Holding

Canteen employees run by Local Implementation Committees are not employees of the State Bank of India as there is no statutory or contractual obligation for the bank to run such canteens.

Summary

The State Bank of India (SBI) was challenged by its Canteen Employees' Union, which claimed that canteen staff employed by Local Implementation Committees (LIC) under SBI's welfare scheme were de facto SBI employees and should be absorbed. The Industrial Tribunal held there was no employer‑employee relationship because SBI only subsidised canteens and did not control recruitment, supervision or discipline of the canteen workers. The Union argued that SBI had an implicit or statutory obligation to provide canteen facilities, citing the Sastri Award and staff‑welfare handbook, but the Court found no such obligation in the settlements or statutes. The Supreme Court affirmed that the canteens run by LIC are non‑statutory, non‑recognised establishments and SBI has no contractual or statutory duty to run them, so the canteen workers are not SBI employees. Consequently, the appeals filed by SBI were allowed, the High Court judgment was set aside, and the Tribunal's award was dismissed. The Court also declined to revisit the maintainability of the petition in view of the earlier settlement order.

Issues considered

Whether canteen employees employed by Local Implementation Committees are employees of the State Bank of India under the Industrial Disputes Act.
Whether SBI has a statutory, contractual or implicit obligation to run canteens for its staff.
Whether the petition is maintainable after the earlier order recording the settlement in Civil Appeal No. 840/1977.

Legislation cited

Contract Labour (Regulation & Abolition) Act, 1970
Factories Act, 1948s. 46
Industrial Disputes Act, 1947s. 10, s. 25K, s. 2(k)
State Bank of India Act, 1955s. 50(3)

Subjects

industrial disputeemployer‑employee relationshipcanteen employeesstatutory obligationwelfare schemeLocal Implementation Committeeabsorptionnon‑statutory canteen

Judgment

STATE BANK OF INDIA AND ORS. A
v.
STATE BANK OF INDIA CANTEEN EMPLOYEES'
UNION (BENGAL CIRCLE) AND ORS.

APRIL 17, 2000
B
[A.P. MISRA AND M.B. SHAH, JJ.]

Labour Laws :
\
Industrial Disputes Act, 1947-Section I I-Reference-Canteen employ-
ees of State Bank of India-Claim to be absorbed as employees of State Bank C
of India-Whether maintainable-Held, No-Canteens being run at various
branches by Local Implementation Committees as per Welfare Scheme framed
by SBI-Bank not having any statutory or contractual obligation to run such
canteens.
The State Bank of India Canteen Employees' Union raised a dispute D
claiming that the canteen employees ostensibly employed by the Local
Implementation Committee as per the Scheme framed by the SBI for
providing certain amenities, were employees of the State Bank. The lndt1
trial Tribunal rejected the claim and held that there was no relationship of
employer and employee between the canteen boys appointed by the Local E
Implementation Committee run canteens and the Bank; that. the Bank
provides canteen facilities to its employees as amenities and for that pur-
pose set up of canteens by giving subsidies and the Bank has nothing to do
with the supervision or the day to day running of the canteens. Bank's
action in giving appointment to the persons rendering service in bigger
branches having staff strength of 100 and above, was held to be not F
discriminatory, it being the outcome of protected negotiations between the
parties from 1977 to 1991 as expressed in four settlem~nts between the
Bank and the Union. Employees' Union filed special leave petition against
the Award, alleging that the Bank has as obligation to provide canteen
facility as one of the staff Welfare activities prepared by the SBI on the
G
basis of Sastri Award. The Bank submitted that neither Sastri Award nor
Staff Welfare Activities provide canteen facilities to its employees and that
the appointment of the employees by the Bank is being regulated by
statutory regulations framed by the Reserve Bank of India while in the case
of canteen employees run by the LIC, the Bank does not have any control in
their appointment. H
37
38 SUPREME COURT REPORTS [2000) 3 S.C.R.
A Disposing of the matter, the Court
HELD : 1.1. Employees of the canteens, which are run at various
branches by the Local Implementation Committees as per the Welfare
Scheme framed by SBI, would not become employees of the Bank as the
Bank is not having any statutory or contractual obligation or obligation
B arising under the Award to run such canteens. [59-H 60-A]

1.2. There is no obligation upon the Bank statutory· cit otherwise • to
run the canteens. The scheme only provides for grant of subsidy, for
promoting the running of canteen and if some more cost is incurred in
running the canteen, the members of the staff working in that particular
c branch are required to bear it. The Bank is not employing the canteen
workers. The Bank is not supervising or controlling the work or the details
regarding the canteen or its employees appointed by the Local Implemen-
tation Committee. Auditing the work of Local Implementation Committee
• whether subsidy given by it is properly utilised or not also would not be a
D ground for holding that Bank is having any control in running the canteen.
Bank is not taking any disciplinary action or directing any canteen em-
ployee to do a particular work so far that purpose no scheme is laid down
by the Bank. Not only this, the recruitment by the Bank is to be made as per
the statutory rules framed by it after giving proper advertisement, test and/
or interview. As against this, for appointing a canteen employee there are
E qo rules framed by the Bank. [54-F -H; 55-A]

1.3. The canteens run by LIC in a branch having strength of less than
100 employees are non-statutory non-recognised canteens because admit-
tedly there is neither statutory provision nor any obligation arising out of
F award or contract between the employees of the Bank in running such
canteens. Finally the 4th settlement was arrived at between All India SBI
Staff ~ederation and the Bank which inter'alia provides that Bank will take
over canteens from Local Implementation Committees concerned at such
offices/branches having a minimum staff strength of 100 where the can-
teens are being run by the said Committees. Hence, contractual obligation
G is limited to that extent. For the canteens tun by the Local Implementation
Committees, there is no question of its recognition by the State Bank as in
the case of recognised canteens in the Railways where Railway Board
granted recognition to the canteen as per prescribed detail in the Railway
Establishment Manual. On the contrary, the status of canteens run by the
H Local implementation Committees would be non-statutory non-recognised
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 39

-- ). canteens. The employees of such canteens are not under the control of the
Bank and their appointments are not governed by any rules framed by the
SBI. [56-D-F]

