, A
that in its view the plea 'raised by the workmen employed in various
canteens clearly falls within the ratio laid down by this Court in M.M.R.
Khan v. Union of India, [1990] Supp. SCC 191 and so they are entitled to
the reliefs prayed for. We are of the view that the Tribunal misread and
misunderstood the decision in M.M.R. Khan's case (supra) and has misap- B
plied the ratio laid down in the said decision to the instant case. Therefore,
a review of the· said decision and the extent to which the principles or ratio
laid down therein can be said to be applicable in the instant case calls for
a detailed analysis and we shall advert to the said aspect a little later.

10. One aspect is clear. The Reserve Bank of India (the bank) is C
under no statutory or other legal obligation to provide canteen facilities to
its employees. The Tribunal has not found any such statutory or legal
obligation in the Bank. That apart, we have to bear in mind the following
salient feature in the matter of recruitment of staff by the Banks. It is a
well known fact that recruitment of staff (inclusive of class-IV) to the banks D
is done by a Selection Board, and there are guidelines governing the
process of selection. So also in the case of Reserve Bank of India, the
process of selection and recruitment of the staff is by a different Board and
appropriate qualifications are prescribed for the particular posts. In the
case of persons employed in the canteens, they are not subject to the rigour
and discipline of the above rules and methods ofselection. This distinguish- E
ing feature is relevant in adjudicating the controversy raised herein. The
Tribunal has held that (1) Regarding canteens run by the Implementation
Committee, the Bank exercises "remote control", which is as effective as
any, (para 26 of the award); (2) Regarding the canteens run by Co-opera-_
tive Societies, the Tribunal has held that they are non-statutory but recog-
nised canteens and by nominating the representative of the bank to the F
Committee, it exercises control (para 28 of the Award); (3) Regarding the
canteens run by contractors, "non- statutory", "non-recognised canteens", in ·
the absence of distinguishing features highlighted in para 38 of the decision
M.M.R. Khan's case (supra), they could be said to be "recognised canteens"
by the Bank and the persons employed by the contractors are also entitled G
to the benefit similar to the one afforded to person employed in the
canteens run by the Implementation Committee and Co-operative societies
(para 32 of the award). The question that falls for our consideration is
whether the aforesaid view of the Tribunal is justified in law, holding that
the instant case is covered by the decision of this Court in M.M.R. Khan's
case (supra). H
1184 SUPREME COURT REPORTS (1996) 2 S.C.R.
I)
A 11. The test to determine-as to whether as person is a workmao aod
the relatioµship of master and servaot exists in a particular case has been
laid down by this Court in innumerable decisions. In one of the earliest oft
quoted cases,Dharangadhra Chemical Woiks Ltd. v.State of Saurashtra and
others, AIR (1957) SC 264, delivering the judgment of the four-member
Bench, Bhagwati, J. considered in detail the various decisions on the point
B aod laid down the law thus : i

"The principle which emerges from these authorities is that the
prima facie test for the determination of the relationship between
master and servaot is the existence of the right in the master to
supervise aod CLntrol the work done by the servaot not only in the
c- matter of directing what work the servaot is to do but also the
manner in which he shall do his work; or to borrow the words of
Lord Uthwatt at page 23 in Mersey Docks and Harbour Board v.
Coggins & Griffith (Liverpool) Ltd., (1947-I AC 1, at page 23(E),
"The proper test is whether or.not (he hirer had authority to control
D the manner of execution of (he act in question.•

· The nature or extent of control which is requisite to establish
the relationship of employer aod employee must necessarily vary
form business to business aod is by its very nature incapable of
precise definition. ·
E

The correct method of approach, therefore, would be to consider .
whether having regard to the naiure of fhe work (here was due control
and supervision by fhe employer".........• •
F •
(Emphasis supplied)

· The above decision was followed by a three member Bench in Chintaman
Rao v. State of M.P. AIR (1958) SC 388. In this decision the Court also
observed at page 392, paragraph rn, thus ":
G
"There is, therefore, a clear-cut distinction between a contrac-
tor and a workmao. The identifying mark o( the latter is that he
should be under the control aod supervision of fhe employer in
· respect of fhe details of the work.•

H (Emphasis supplied)
RESERVE BANK OFIND!Av. TIIEIR WORKMEN [PARIPOORNAN,J.] 1185
-,-~--

In Management of Mis. Puri Urban Co-operative Bank v. Madhusudhan .A-··
Salm (1992) 2 SCR 977, delivering the judgment on behalf of the Bend~
Punchhi, J. at page 980, after referring to the aforesaid decisions, stated
thus:

'It stands established that Industrial law revolves on the axis
of master and servant. relationship and by a catena of precedents B
it stands established that the prima facie test of relationship ·of
master and servant is the existence of the right in the master to
supervise and control the work done by the servant (the measure
of supervision and control apart) not only in the matter of directing
what work the servant is to do but also the manner in which he C
shall do his work. And this principle holds the field".

