Holding

The appellants are not railway employees; consequently, their applications were not maintainable before the Tribunal and the appeal is dismissed.

Summary

The appellants, employed as supervisors in Railway Handicraft Centres, claimed they were railway employees and sought regularisation, pay‑scales and other benefits. The Central Administrative Tribunal held that they were not railway servants because their appointments were on a fixed remuneration and commission, not under any railway recruitment rules, and therefore dismissed the petitions. The High Court affirmed the Tribunal’s decision. On appeal, the Supreme Court examined the nature of the appointments, the scheme under which the Handicraft Centres operate, and relevant precedents, concluding that the appellants were not railway employees and the Tribunal had no jurisdiction to entertain their claims. Consequently, the Court dismissed the appeal without costs. The judgment relied on earlier decisions distinguishing welfare‑scheme workers from regular railway staff.

Issues considered

Whether supervisors appointed in Railway Handicraft Centres are deemed employees of Indian Railways for service law purposes.
Whether the Central Administrative Tribunal has jurisdiction to entertain regularisation claims of such persons.
Whether the precedent set in M.M.R. Khan v. Union of India is applicable to the present facts.
Whether the appointment orders complied with railway recruitment rules and pay‑scale provisions.

Subjects

service lawregularisationrailway employeestribunal jurisdictionhandicraft centresstaff benefit fundpart‑time employmentrecruitment rules

Judgment

A PHOOL BADAN TIWARI AND ORS.
V.

UNION OF INDIA AND ORS.

APRIL 3, 2003

B [SHIVARAJ V. PATIL AND ARIJIT PASA YAT, JJ.]

Service law:

Regularisation -Handicraft Centres-To help the wives and daughters
C of Railway employees-Run with the aid of assistance received from Sta.ff
Benefit Fund constituted by Railway employees andfee collectedfrom trainees-
Persons selected and appointed to work as Supervisor-On a fixed remuneration
as also on commission to be given on bdSis of work done-Supervisors so
appointed filing 0. As in C.A. T. claiming regularization, and consequential
D benefits including pay-scaies equivalent to Railway employees, on the ground
that they were appointed by the Railway authorities-Held, it is not shown
that the appointments given to the claimants were pursuant to or under any
ofthe recruitment rules-The appointment orders indicate that the appointments
were on remuneration of a fixed sum varying from Rs. 55 lo Rs. 300 per
month and 3% supervision charges from worker's bill-The appointment orders
E issued on behalf of the Handicraft Centres are not by the Railway establishment
as such-The Tribunal rightly concluded that the applicants were not Railway
servants and as such the applications were not mainlainable before the
Tribunal-The High Court rightly did not disturb the order passed by the
Tribunal-On the facts of these cases, looking to the appointment orders of
p the appellants and the nature of work and the scheme, it cannot be said that
the appellant are Railway employees.

M.M.R. Khan and Ors. v. Union of India and Ors., 119901 (Supp. )
sec 191, held inapplicable.
G Union of India and Ors. v. J. V. Subhaiah and Ors., 119961 2 SCC 258
and All India Institute Employees' Association v. Union of India, 119901 I
SCR 594, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 272 of2001.

386
-
PHOOL BADAN TIW ARI v. U.0.1. 387
From the Judgment and Order dated 13.1.2000 of the Oelhi High Court A
in C.W.P. No. 6654 of 1999.

Anis Suhrawardy, Mrs. Shamama Anis, S. Mehdi Im11m and Vinay P.
Tripathy for the Appellants.

Mukul Rohatgi, Additional Solicitor General, S. Wasim A. Quadri, B
Mrs. Anil Katiyar for the Respondents.

The following Order of the Court was delivered:

The appellants before us in this appeal, have called in question the
validity and correctness of the order dated 13. I. 2000 passed by the High C
Court in CWP No. 6654/99. The appellants in the first instance approached
the Central Administrative Tribunal by filing O.A. No. 3099/91 and 0.A. No.
1014/93. The Tribunal dismissed both the 0. As. Not satisfied with and
aggrieved by the said orders of the Tribunal they approached the High Court
by filing the writ petition afore-mentioned. The High Court did not find any D
good reason or valid ground to take a different view than the one taken by
the Tribunal in that view the writ petition was dismissed, affirming the orders
passed by the Tribunal.