1.4. Presuming that privilege of providing canteen facilities to the
A

employees exist, yet it would be difficult to hold that the Bank should pro-
vide the said facility by running canteen by itself. To promote canteen facili- B
ties by providing subsidy or other facilities is altogether different from run-
ning the canteen. Running of a canteen in a small branch having staff strength
less than a particular limit may not be economical, but may be a waste.
Further, whether Bank should provide canteen facilities in a branch having
staff strength of 100 or more employees on the basis of bipartite agreement
between the Bank Management and All India SBI Staff Federation, is a
c
matter of policy decision and may depend upon viability and other factors
of running of such canteens at other branches. It is for the Bank to decide in
)- which branches canteen facilities should be provided and not by the employ-
ees of the canteens run by the Local Implementation Committees. At the
most, employees of the Bank can raise such a contention. [58-F-G; 59-D] D
Resen'e Bank of India v. Workmen, [ 1996] 3 SCC 267, relied on.

M.M.R. Khan & Ors. v. Union of India, [1990] Supp. SCC 191 and
Parimal Chandra Raha & Ors. v. UC & Ors., (1995] Supp. 2 SCC 611,
distinguished. E
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 552-553 of
1994 Etc.

From the Judgment and Order dated 2.9.93 of the Calcutta High Court
in A. No. Nil of 1993 and Matter No. Nil of 1993.
)ii;
F
Shanti Bhushan, Bhaskar P. Gupta, Gopalratnarn, Buddy A Ranganadhan,
AV. Rangam, Rana Mukherjee, Mrs. Sumita Mukherjee, Goodwill lndeevar
and Jaydeep Kumar for the appearing parties.

The Judgment of the Court was delivered by.
G
SHAH, J. Leave granted, in SLP (Civil) No.7229of1999 which is filed
-I' against the Award dated 7th October, 1998 passed by Central Government
Industrial Tribunal, Calcutta in Re1erence No.2 of 1992.

Civil Appeal Nos. 552-553 of 1994 are filed against judgment and order ,
dated 2nd September, 1993 passed by the High Comt of Calcutta in Writ H
40 SUPREME COURT REPORTS [2000] 3 S.C.R.
A Application No. Nil of 1993 deciding the question - whether the employees
of the canteens of some of the branches of State Bank of India (hereinafter
referred to as 'SBI' in short) can claim to be absorbed as employees of the
State Bank of '{ndia?
--
In the said Writ Application the State Bank of India Canteen Employees'
B Union sought the relief that the canteen employees who were ostensibly
employed by the Local Implementation Committee ('LIC' for short) as per the
scheme framed by the SBI for providing certain amenities were in fact
employees of the State Bank. It was contended that canteen facilities are meant
for serving tea, meals to the employees of the bank and the salary of canteen
C employees are paid by the Implementation Committee from the funds created
by the bank for the same. It was pointed out that SBI and SBI Staff Federation
reached an agreement which is contained in the Handbook of staff welfare
activities and canteen facility is one part of such welfare activities, which is
looked after by the LIC for which funds are provided by the Central Board
of the Bank as subsidies out of its annual profits. The High Court directed that
D - the SBI is bound to treat them its employees in all the branches, where such
canteens exist and to treat them equally as employees of the bank and not to
peer at such employees through the opaque curtain of the LIC.

Further, the State Bank of India Employees' Association (Bengal Circle)
for and on behalf of employees of the canteens established in the branches of
E
the bank on the basis of welfare scheme propounded by the bank in or about
the year 1963 raised a dispute for which Government of India by order dated
September 17, 1975 made a reference to the Tribunal as under:-

"Whether the demand of the workmen of the State Bank of India
F represented by the State Bank of India Employees' Association,
Bengal Circle, for treating the staff of such canteens which are run
by the Local Implementation Committees, as workmen of State Bank
of India for giving them the same status, pay and facilities as are
available to other Class-IV employees of the Bank is justified? If so,
to what relief the workmen concerned are entitled?"
G
The Tribunal considered that - whether canteen staff should be
regarded as workmen of the Bank is a relevant or substantial dispute between
the Bank and its workmen and after considering the various facts arrived at
the conclusion that the canteen employees were workmen of the bank and they
H . would be entitled to the 'same status, pay and other facilities as are available
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 41
to other Class-IV employees of the Bank and those rights will accrue in their A
...).. favour w.e.f. 01.11.1976. That award dated 30.11.1976, known as Justice
.,...<
Moidu Award, was challenged by filing appeal bearing Civil Appeal No.840
of 1977 in this Conn, which was admitted and the operation of the Award was
stayed pending hearing and disposal of the appeal.

Pending appeal, on 31st October, 1977 the Bank and All India State
B
Bank of India Staff Federation arrived at first settlement. 111e terms of the
).- settlement inter alia provide that the Bank will take over from the concerned
Local Implementation Committees at 51 branches and offices mentioned
therein, the management and running of the staff canteens and conduct the
same in the manner provided in the scheme attached to the agreement. The c
settlement also provided that th'! Bank will provide the canteen staff, who will
be appointed and paid by the bank instead of by way of subsidy. The
agreement further provides for absorption of the canteen employees of the said
51 branches if they qualify in an interview and found physically fit in a
...- medical examination and after verification of character and antecedents in the ·n
usual manner. Thereafter between the same parties, a second settlement took
place on 17th September, 1984 which inter alia provided that the Bank will
take over from the concerned Local Implementation Committees at local head
offices, regional offices and such branches having a minimum staff strength

-
of 200 where the canteens are still being run by the said committees and
ll E
conduct the same in the manner provided in the scheme attached to the
settlement.