(Emphasis supplied)

12. In applying the law laid down by this Court, as stated above, we
should distinguish those line of cases, where a statutory liability is cast on D
the employer for maintaining the canteen viz. as per Section 46 of the
Factories Act or due to the extended meaning given to the definition of
the word 'employer' in the particular. statute, any other person like a
contractor to whom as owner of the u~dertaking had entrusted the execu-
tion of any work which was ordinarily part of an undertaking or industry E
v.
was also covered. See in this connection Saraspur Mills Co. Ltd. Raman-
/al Chimanla~ [1974] 3 SCC 66 and Basti Sugar Mills Ltd. v. Ram Ujagar,
AIR (1964) SC 355. We should at once state that the principles laid down
in those line of eases cannot apply herein, since admittedly (a) no statutory
liability is cast on the Bank to run a canteen and Section 46 of the Factories
Act is inapplicable herein; and (b) the Industrial Disputes Act does not F ·
contain an extended_ definition of the word 'employer'.

13. We heard Mr. Salve, Senior Counsel who appeared for ·the
appellants and. Mr. Tarkunde, Senior Counsel who appeared for the
respondent.
G
14. We shall now advert to the decision of this Court in M.M.R
Khan's case (supra) to understand its scope and effect. In the said case,
the court was dealing with the workers in canteens run in the. different
railway establishments. The workers claimed that they should be treated as
_"rail~ay employees" and should be extended all service conditions which H
-'-
,.
1186 SUPREME COURT REPORTS [1996] 2 S.C.R.

A. are available to the railway employees. The court _classified the canteens
into three categories : (1) Statutory Canteens which are required to be
provided compulsorily in view of section 46 of the Factories Act, 1948; (2)
Non-statutory Recognised Canteens - such canteens are established with
the prior approval and recognition of the Railway Board as per the proce-
dure detailed in the Railway Establishment Manual; and (3) Non-statutory
B Non-recognised Canteens - these are canteens established without the
prior approval or recognition of the Railway Board.

Categ01y No. 1 : Statutory Canteens : This Court in Civil Appeal No.
368 of 1978 dated 22.10.1980 had held that the employees in the statutory
·c canteens were railway employees for the purpose of the Factories Act. In the
said ·decision, this Court declined to interfere with the rejection of the
demand as the workers for pay and allowances to them as if they were
railway employees. As a result of subsequent orders passed.by the govern-
ment, Railway Board and the decision of this Court and instructions of the
D department, it became evid~nce that the government has complete control
over the canteens and the workers employed therein became holders of
civil posts within the meaning of Article 311 of the Constitution. Their
recruitment and service conditions are governed by the rules applicable to
the employees of the government department/office/establishment to which
the canteens are attached. In this background, the Court adverted in detail
E to the various government orders and circulars of the Railway Board
vis-a-vis section 45 of the Factories Act and held that the employees in the
"statutory canteens" of the railways will have to be treated as ''railway
servants". It was further observed that the employees in the statutory
canteens are entitled to the status of railway employees and they are
entitled to succeed in their claim purely on facts peculiar to them discussed
F
in the judgment.

Dealing with the second category-"Non-statutory Recognised Can-
teens", the Court adverted to paragraphs 2831 to 2834 of the Railway
Establishment Manual and held that the aforesaid provisions enjoin the
G Railway Administration to take steps to develop their canteen organisation
to the maximum possible extent as a measure of staff welfare preferably by
encouraging the development of Canteens for staff on co-operative basis.
This mandate was stated to be in addition to the canteens required to be
established by the Factories Act. On a review of the various provisions of
H the Railway Establishment Manual (the details whereof were adverted to
RESERVE BANK OF INDIA v. TIIEIR WORKMEN [PARIPOORNAN, J .] 1187

in paragraphs 31 to 35 of the judgment) and proceeding of courts, it was A
held in paragraph 36 of the judgment that there is hardly any difference
between the statutory canteens and non-statutory recognised canteens.
Detailed provisions of the Railway Establishment Manual were highlighted
to show that the obligations of the Board under the Manual are substan-
tially similar to those enjoined under the Factories Act and no distinction B
can be made between the employees of the two types of canteens --
statutory canteens and non-statutory recognised canteens·-- so far as their
service conditions are concerned. So, it was further held that the employees
in the non-statutory recognised canteens should be treated on par, with
those employees in the statutory canteens and they should be treated for
all purposes as railway servants. C