The appellants claimed that they were employees of Northern Railways
and were working as supervisors in the Handicraft Centres; they were selected E
and appointed as supervisors by the railway authorities; they have been working
as railway employees and as such they were entitled for the reliefs sought for
in the original applications before the Tribunal. In O.A. 3099/91 the appellant
No. I herein, namely, Phool Sadan Tiwari was aggrieved by the notice dated
17.12.1991 by which the President ofMahila Sewing Centre. Ghaziabad had
invited applications for filing up the post of supervisor in the Handicraft F
Centre of Ghaziabad. It was her case that when she had already been appointed
pursuant to the selection held on 1.7.1989, no fresh appointment could be
made for the same post. 0. A. No. I 014/93 was filed by the appellants and
one more person seeking the reliefs that their services be regularjsed with all
consequential benefits, declare them as railway servants, direct the respondents G
to pay them regular pay-scales with all allowances and to quash such policy/
policies which may come in the way of seeking regularisation of their services.

The Tribunal looking to the stand taken by the respondents came to the
conclusion that the appellants are not at all railway servants and they being
not railway servants the Tribunal had no jurisdiction to decide their cases, H
388 SUPREME COURT REPORTS (2003] 3 S. C.R.

A although in O.A. No. 1014/93, the Tribunal referred to the contentions of the
parties and ultimately following the order passed in O.A. No. 3099/91, holding
that it had no jurisdiction, dismissed O.A. No. 1014/93 as well. As already
noticed above, the High Court did not interfere with the orders passed by the
Tribunal.

B Mr. Anis Suhrawardy, learned counsel for the appellants urged that the
appellants have been working with the railways for long number of years,
some of them have been working for the last more than 30 years; these
Handicraft Centres are managed and controlled by railway authorities; for all
practical purposes it is the railway authorities which run these Handicraft
C Centres; the appellants have been working as regular employees of the railways
and having regard to these facts their services need to be rei;ularised. According
to him, the Tribunal as well the High Court were not right in dismissing the
claims made by the appellants. In support of his submissions the learned
counsel relied on the decision of this Court in M.MR. Khan and Ors. v.
Union of India and Ors., (1990) Supp SCC 191.
D
In opposition, Mr. Mukul Rohtagi, learned Addi. Solicitor General,
pointing out to the counter filed on behalf of the respondents and drawing
our attention to the appointment orders issued to the appellants, contended
that the Tribunal after detailed consideration of the respective contentions,
E concluded that the appellants were not employees of the railways and as such
it had no jurisdiction. The High Court, having regard to the facts and
circumstances, was right in affirming the orders passed by the Tribunal. He
added that the appellants were selected to work as supervisors in the Handicraft
Centres under a beneficially intended scheme to do good and help the wives
and daughters of the railway employees and in that scheme the appellants
F were selected and appointed to work as supervisors, not as full time employees
of the railways and not on any pay-scale but on a fixed remuneration and also
on commission to be the given on the basis of the work done. It is also
submitted that they were only part-time employees. In this view, according
to him it cannot be said that the appellants are railway employees and the
G impugned judgment is valid and justified.