' ~
On the basis of the aforesaid settlements, the Civil Miscellaneous
Petition No. 39299 of 1985 in Civil Appeal No.840 of 1977 was filed before
this Court by the parties for disposal of the appeal in terms of the compromise
F
arrived at between the patties. In that application it has been inter alia stated
~
that two settlements, which have been reached between the Management and
the Staff Federation on 31.10.1977 and 17.9.1984 respectively have been acted
upon and the same are in operation and the operation of the impugned Award
is stayed by this Court. It was stated that under the circumstances, the
functioning of the canteens and the service conditions of the canteen employ- G
ees in Bengal Circle were governed by the terms of the aforementioned two
- '""(' settlements and that the said settlements have been regarded by the Manage-
ment as well as the Staff Federation to be fair and reasonable and in view of
the fact that these settlements have been in operation it was submitted that it
would be in the interest of justice to dispose of the Appeal in terms of ilie said H
42 SUPREME COURT REPORTS [20001 3 s.c.R:
A settlements in substitution of the impugned Award. It was, therefore, prayed
that the appeals be disposed of in terms of settlements dated 31.10.1977 and -~
'~
17.9.1984 "in substitution of the impugn,ed Award dated 30.11.1976 in
Reference No.63of1975 published in the Gazette of India dated 25.12.1976".
Hence, this Court passed the following order on 14.10.1985 in pending appeal
challenging Justice Moidu Award: -
B
"The settlement is recorded and the appeal is disposed of in terms of
the compromise."
~.
After disposal of the said appeal, it is contended that the unabsorbed
canteen workers fo1med union known as 'Workmen represented by the State
c Bank of India Canteen Employees' Union' in February, 1988 and they filed
an application for clarification of the order dated 14.10.1985 passed by this
Court. That application was disposed of by passing the following order: -

"Learned counsel for the applicants states that the applicants shall
D raise their dispute in the appropriate forum and this petition may
consequently be permitted to be withdrawn. This application is
accordingly allowed to be withdrawn."

Thereafter, a third settlement was arrived at on 9th January, 1991
between the Bank and All India SBI Staff Federation which inter alia provided
_JI
E that whereas, a review of such provision of canteen facility under the said t-
agreement was undertaken in 1977 and 1984 and Agreements dated the 31st
October, 1977 and 17th September, 1984 were anived at to the effect that
canteens at Local Head Offices, Zonal Offices, Specified Branches and other ,
....
Branches/Offices, where minimum staff strength was not less than 200, would
be taken over by the Bank and the staff thereat will be employed by the Bank
F
on full time basis. These settlements were in affirmation of the said under-
standing between the parties and with a view to streamline the administration
and control of canteens taken over by the Bank. It was further agreed as per
paragraph 48 of the minutes of the bipartite discussions held with the
Federation on 9th June, 1989 that the Bank will take over from the concerned
G Local Implementation Committees at such offices/branches having a minimum
staff strength of 150 on that date, where the canteens are still being run by the
said Committees, subject to the conditions that the existing premises at ,,,.._
Branches/offices are considered adequate for establishing a full fledged
canteen and conduct the same in the manner provided in the scheme attached
H to the aforesaid Agreement dated the 31st October, 1977 provided, however,
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 43
that the particulars of canteens to be so taken over and the date of such taking A
.J..
over will be decided mutually by the Bank and the Federation from time to
time. The staff canteens at Branches/offices where staff strength is less than
150 will continue to be run and managed by the Local Implementation
Committee, as hitherto, and staff thereat wilt continue to be engaged by such
committees on such terms and conditions as they may decide.
B
Subsequently, a dispute was raised by the State Bank of India Canteens
Employees' Union (Bengal Circle) and the Government by order dated
22.1.1992 made reference to the Industrial Tribunal as stated below: -

"Whether the action of the management of State Bank of India,
Alambazar Branch, in not regularising the services of the workman
c
Shri Judhisthir Debsena, as canteen boy in class-IV cadre of the bank,
and in denying him the full salary for the month of April, 1991 is
justified? If not, what relief the workman is entitled to?"

Pending the Reference, 4th settlement dated 2nd April, 1992 was arrived D
at between the parties which inter alia provided that Bank will take over from .
Local Implementation Committees concerned at such offices/branches having
a minimum staff strength of 100 where canteens are still being run by the said
committees.

Thereafter, on refusal by the Bank to absorb rest of the canteen E
employees, a writ petition was filed by the Union of canteen employees in the
High Court at Calcutta on 3.6.1993. The learned Single Judge declined to pass
any interim order and directed the S.B.I. to file affidavit. Against that order,
appeal was filed before the Division Bench of the High Court. The parties
agreed that the writ petition and the appeal be disposed of together by the
F
Division Bench. The Division Bench by its judgment dated 2.9.1993 held that
the writ petitioners being the balance of the canteen workers were entitled to
be absorbed as Bank employees.

Against that judgment, the Bank preferred Civil Appeal Nos. 552 and
553 of 1994 before this Court. At the time of hearing by order dated May 5, G
1998, this Court passed interim direction {(1998) 5 SCC 74} as under: -

"In the circumstances, taking advantage of the pendency of the
identical issue in Ref. No. 2/92 before the Central Government
Industrial Tribunal at Calcutta, instead of directin~ the parties to go
before the same Tribunal in this matter as well, to avoid delay and H
44 SUPREME COURT REPORTS [2000] 3 S.C.R.
A in the interest of both the parties, we direct the Central Government
Industrial Tribunal to expedite the hearing of Ref. No.2192 and render
the Award within six months. The parties shall avoid taking adjourn-
ments. The party, aggrieved by the Award of the Tribunal to be passed
pursuant to the direction as given above, will be at liberty to move
this Court.
B
These appeals will be listed after the disposal of the Reference
by the Central Government Industrial Tribunal as aforesaid alongwith
the SLP, if any, filed against the Award of the Central Government
Industrial Tribunal."
c In view of the aforesaid directions, it appears that the Tribunal expedited
r
the hearing of the reference in question. Preliminary objections w~re raised by
the learned counsel for the Bank to the effect that (1) since the workman was
never engaged by the management, no industrial dispute in terms of Sections
2(k) of the Industrial Disputes Act, 1947 (herein after referred to in short as
D · "the l.D. Act') exists. Under Section 2(k) there must be relationship of master
and servant between the employer and employee; the sponsoring Union is
neither a union of the employees of the Bank nor any of the employees of the
Bank is a member of the said union. (2) the Union cannot represent any
workman as it has not sufficient number of members within its fold to give
it a representative character. Against that, learned counsel for the Union
E
contended that the Bank employees are also members of the sponsoring Union
and when a reference is made under Secµon 10 of the Act there is a
presumption of existence of an industrial di8pute. He further contended that
the management should be estopped from raising this contention of
maintainability of the case inasmuch as the management did not take this point
F before this Court in SBI's case which was pending in CA No. 552-53/1994.