Dealing with the category of persons employed in the "non-statutory
non-recognised canteens", in paragraph 38 of the judgment, this Court
highlighted the fact that they were not started with the prior approval of
the Board as required under paragraph 2831 of the Railway Establishment D
Manual. They are not required to be managed either as per the provisions
of the Railway Establishment Manual or the administrative instructions.
There is no obligation on the railway administration to provide them with
any facility nor are they given any subsidy or loan. The canteens are run
by private contractors and there is no continuity either of the contractors
or the workers engaged by them. There is further no obligation cast even E
on the local officers to supervise the working of these canteens, there
existed no rules for recruitment of the workers and their service conditions,
and the canteens ~re run on ad hoc basis; and in these circumstances it
was held that the workers engaged in these canteens are not entitled to
claim the status of the railway servants. F

15. We have held earlier that there is no statutory or other obligation
for the bank to run canteens. The provisions of the Factories Act do not
apply. So, we are only concerned with categories 2 and 3 (Non-statutory
Recognised Canteens and Non-Statutory Non-recognised Canteens) dealt
with in M.M.R. Khan's case (supra). It should be remembered that the plea G
·of the canteen workers of three categories in M.M.R. Khan's case (supra)
was .that they were railway servants. With regard to the Non-statutory
Recognised Canteens, on an appraisal of the relevant paragraphs of the
Railway Establishment Manual, the notifications and circulars issued by the
Board from time to time and the orders passed by courts, this Court held H
1188 SUPREME COURT REPORTS [1996] 2 S.C.R.

A that there is hardly any difference between the statutory canteens and Non-
statutory Recognised Canteens and no distinction is possible between the
employees of the two types of canteens so far as their service conditions
are concerned. Indeed in a later decision of this Court in Pa1imal Chandra
Raha v. Life Insurance Corporation of India JT (1995) 3 SC 288 at page
B 304, in paragraph 26 of the judgment, this Court highlighted the fact that
M.M.R. Khan's case (supra) which had decided the claim of the Non-
statutory Recognised Canteens was decided on the facts of that case
including the provisions of the Railway Establishment Manual, the
notifications and circulars issued by the Railway Board from time to time
and other documents. The non-statutory recognised canteens were also to ·
C be on par with the statutory canteens in view of the mandate contained in
paragraphs 2830 to 2834 of the Railway Establishment Manual. In our
opinion, the said reasoning and conclusion of this Court in M.M.R. Khan's
case (supra) rested· on its own facts.

D 16. Similarly, dealing with the plea of the various persons engaged in
the non-statutory non-recognised canteens, that they are enti~led to get the
status of the railway servants, it should be stated that the plea was negatived
in paragraph 38 of the judgment by reference to the provisions of the.
Railway Establishment Manual and other administrative instructions. Here
again the decision rested on its own facts.
E
17. Before the Tribunal, on behalf of the canteen employees the
decision of the Central Government Industrial Tribunal at Calcutta Ref.
No. 63175 in a matter between the State Bank of India and their workmen
and the decision of the Bombay High Court in W.P. 933/90 were relied on
p as supporting their plea. On the other hand, the Bank relied on the decision
of the Calcutta High Court in Civil Order No. 11488/W/83, wherein the
plea of the empl_gYe.es of Co-operative canteens as workmen of the Reserve
Bank of India was rejected, for reference. A decision of the Bombay High
Court in W.P. 610/82 to similar effect was also relied on. We do not have
all the relevant papers and documents as also the complete text of the
G decision in those cases to appr~ciate the reasoning and conclusion arrived
at in those cases. So we do not propose to deal with them. If at all, it is
the latter decisions of Calcutta and Bombay High Courts which seem to be
more in point.