We have carefully considered the respective submissions urged on behalf
of the parties. It is not shown to us that the appointment of the appellants
were pursuant to or under any of the recruitment rules. The appointment
order relating to Kamala Rani indicates that those appointment were on
H remuneration of a fixed sum varying from Rs. 55 to Rs. 300 per month, fixed
PHOOL BADAN Tl\V ARI v. U.0.1. 389
. for training and 3% supervision charges from the worker's bill. The other A
appointment order relating to Smt. Kamala Ahuja, indicates that as a result
of selection held, she has been offered appointment as a lady instructor for
teaching, cutting, sewing etc., in the Railway Handicraft Centre at Lajpat
Nagar, New Delhi. In that order it is also stated that the work centre will be
run from the assistance received from Staff Benefit Fund and the fees collected
from the trainees and it will not be a railway organisation. It is made B
specifically clear in the said order that it does not carry any privileges
admissible to railway servants. Yet another appointment order, relating to
Kumari Tulsi Rani, shows that she will not be entitled to any benefit as
admissible to the railway employees as her appointment would not be on
railways. The other appointment orders relating to the remaining appellants C
are, more or less on similar terms. In the counter filed on behalf of the
respondents, as to the working and functioning of the Handicraft Centres, in
paragraph 3 it is stated thus:

"(a) That the Lady Supervisor in the Handicraft Centre is appointed
to impart training about 2 to 3 hours daily to the wives/daughters/ D
widows of the Railway employees admitted in· Handicraft Centres.
They are paid remuneration to the tune of Rs. 300 per month from
the Staff Benefit Fund in terms of para 5(ii) of page No. 31 of Staff
Benefit Fund Rule Book. This remuneration is revised by the Central
Staff Benefit Fund Committee from time to time and at present E
remuneration is Rs. 500 P. M. The funds allotted by the Central Staff
Benefit Fund Committee for this year vide L. No. 989-E/117/2000-
2001/E-IV dated 29/30.8.2000 (copy enclosed for information as
Annexure P-1)."

It may also be noticed that the appointment orders issued on behalf of F
the Handicraft Centres are not by the Railway establishment as such. The
Tribunal in the order passed in O.A. No. 3099/91 noticed that it had no
territorial jurisdiction stating that the applicant was aggrieved by the notice
dated 17.12.1991 by which the President of the Mahila Sewing Centre,
Ghaziabad had invited applications for filling up the post of supervisor in the
Handicraft Centre, Ghaziabad, the applicant had given place of her residence G
as Ghaziabad, situated in the State of U. P., the impugned notice had also ·
been issued by the President of Mahila Sewing Centre, Ghaziabad, and that
there was nothing to indicate that any action had been taken by the officers
of the Railways located at New Delhi. The Tribunal also stated in paragraph
8 as under:
H
390 SUPREME COURT REPORTS [2003) 3 S.C.R.

A "We further notice that even though the applicant has filed a copy of
an order dated 27. 7. 89 (Annexure A-3) finding the applicant qualified
.. for the post of Lady Supervisor, the detailed order regarding the
terms of the appointment including the salary/commission has not
been filed and it is admitted by the applicant in the rejoinder that no
such detailed appointment letter was issued in her favour. We also
B find that the letter as at Annexure A-3 has been issued by the Divisional
Engineer, Northern Railways, Ghaziabad in the capacity of President
of the Haridicarft Centre, Ghaziabad and not in his official capacity,
thus supporting the contention of the respondents that the Handicarft
Centre is not a department of railways. "
c In the light of what is stated in paragraph 8, extracted above, the Tribunal
concluded that the applicant in 0.A. No. 3099/91 was not a railway servant
and as such the application was not maintainable before the Tribunal. Following
the said order the Tribunal disposed of 0.A. No: 1014/93 also as already
noticed above. In other words, the Tribunal disposed of both the 0. As.
D taking an overall view on consideration of the materials placed before it that
the applicants in those 0. As. (the appellants herein) were not the employees
of the Indian Railways and they were not even appointed by the Railway
authorities. The High Court did not disturb the said orders passed by the
Tribunal. In the absence of any material to show that the appellants were
E appointed pursuant to any rules of recruitment or orders issued by the Railways
it is difficult to accept that the appellant were the employees of the Railways.
Further the very appointment orders, to some of which we have referred to
above, clearly indicate that they were not full time or regular employees of
the Railways for the reasons more than one. No pay-scales are given in the
appointment orders, a meagre amount was fixed as remuneration per month
F and a commission to be paid on the basis of the work done. It is also on
record that they were employees on part-time basis. It is normally not
acceptable that any Government servant or Railway servant could be appointed
on a commission basis. The scheme under which the appellants were appointed
was a beneficial scheme intended to help the wives and daughters of the
Railway servants. The appellants were only given an opportunity to work as
G supervisors. Jn this situation, it is not possible to hold by virtue of such
appointments that the appellants were regular Railway employees. Once it is
concluded that they are not Railway employees, irresistible conclusion that .
follows is that the Tribunal had no jurisdiction to entertain their applications.
The judgment of this Court in the case of M. M.R. Khan (supra) in our view,
H does not help the cause of the appellants as is evident from the position made
-,-