After discussing the contentions, the Tribunal held that it is required to
decide the reference both on point of maintainability as well as on merits. It
held that there is no relationship of employer and employee between the
Canteen boys appointed by the Local Implementation Committee (LIC) run
.
G canteens and the Bank. The Tribunal dealt with the contention that the Bank
has an obligation to maintain canteens and held that since amenity for canteen
can be provided for in various ways like through contractors, cooperative
societies or any independent body without really maintaining such canteen by
the bank, it canno.t be said to have created any obligation for the Bank to run
H canteens. The Tribunal negatived the contention of the learned counsel for the
'
)-.

S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 45
employees that in view of Justice Moidu's award passed in Reference No. 63 A
- . ,,J._ of 1975, the canteen boys are direct employees of the Bank, hence, the concern
workman should be held to be an employee of the Bank, by holding that in
that case, compromise was entered into between the parties, therefore, the
award having been substituted by the settlements, no question of the Union
claiming any right under the said award can arise.
B
Thereafter, the Tribunal considering the question - whether there is any
~ similarity between the LIC run canteens and the canteens run by the Bank -
observed that admittedly, the canteen of those branches of the Bank having
staff strength of 100 and above are directly run by the management of the
Bank and the canteens having lessor staff strength are managed by the LIC, c
formed by some of the staff of the Bank alongwith Branch Manager as ex-
officio President. From the evidence on record, the Tribunal found that the
Bank provides canteen facilities to its employees as amenities and for that
purpose set up of canteens is provided by giving subsidies by the Bank. The
canteens are run by the LIC and the Bank has nothing to do with the
D
supervision or the day to day running of the canteens. The composition of the
LIC is entirely from the members of the staff with the Branch Manager as
Ex-Officio Secretary. The control of the Bank, if any, over the LIC is limited
being its Branch Manager, Ex-Officio Secretary for accountability of proper
utilisation of the amount paid as subsidy. Such control, if it can at all be said
to be control by the Bank over the LIC, being neither effective nor all E

... pervasive no question of the canteen boys, who are employees of the LIC,
being employees of the Bank can arise. Further, regular appointment to any
post in the Bank being always proceeded by certain tests of the candidates,
the canteen boys cannot claim to be employees as they had not gone through
those tests. Therefore, the canteen boys cannot be said to be the employees F
of the Bank.

The Tribunal further negatived the contention that the Bank's action in
giving appointment to some of the persons doing same nature of work on the
basis of consideration that those persons who are rendering service in bigger
branches having the staff strength of 100 and above should be absorbed, while G
those rendering service in branches having lessor staff strength will not be
'< entitled to such regularisation, is discriminatory. The Tribunal observed that
under Section 46 of the Factories Act it is obligatory that canteens are to be
established where more than 250 workers are employed. ln Section 25 K of
the Industrial Disputes Act, 1947 provisions have been made in respect of H
..
46 SUPREME COURT REPORTS [2000] 3 S.C.R.
A those employees working in bigger establishments. Further, the discrimination,
even if there be any, being the outcome of protracted negotiations between the
parties from 1977 to 1991 as expressed in four settlements between the Bank
and the Union which represented all employees of the Bank till 1988 at least,
before the sponsoring union was born, ceases to be discriminatory as the
elements of give and take is necessary commitment in every amicable
B
settlement. The Tribunal following the decision in Reserve Bank of India v.
Workmen, [1996] 3 SCC 267 held that the employees of LIC run canteens shall
not be entitled to the regularisation as there is no relationship of employer and
employee between the Bank and the concerned workman. The Tribunal further
held that the membership of the sponsoring union being limited to persons
c who are not employees of the bank, as it transpires from evidence, the
concerned union is not permitted under law to raise an industrial dispute under
Section 2(k) of the Act. The Tribunal also considered the decisions of this
Court Hussainbhai v. The Alath Factory Thezhilali Union and Others, [1978]
4 SCC 257; M.M.R. Khan and Others v. Union of India and Others, [1990]
Supp SCC 191 and Parimal Chandra Raha v. UC of India, [1995] Supp. 2
D
611 and observed that in Hussainbhai 's case the Court considered the position
of the contractor's employee. Finally the Tribunal relied on RBI's case (Supra)
and held that unless there is any statutory obligation for the management to
provide employment to the canteen boys, no question of accepting them as
employees of the Bank can arise. Accordingly, the Tribunal held that the
E concerned employee Judhisthir Debsona was not entitled to any relief.

Against that Award of Tribunal, Employees' Union filed special leave
petition before this Court, which was listed on 14.5 .1999 and was ordered to ""
be tagged along with CA Nos. 552-53/1994.

F At the time of hearing of these appeals, the learned counsel for the )(_
parties submitted that for deciding these matters following two questions
would be required to be dealt with by this Court: -

(i) Although, it is not a statutory obligation to provide canteen,
whether it is otherwise an obligation of the bank. tQ provide
G canteen?

or

Whether it has an obligation to provide facilities to rqn the canteen?

H It is admitted position that in law if there is an obligation to provide a
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 47

canteen, the employees working in the canteen would be employees of the A
Bank. and if not, the employees working in the canteen may not become part
of the establishment.

(ii) Secondly, whether the petition for same cause of action was
maintainable after the order dated 14.10.1985 passed by this Court in Civil
Appeal No. 840/1977, wherein the award passed by Justice Moidu was B
challenged and this Court substituted the said award by passing the order -
"the settlement is recorded and the appeal is disposed of in terms of the
compromise" on the basis of application filed by the parties.

It is contended that in view of the aforesaid order it is not open to the C
employees working in the canteen to re-agitate the question that they would
become employees of the Bank.