H 18. Now we have to examme the reasons which persuaded the
RESERVE BANK OF INDIA v. TIIEIR WORKMEN [PARIPOORNAN, J.) 1189

Tribunal in this case to hold that the instant case falls within the ratio laid A
down by this Court in M.M.R. Khan's case (supra). In all the three
different categories of canteens - canteens run by the implementation
committee (Canteen Committee), Co-operative Societies and Contractors
- the Bank was making grants by way of subsidy at 95% of the costs
incurred by the canteens for payment of salary, P.F. contribution, gratuity
Uniform etc., besides providing fuel, water, fixtures, utensils, furniture, B
electricity, premises etc., free of charge. We will take up the individual facts
highlighted by the Tribunal in respect of the different categories of can-
teens. When the question between the employees in relation to Reserve
Bank of India and their class III workmen came up before Justice Sri
Dinghe on a reference, on an earlier occasion, the Bank had submitted that C
adequate canteen facilities are available to the employees of the Bank and
that the Bank has provided facilities in that regard. Regarding the canteen
run by the Implementation committee (Canteen Committee), out of the 12
representatives 3 of them are from the bank -- the Currency Officer,
Personnel Officer and the officer from the Personal Policy Department.
The Currency Officer is always the Chairman of the Canteen Committee. D
The Bank relieved four employees who are in the Committee, two for full
day and two for half day to supervise the day to day affairs of the canteen.
The committee cannot increase the strength of the canteen employees
without the permission of the bank. The rates of the eatables also cannot
be revised without the consent of the Manager. They cannot effect any E
wage revision without the approval of the Bank. The Bank is also reimburs-
ing the expenses incurred over the periodical medical check up of the
employees attached to the kitchen and counters. In these circumstances,
the Tribunal held that the case clearly falls within the ratio laid down by
this court in M.M.R. Khan's case (supra), since the Bank exercises "remote
control" which is as effective as any. As against the above aspects, the fact F
remains that according to the Bank it has only a limited role to play
regarding the functioning of the committee and do not have any control
whatsoever on the employees engaged by the committee so far as taking of
disciplinary action against any particular employee is concerned. The Bank
has further brought out in cross-examination of the employees' repre- G
sentative that the recruitment of the workers for the canteen is made by
the Canteen Committee, and the attendance record as well as the sanction-
ing of leave to the workers is done by the committee. It was also brought
out in evidence that the only role played by the Bank in the running of the
canteen was the nomination of the three members to the committee. It is
common ground that the canteen run by the Implementation Committee H
1190 SUPREME COURT REPORTS [1996] 2 S.C.R.

A (Canteen Committee) is not under any legal obligation as was the case in
M.M.R. Khan's case (supra). Moreover, there is no right in the Bank to
0

supervise and control the work done by the pers.ons 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 has absolutely no right
to take any disciplinary action or to direct any canteen employee to do a
B particular work. Even according to the Tribunal, the Bank exercises only
a 'remote control'. We are of the view that 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 Estab-
lishment Manual, and in the absence of any effective or direct control in
C the Bank to supervise and control the work done by various persons, the
workers in the canteen run by the Implementation Committee (Canteen
Committee) cannot come within the ratio laid down by this Court in
M.M.R. Khan's case (supra).

19. We shall now take up the case of canteens run by the Co-
D operative Societies. Apart from subsidy, and other matters provided free
of charge like water, electricity, premises, furniture etc., the Tribunal has
adverted to the fact that the licence renewal charges paid by the committee
are reimbursed by the Bank. Neither the strength of ~he workmen
employed, nor the wages can be revised without the prior sanction of the
Bank and so these canteens, are non-statutory recognised canteens, and
E there is direct control exercised by the Bank in the from nominating the
representative of the Bank. Here again none of the peculiar aspects ad-
verted to by this Court in M.M.R. Khan's case (supra) regarding the
non-statutory recognised canteens are present. The mere fact that the Bank
nominates its representative to the committee or reimburses the licence
F renewal charges will not in any way provide any direct control.

20. We will now take up the matter regarding the non-statutory
non-recognised canteens. In dealing with this matter, the Tribunal has
referred to the various aspects stressed in paragraph 38 of the judgment in
M.M.R. Khan's case (supra) that the workmen therein are not railway
G servants. The_ Tribunal has adverted to the agreement executed between
the Bank and the contractor which, according to it, will show that the
distinguishing features mentioned in M.M.R. Khan's case (supni.) ·are not
present in this case. It may be so. That leads us to no positive conclusion
rega_rding the matter at issue. As per the agreement the Bank has detailed
H the subsidy and other facilities afforded by it to run the canteen and has
\
RESERVE BANK OF INDIAv. THEIR WORKMEN [PARIPOORNAN, J.] 1191

also stipulated certain conditions necessary for conducting the canteen in A
a good, hygenic and efficient manner like insistence of the quality of food,
supply of food, engagement of experienced person etc. Such conduct
cannot in any manner point out any obligation in the Bank to provide
"canteen" as wrongly assumed by the· Tribunal. Since the distinguishing
features mentioned in M.M.R. Khan's case (supra) are not present in this· B