PHOOL BADAN TIWARI v. U.0.1. 391
clear in paragraph 30, in which it is stated thus; A
"We express no opinion on the subject as to whether the employees
engaged in other welfare activities will or will not be entitled to the
status of the railway employees, since neither they nor the facts
pertaining to them are before us. Our conclusion that the employees
in the statutory canteens are entitled to succeed in their claim is based B
purely on facts peculiar to them as discussed above. If by virtue of
all these facts they are entitled to the status of railways employees
and they cannot be deprived of that status merely because some other
employees similarly or dissimilarly situated may also claim the same
status. The argument to say the least can only be described as one in
terrorem, and as any other argument of the kind has to be disregarded.
c
"
That was a case relating to the employees working in a statutory canteen.
From the very portion extracted above, it is clear that this Court did not
express any opinion as to whether the employees engaged in other welfare D
activities will or will not be entitled to the status of the railway employees.
The position as to the scope of the M.M.R. Khan's case is explained by a
three-Judge Bench of this Court in Union of India and Ors., v. J. V. Subhaiah
and Ors., [1996] 2 SCC 258. Paragraph 18 of the judgment reads:

"In other words, there is a dual control over the staff by the Society E
and the Registrar. In that behalf, the Railway Administration has no
role to play. If the subsidy is considered to be a controlling factor and
the Societies/Stores as an intervening agency or veil between the
Railway Administration and the employees, the same principle would
equally be extendible to the staff, teachers, professors appointed in
private educational institutions receiving aid from the appropriate F
State/Central Government to claim the status of government
employees. Equally, other employees appointed in other Cooperative
Stroes/Societies organised by appropriate Government would also be
entitled to the same status as government servants. Appointment to a
post or an office under the State is regulated under the statutory rules G
either by direct recruitment or appointment by promotion from lower
ladder to higher service or appointment by transfer in accordance
with the procedure prescribed and the qualifications specified. Any
appointment otherwise would be vertical transplantation into services
de hors the rules. Appointment through those institutions becomes
gateway for back - door entry into government service and would be H
'
-
392 SUPREME COURT REPORTS [2003) 3 S.C.R.

A contrary to the prescribed qualifications and other conditions and
recruitment by Public Service Commission or appropriate agencies.
As contended, if the employees of the societies like cooperative
canteens are declared to be Railway servants, there would arise dual
control over them by the Registrar and Railway Administration but
'
the same was not brought to the attention of the Court when M. M.
B R. Khan case was decided. "

In All India Institute Employees' Association v. Union of India, [ 1990]
SCR 594, this Court held that there is a material difference between the
canteens run in the railway establishment and institutes and clubs and the
C benefit given to the railway employees were not extended to the employees
working in the railway clubs. In the case on hand, the appellants are working
in Handicraft Centres under a scheme of the Railway Department but that
does not make them the railway employees. Be that as it may, on the facts
of these cases, as already observed looking to the appointment orders of the
appellants and the nature of work and the scheme, it is not possible to say
D that the appellants are railway employees. This being the position, the Tribunal
was right and the High Court rightly did not interfere with the orders passed
by the Tribunal. Under the circumstances, we do not find any merit in this
appeal. As such it is dismissed but with no order as to costs.

R.P. Appeal dismissed.