Mr. Jaydeep Kar, learned counsel for the Employees' Union submitted
that the Bank has an obligation to provide canteen facility on the basis of Sastri
Award. For that purpose, he referred to paragraph No. 609 of the Sastri Award D
dated 26.3.1953. He also referred to the Hand-book on Staff Welfare Activities
prepared by the S.B.I. on 08.8.1963 on the basis of agreement between the
Bank and the representative of the Staff Federation, which provides for Staff
Welfare Fund and a scheme for creation, conduct and accounting procedure
of such funds.
E
As against this, Mr. Shanti Bhushan, learned senior counsel for the Bank
..,,,,_ submitted that neither Sastri Award nor Hand-book on Staff Welfare Activities
provides that it would be obligatory to S.B.I. to provide canteen facilities to
its employees. Sastri Award pertained to disputes raised by All India Bank
employees' Association and was not limited to State Bank of India. The Hand- F
book prepared by the S.B.I. for the Welfare Scheme of its employees also does
not cast any such obligation.

For appreciating the contentions raised by the learned counsel for the
parties, we would refer to the relevant part of Sastri Award upon which
reliance is placed by the learned counsel for the employees. Chapter begins G
with Item No. 8 "Right to existing terms of service". Thereafter, para No. 602
mentions that what was considered was "Right to existing terms of service
• where they are more liberal than t11ose of the awards of this Tribunal" and
paras 603 and 604 specifically deal with the demand of the Unions affiliated
to the AU-India Bank Employees' Association that "no rights as on 8.4.1951 H
48 SUPREME COURT REPORTS [2000] 3 S.C.R.
A of any employee shall be altered to the prejudice of the employee concerned
including demands of various associations of Imperial Bank of India employ-
ees with regard to the privileges in any respect whatsoever. After considering
the contentions in paras 608 and 609 it is observed as under:-

"608. If any option is to be given at all, it should be left to the
B exercise of individual discretion ofeach workman concerned, and in
our opinion the option should be exercised only once.

609. The next important question relates to the scope of this
option i.e., whether it should be only with reference to what is called
c the totality of all the pre-existing terms and the totality of all the terms
of our award. The workmen demand that distinctive groups ofbenefits
should be recognised and the choice should be given with reference
to each of such groups. The banks oppose the splitting up of the
totality of the terms of service. Several distinctive groups in relation
to the monetary benefits, present and future, and service conditions
D and other amenities do exist. In our judgment such distinctive groups
should be sorted out and a choice should be given with reference to
the pre-existing terms and the tenns of our award in relation to some
at least of the groups but taking each of them as one unit. Even the
Bank's Counsel had to admit that in evaluating the benefits of pre-
E existing terms and the terms of 9ur award there are certain service
conditions which cannot be valued in terms of money. We have
carefully considered the matter of grouping and we are of the opinion
that the grouping should be on the following lines:

(1) Pay, dearness allowance, special allowance, house rent allow-
-
F ance, and officiating allowance.

(2) Provident Fund.

(3) ·Gratuity and Pension.

G (4) Bonus.

(5) Leave Rules.

(6) Working hours and overtime.

H (7) Conditions of service other than working hours and
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 49

(8) Amenities e.g., canteen, club-house payment of taxes etc. A
We are of the opinion that no option should be given in respect of the
following groups :-

- (1) Leave Rules.
B
(2) Working hours and overtime.

(3) Conditions of service other than working hours and overtime,
and

(4) Amenities, except ~ otherwise provided for in our award.
c
We may in particular make it clear that there will be no choice in
respect of the following _items viz., "other allowances'', and "medical
relief' except as otherwise provided for in our award. 1n these matters
also the awarded terms will apply to all the workmen."
D
From the aforesaid quotation, it is apparent that the discussion in the
award with regard to the canteen facility is not confined to only employees
of the State Bank of India. Secondly, it deals with the contention that option
should be given to the employees for opting for pre-existing facilities and the
Award makes it clear that individual option should be given with regard to
items No. l to 4 namely, pay, dearness allowance and other allowances, PF, E
gratuity and pension and- bonus. However, no option should be given with
regard to the service condition for leave rules, working hours and overtime,
other conditions and amenities except as otherwise provided for in the award.
This would not mean that paragraph 609 of the Award cast any obligation that
amenities, such as canteen, club-house payment of taxes etc., must be provided
F
by the Bank. Learned counsel for the appellant failed to point out any part of
the Award which makes it obligatory for the Bank to provide canteen facilities
by running a canteen. Award only mentions what type of amenities could be
or were provided by various banks and for that it has been stated that canteen,
club-house payment of taxes etc., would be such amenities for which no option
can be given to the employees, meaning thereby if canteen facilities or other al
- ..;< amenities are provided by the Bank no choice to individual employee is to be
given because as stated in the award "there are certain service conditions
which can not be valued in terms of money". It nowhere mentions that Banks
shall proviqe canteens for its staff. Therefore, it is difficult to accept the
contention of the learned counsel for the employees that the aforesaid paras H

1
50 SUPREME COURT REPORTS [2000] 3 S.C.R.
A cast an obligation on the S.B.I. for running canteen.

The learned counsel for the employees further placed reliance on Hand-
book on the Staff Welfare Activities prepared by the S.B.I. on 08.8.1963 on
the basis of agreement between the Bank and the representative of the Staff
Federation. It provides for Staff Welfare Fund and a scheme for creation,
B conduct and accounting procedure of such funds, and the relevant part thereof
is as under:

" STAFF WELFARE FUND

Creation, Conduct and Accounting Procedure
c
(i) The Staff Welfare Fund consists of funds sanctioned annually by
the Executive Committee of the Central Board of the Bank. The funds
to the extent utilised are drawn from the charges account at the end
of the year. The funds are the property of the Bank earmarked for
D providing amenities to the staff and carrying out welfare activities for
the employees of the Bank as a whole.

(ii) It is for Central Office to allocate suitable amounts to the various
Circles to be utilised for the welfare activities in the Circles.
E
(iii) For certain welfare activities organised and/or conducted at the
Central level, separate funds are allocated by Central Office as per the
provisions made.