- case, the Tribunal by a negative process was inclined to hold that though
the canteens may be non-statutory and non-recognised in nature, they
'could be said to be' non-statutory recognised ones and so they will be
entitled to get all the benefits like the recognised canteens. This is a wrong
approach to the issue. We have already held that non-statutory recognised
canteens in t~e instant case are not similar to the non-statutory recognised C
.- canteens considered in M.M.R. Khan's case (supra). If the workers in the
non-statutory recognised canteens themselves cannot be considered to be
workmen under the Bank, by the same token, the workers employed by the
contractors, even if they are considered to be non-statutory recognised
canteens as held by the Tribunal, will not be entitled to get any benefit. It D
is only by holding that the canteens run by contractors are similar to
non-statutory recognised canteens, the Tribunal has given the same benefit
as was given to the workmen in the recognised canteens. It should also be
noticed that the various factors noticed in paragraph 38 of the 'judgment
in M.M.R. Khan's case (supra) were adverted to be this court to deny the
plea that the canteen workers "are not railway servants" in the context of E
the various provisions contained in the Railway Establishment Manual and
·other documents. The said decision rested on its own facts.

21. We, therefore, hold that the assumption made by the Tribunal
that the instant case clearly falls within the ratio laid down by this Court F
in M.M.R. Khan's case (supra), is totally unjustified and incorrect. On the
facts of this case, in the absence of any statutory or other legal obligation
and in the absence of any right in the Bank to supervise and control the
work of the detail thereof in any manner regarding the canteen workers
employed in the three types of canteens, it cannot be said that the relation-
ship of master and servant existed between the Bank and the various G
persons employed in three types of canteens. 166 Persons mentioned in the
list attached to the reference are not workmen of the Reserve Bank of India
and that they are not comparable employees employed in the officers'
lounge. Therefore, the demand for regularisation is unsustainable and they
are not entitled to any relief. We hold that the award passes by the Tribunal H
I

j
1192 SUPREME COURT REPORTS [1996] 2 S.C.R.

A is factually and legally unsustainable.
22. Before concluding the case, we should advert to the decision of
this Court reported in Parimal Chandra Rah a v. Life Insurance C01poration ·
of India, (Supra) brought to our notice. Both sides extensively referred to
this judgment to reinforce their plea. After adverting to the earlier
B decisions, this Court has summarised the law in paragraph 27 of the
judgment thus :

'What emerges from the statute law and the judicial decisions is
--
as follows:
c (i) Where, as under the proVIs10ns 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.
D
(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 and
the workers working in the canteen, the employees of the manage-
ment. The obligation to provide a canteen has to be distinguished
E
from the obligation to provide facilities to run canteen. The can-
teen run pursuant to the latter obligation, does not become a part
of the establishment.

(iii) The obligation to provide canteen may be explicit or implicit.
F 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
G
determined on the facts and circumstances in each case.

Where to provide canteen services has become a part 0£ the
service conditions of the employees, the canteen becomes a part
of the establishment and the workers in such canteen become the
H employees of the management.
\ RESERVE BANK OF INDIA v. THEIR WORKMEN (PARIPOOE.NAN, J.] 1193

(iv) Whether a particular facility or service has become implicitly A
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 .B
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
continuously 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 C
service, the contribution made by the management in the form of
infrastructure and funds for making the service available etc."

Counsel for the appellant Mr. Salve submitted that propositions No. 3 and
4 contained in paragraph 27 of the judgment are very wide and require
reconsideration and appropriate modification, whereas Mr. Tarkunde, D
Counsel for respondents submitted that propositions No. 3 and 4 lay down
the law correctly. It is unnecessary, on the facts of this case, to consider to
what extent propositions No. 3 and 4 require to be clarified or modified,
since in this case the Tribunal has proceeded only on the basis that the
instant case clearly falls within the ratio laid down by the Court in M.M.R. E
Khan.'s case (supra), which we have held is a totally wrong perspective. In
these circumstances, we are not called upon to consider the rival pleas
regarding the scope and ambit of propositions No. 3 and 4 contained in
para 27.of the judgment in Parimal Chandra Raha's case (supra).

We set aside the award passed by the Tribunal. This appeal is F
allowed. There shall be no order as to costs.

v.s.s Appeal allowed.