(iv) Welfare activities are generally of the following nature but the list
-
F is not exhaustive:-

(a) promotion of canteen facilities

(b) provision of libraries and reading rooms

G (c) encouragement of sports and games - indoor and outdoor

(d) promotion of cultural activities

(e) improved medical facilities including reservation of beds in
H hospitals and sanatoria
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 51
,). (f) establishment of holiday homes and convalescent homes A
ill'

(g) educational facilities - provision of educational scholarships
etc. to s'lns and daughters of employees and reservation of seats
in schools.

(v) At each Local Head Office there should be a Circle Welfare B
Committee to organise, conduct and supervise the welfare activities
in respect of offices located in the area covered by the Circle. One
of the main functions of the Circle Welfare Committee will be to allot
funds either generally or activity-wise for the welfare activities in the
offices located in the area covered by the. c;ircle including Central c
Office establishments. It will also be the function of the Circle
Welfare Committee to satisfy itself that funds are being utilised
properly for the purpose intended.

(vi) Local Implementation Committees should be fanned at each
Branch and also at the respective Regional Offices, Local Head D
Offices and Central Office establishments & other offices, if any, to
detennine the particular welfare activity or activities to be conducted
at their respective establishments out of the funds allocated to them
by the Circle Welfare Committee and within the heads of activities
specified. Such Local Implementation Committees will be in charge E
of the management of the welfare activities, if necessary, through sub-
committees and will also suggest which consulted by the Circle
.... ·...
Welfare Committee, the particular types of activities which should be
undertaken at the respective offices. These Committees will render
appropriate accounts of the Circle Welfare Committees every six
.:\ months or as otherwise directed. F

Promotion of Canteens - Subsidy

(11) (a) In order to provide further subsidy to staff canteen from
outside the scope of the staff welfare fund the wages of canteen
employees on a uniform scale on monthly basis : paid out of the G
...,
. Bank's Charges Account, on the basis of the number of employees
served at the canteen as shown in Annexure I at the end of this
Chapter. It may, however, be noted that it will not be in order to utilise
for the canteen any amount excess of its actual wage bill or the
prescribed ceiling as shown in Annexure-1, whichever is less. Wher- H
52 SUPREME COURT REPORTS (2000] 3 S.C.R.
A ever canteen employees are engaged by the Local, Implementation A.
:~
Committee their wages in excess of the subsidy will have to be borne
by the UC."

This hand-book also makes it clear that bank would earmark the funds
for providing amenities to the staff and carrying out welfare activities for the
B employees of the bank as a whole. Clause (iv) quoted above mentions various
welfare activities which may be carried out, such as, promotion of canteen
....(,.
facilities, provision of libraries and reading rooms, encouragement of sports
and games (indoor and outdoor), promotion of cultural activities, improved
medical facilities including reservation of beds in hospitals and sanatoriums,
c establishment of holiday homes and convalescent homes, educational facilities
which may include provision of educational scholarships etc., to sons and
daughters of employees and reservation of seats in schools. This clause (iv)
no where provides that said welfare activities are to be carried out by the Bank.
On the contrary, it has been specifically mentioned that it would promote such
facilities. Particularly for canteen the words used are "promotion of canteen
D
facilities". It nowhere provides that Bank shall establish canteens or provide
canteen facilities and that is in the consonance with the scheme of giving
subsidy for various welfare activities depending upon the requirement in
various branches. For the subsidy clause (11) quoted above provides elaborate
procedure and how much subsidy is to be given fr9m outside the scope of
E welfare fund. That amount is mentioned in Annexure-I which is at the end of
the chapter providing for subsidy based on number of employees working in
the branch and not on the basis of persons working in the canteen. For the .. -=..:
management of the canteen and other welfare activities, scheme provides that
Local Implementation Committee should be formed at each branch and also
F at the respective regional offices, local head offices and central establishment
and other offices, if any. That committee has to determine the particular J-
welfare activity or activities to be conducted at the respective establishment
out of funds allotted to them by Circle Welfare Committee. Result would be
- in some cases Local Implementation Committee may not opt for canteen
facility but may opt for sports and games, libraries and reading rooms. There
G is no compulsion on Local Implementation Committee to run canteen. With
regard to the funds provided for such welfare activities elaborate checks and
balances are kept but that would not mean that Bank is conducting such
establishment of running canteen, library, sports and games or other cultural
activities. From the aforesaid scheme it is difficult to draw any inference that
H the Bank is under any obligation to run canteens or have library or provide
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.) 53
).. for such other amenities . A
......... •
Further, this Hand-book is prepared on the basis of agreement reached
between the Bank and the representatives of the Staff Federation and the staff
federation has itself settled the dispute by four agreements dated 31.10.1977,
17.9.1984, 09.1.1991and2.4.1992 as stated above. This would also indicate
that there was no obligation on the part of the Bank to provide canteen
B
). facilities to its staff, otherwise staff federation would not have settled the
appeal against Justice Moidu' s award, which was pending before this Court,
on the basis of settlements. Further, it cannot be said that an outsider who is
not employed by the Bank, but who is working in the canteen run by the LIC
can claim that he is discriminated. Discrimination between two equals may c
arise in case where employees are appointed by the Bank.

Further, as there was no statutory, legal or contractual obligation of the
Bank to run the canteen or provide for canteen in its branches, the Tribunal
was right in relying upon the decision in R.B.l's case (supra). In that case,
D
three different categories of canteens [Canteens run by the Implementation
Committee, Cooperative Societies and Contractors] were being run and the
Reserve Bank of India was making grant by way of subsidy @ 95 per cent
of the cost incurred by the canteens for payment of salary, P.F. contribution,
gratuity, uniform etc., besides providing fuel, water, fixtures, utensils, furni-
ture, electricity, premises etc., free of charge. In the canteen run by the E
Implementation Committee (Canteen Committee), out of the 12 representa-
tives 3 of them were from the Bank-the Currency Officer, Personnel Officer
and the Officer from the Personal Policy Department. The Currency Officer
is to be appointed as the Chairman of the Canteen Committee. The Bank
.:\ relieved four employees wlio were in the Committee, two for full day and two
F
for half day to supervise the day-to-day affairs of the canteen. Further, the
Committee could not increase the strength of the canteen employees without
the permission of the Bank. The rates of eatables also could not be revised
without the consent of the Manager. They could not effect any wage revision
without the approval of the bank. The Bank was also reimbursing the expenses
incurred over the periodical medical check-up of the employees attached to the G
-r kitchen and counters. In the background of the said fal?ts and after considering
~
t!ie earlier decisions and the contentions, the Court held that: -

(a) 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 H
54 SUPREME COURT REPORTS (2000] 3 S.C.R.
A 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 particular work;

(b) In the absence of any obligation, statutory or otherwise, regarding
the running of a canteen by the Bank and the details relating thereto
B 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 persons, the works in the
canteen run by the Implementation Committee (Canteen Committee)
cannot come within the ratio laid down by this Court in MMR Khan
c case.

(c) As per the agreement 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,
hygienic and efficient manner like insistence of the quality of food,
D 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 .

. (d) 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
E supervise and control the work or the details thereof , . any manner
regarding the canteen workers employed in the three types of
canteens, it cannot be said that the relationship of master and servant
existed between the bank and the various persons employed in three
types of canteens .
. F
In the present case also, the facts are similar. There is no obligation
statutory or otherwise to run the canteens by the Bank. The scheme as stated
above only provides for grant of subsidy, for promoting running of canteen
and if some more cost is incurred in running the canteen, the members of the
staff working in that particular branch are required to bear it. The Bank is not
G employing the canteen workers. The Bank is not supervising or controlling the
work or the details regarding the canteen or its employees appointed by the
Local hnplementation Committee. Auditing the work of Local Implementation
Committee - whether subsidy given by it is properly utilised or not, also
would not be a ground for holding that Bank is having any control in running
the canteen. Bank is not taking any disciplinary action or directing any canteen
H
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 55

_,,... J. employee to do a particular work or for that purpose no scheme is laid down A
by the Bank. Not only this, the other most important aspect is 'the recruitment'
by the Bank is to be made as per the statutory rules framed by it after giving
proper advertisement, test and/or interview. As against this, for appointing a
canteen employee there are no rules framed by the Bank.

Learned counsel for the employees referred to clause (12) of the Scheme B
which provides that canteen should be run on 'no profit no loss' basis. The
)...
said clause also makes it clear that subsidy provided is only to the extent of
funds made available and that concerned members of the LIC would ensure
that articles are purchased on cash payment and no liability is incurred from
any source. It has nothing to do with the running of the canteens by the Bank. c
It is part of the scheme which provides how efficiently the LIC should run the
canteens.

t- Learned counsel for the appellants further relied upon the decision in
M.M.R. Khan and Others v. Union of India and Others, [1990) Supp. SCC 191
and submitted i:hat status of the employees of the canteen run by the LIC D
should be that on non-statutory recognised canteens as held in the said case.
In our view, that very judgment was considered by this Court in R.B.l's case
and was distinguished. Therefore, it does not require further discussion in this
-~ matter. However, it is to be stated that in that judgment itself, the Court has
observed that the canteens run by the different Railway establishments were E
Classifiable into thiee categories, namely,

._, (1) Statutory Canteens - These are canteens required to be
provided compulsorily in view of Section 46 of the Factories
Act 1948.
F
(2) Non-Statutory Recognised Canteens - These are run by any
establishment which may or may not be governed by the Act,
but which admittedly employ 250 or less than 250 employees
and hence, it is not obligatory on the Railway to maintain them.
However, they have been set up as a staff welfare measure
G
where employees exceed 100 in number. These canteens are
4(' established with prior approval and recognition of the Railway
Board as per the prescribed detailed in the Railway Establish-
ment Manual.

(3) Non-statutory Non-recognised canteens-These canteen are run H
56 SUPREME COURT REPORTS (2000] 3 S.C.R.
A at establishments under category (2) above, but employ 100 or -\__
less than 100 employees and are established without prior
...,
approval or recognition of the Railway Board. With regard to
the employees in categories (1) and (2) above, the Court held
that they are Railway employees for all purposes and they
cannot be deprived of the status merely because some other
B
employees similarly or dissimilarly situated may also claim the
same status. With regard t-0 the third category, the Court held
that employees of non-statutory non-recognised canteens are not -"-.
entitled to claim the status of the Railway servants because
Railway administration was having no control on their working.
c It also observed that no rules whatsoever were applicable to the
recruitment of the workers and their service conditions.

In the present case, in our view, the canteens run by the LIC in a branch
having strength of less than 100 employees are non-statutory non- recognised ~
canteens because admittedly there is neither statutory provision nor any
D obligation arising out of award or contract between the employees of .the Bank
in running such canteens. As stated earlier, finally the 4th settlement was
arrived at between All India SBI Staff Federation and the Bank which inter
alia provides that Bank will take over canteens from Local Implementation
Committees concerned at such offices/branches·naving a minimum staff
E strength of 100 where the canteens are still being run by the said Committees.
C'
Hence, contractual obligation is limited to that extent. For the canteens run by
the Local Implementation Committees, there is no· question of its recognition
by the State Bank as in the case of recognised canteens in the Railways where ,__,-

Railway Board granted recognition to the canteens as per prescribed detail in
the Railway Establishment Manual. On the contrary, the status of canteens run
F
by the Local Implementation Committees woul.d be non-statutory non-recog- }--
nised canteens. The employees of such canteens were not under the control
of the Bank and their appointments are not governed by any rules framed by
the SBI.

G The learned counsel for the employees further relied upon the decision
in Parimal Chandra Raha and Others v. Life Insurance Corpn. Of India and
Others, (1995] Supp 2 SCC 611 and submitted that as held in para 25 of the 1-'
said decision, it should impliedly be held that Bank was under an obligation
to provide canteen facilities to the employees as part of the service conditions.
Relevant para is as under: -
H
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 57
"What emerges from the statute law and the judicial decisions is as A
,,. )... follows:

(i) Whereas under the provisions of the Factories Act, it is statutorily
obligatory on the employer to provide and maintain canteen for
the use of his employees, the canteen becomes a part of the
establishment and, therefore, the workers employed in such B
canteen are the employees of the management.
.\..
(ii) Where, although it is not statutorily obligatory to provide a
canteen, it is otherwise an obligation on the employer to provide
a canteen, the canteen becomes a part of the establishment and
the workers working in the canteen, the employees of the
c
management. The obligation to provide a canteen has to be
distinguished from the obligation to provide facilities to run
canteen. The canteen run pursuant to the latter obligation, does
not become a part of the establishment.
D
(iii) The obligation to provide canteen may be explicit or implicit.
Where the obligation is not explicitly accepted by or cast upon
the employer either by an agreement or an award, etc., it may
be inferred from the circumstances, and the provisions of the
;...
canteen may be held to have become a part of the service
E
conditions of the employees. Whether the provision for canteen

--
service has become a part of the service conditions or not, is a
question of fact to be determined on the facts and circumstances
in each case.

Where to provide canteen services has become a part of the F
service conditions of the employees, the canteen becomes a part
-0f the establishment and the workers in such canteen become
the employees of the management.

(iv) Whether a particular facility or service has become implicitly
part of the service conditions of the employees or not, will G
depend, among others, on the nature of the service/facility, the
"'(
contribution the service in question makes to the efficiency of
the employees and the establishment, whether the service is
available as a matter of right to all the employees in their
capacity as employees and nothing more, the number of em- H
58 SUPREME COURT REPORTS [2000] 3 S.C.R.
A ployees employed in the establishment and the ntJmber 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 service, the contribution made
B
by the management in the form of infrastructure and funds for
making the service available etc."

As stated above, in the present case there is no statutory or otherwise
obligation of the employer to provide the canteen. Therefore, the aforesaid
c decision would have no bearing. However, the learned counsel for the
employees submitted that obligation to maintain canteen may be explicit or
implicit as held in the said decision and that can be inferred from the facts of
the present case as the Bank has admitted by four settlements stated above that
it would provide canteen facilities to the employees where staff strength in a
particular branch is 100 and above. He, therefore, submitted that thereafter
D
there cannot be any discrimination for remaining branches. Hence it should be
impliedly held that there is an obligation to run the canteens. In our view, this
type of inference is not possible because the SBI Staff Federation in various
settlements stated above has not considered it to be an obligation of the Bank
to run such canteens. At the most, it can be inferred that Bank has an ~
E obligation to promote running of canteens at its branches as a part of its staff
welfare activities. \.__

Further, we entirely agree with the decision rendered in the R.B.l's case
(supra) by the three-Judge Bench and the facts in the present case are similar
to the facts of that case. Presuming that privilege of providing canteen
--
F
facilities to the employees exist, yet it would be difficult to hold that the Bank }-
should provide the said facility by running canteen by itself. To promote
canteen facilities by providing subsidy or other facilities is altogether different
from running the canteen. Running of a canteen in a small branch having staff
strength less than a particular limit may not be economical, but may be a
G waste. It has been pointed out by the learned counsel for the Bank that in some
areas, staff strength may be less than 10. Further, the appointment of the
-.,...
employees by the Bank has been regulated by the State Bank of India General
Regulations, which are statutory regulations framed by the Reserve Bank of
India with previous sanction of the Central Government in exercise of powers
H ·conferred by sub-section (3) of Section 50 of the State Bank of India Act,
S.B.I. v. S.B.I. CANTEEN EMPLOYEES' UNION [SHAH, J.] 59
J.. 1955. In the case of canteen employees run by the LIC, the Bank does not have A
..- any control in their appointment and the aforesaid recruitment rules are not
required to be observed.

We may mention here that learned counsel for the employees submitted
that in such cases Court should lift the veil and find out the real situation and
if that is done it would be apparent that as a part of the service conditions Bank B
is required to provide canteen facility to its employees. We may state that there
)-
is no veil and, therefore, there is no question of lifting it. The Scheme framed
by the Bank is crystal clear. It provides that Bank shall promote certain welfare
activities for the benefit of its employees. One of such welfare activities is
promotion of canteen facility. There is a vast difference between "promotion" c
-~ and "providing".

Further, whether Bank should provide canteen facilities in a branch
').. having staff strength of 100 or more employees on the basis of bipartite
agreement between the Bank Management and All India SBI Staff Federation,
is a matter of policy decision and may depend upon viability and other factors D
of running of such canteens at other branches. It is for the Bank to decide in
which branches canteen facilities should be provided and not by the employees
of the canteens run by the Local Implementation Committees. At the most,
).. employees of the Bank can raise such a contention.
E
The learned counsel for the appellant further submitted that LIC consist
of employees of the Bank and those employees are directly under the control
of the Bank, therefore, it should be held that Bank is the employer of the
persons working in the canteen. This submission, in our view, is totally far-
fetched. Firstly, it is to be stated that in a canteen which provides facilities to
the members of the staff, outsider is not required to be included in the F
Committee or its Management. In the case RBI (Supra), the LIC not only
consisted of Bank employees but some Bank employees were required to do
full time work. Still, however, this Court has not considered that Bank was
having. any control in working of the canteens.
G
We may also state that in the present case there is no question of
""( application of provisions of the Contract Labour (Regulation & Abolition)
... Act, 1970 and, therefore, the decisions rendered by this Court interpreting the
said Act are not discussed.

We, therefore, hold that employees of the canteens which are run at H
60 SUPREME COURT REPORTS [2000] 3 S.C.R.
A various branches by the Local Implementation Committees as per the welfare
scheme framed by the SBI would not be~ome employees of the Bank as the
Bank is not having any statutory or contractual obligation or obligation arising
under the Award to run such canteens. Hence, it is not necessary to decide the
second question that fresh petition for the same cause was not maintainable
in view of the order dated 14.10.1985 passed by this Court in Civil Appeal
B
No. 840 of 1977.

In the result, appeals (CA Nos. 552-553/1994) fii.ed by the State Bank --(
of India and others are allowed and the impugned judgment and order dated
2nd September, 1993 passed by the High Court of Calcutta is quashed and set-
C aside. Appeal filed by the Workmen represented by the SBI Canteen Employ-
ees Union (Bengal Circle) against the Award dated 7th October, 1998 passed
by the Central Government Industrial Tribunal, Calcutta in Reference No.2 of
1992 is dismissed. There shall be no order as to costs.

R.A. Appeals allowed/dismissed.
D

}--