UNION OF INDIA Vs. M ASLAM

JUDGEMENT

(1.) Union of India is the appellant in all these appeals and these appeals are directed against the orders of different Central Administrative Tribunals. The respondents are the employees of the Unit-Run-Canteens which provide canteen facilities to the troops at the unit level. Applications before the Central Administrative Tribunals were filed by these employees claiming benefits as regular defence personnel employees or at least as civilin employees serving under the Ministry of Defence on the allegation that the Unit-Run-Canteens are part of the Canteen Stores Department and since the Canteen Stores Department forms a part of the Government in the Ministry of Defence there is no reason as to why the Unit-Run-Canteens should not be held to be a part of Ministry of Defence. On behalf of Union of India the jurisdiction of the Tribunal was assailed on the ground that these employees cannot be held to be the Government employees and consequently the Tribunal did not have the jurisdiction to entertain the applications and decide the grievances of the employees. According to the Union of India the Unit-Run-Canteens are operated by the non-public funds and the expenditure required to run the Unit Canteens is made out of the profits earned by the canteens itself and, therefore, so far as the personnel serving in such canteens, there is no relationship of master and servant between the Government of India and the employees, and consequently the applications before the Tribunal should be rejected. The Central Administrative Tribunals, however, at Jodhpur and Bombay took the view that the Unit-Run-Canteens are the part of defence establishment and consequently the holder of a post in the management of such canteen must be held to be connected with the Defence services. The Tribunals examined the relevant provisions made by different personnel providing all pervasive control with the Ministry of Defence and thus held that there subsist master and servant relationship between the employees serving in Unit-Run-Canteens and the Ministry of Defence and, therefore, the Tribunal retains the jurisdiction to entertain applications and decide those applications in accordance with law. Mr. Goswami, learned senior counsel appearing for the Union of India vehemently contended before us, that these Unit-Run-Canteens are different from the Canteen Stores Department and the salary of the employees serving in the Unit-Run-Canteens are not paid out of the Consolidated Fund of India but a fund created at the unit level and profit out of sales in Unit and Canteens are utilised for the payment of salary as well as for creating assets of the canteens, and consequently it is not possible to hold that there exist relationship of master and servant between the employees serving in these canteens and the Union of India in the Ministry of Defence. According to Mr. Goswami, no doubt, some amount of control is vested with the local defence personnel, be it Army, Air Force or Navy, over the employees serving in Unit-Run-Canteens, but conferment of such disciplinary control alone will not clothe the employees with the status of Government servant or servants under the Ministry of Defence and the Tribunal, therefore, committed serious error in declaring the status of these employees of Government servants. Mr. Goswami also strongly relied upon the judgment of this Court in the case of Union of India vs. Chotelal (1999) 1 SCC 554, in which case this Court has held that the Dhobis in the National Defence Academy, Khadakwasla are not Government servants, particularly because their salary is not paid out of the Consolidated Fund of India. According to Mr. Goswami, the Administrative Tribunals at Allahabad and Punjab and Haryana High Court at Chandigarh have taken contrary view so far as the status of these Unit-Run-Canteens' employees are concerned, and according to the learned counsel that constitutes a correct view.

(2.) Mr. Mohta, Mr. P. N. Mishra, senior advocates and several other learned counsel appearing for the respondents, on the other hand contended, that the Central Administrative Tribunals at Jodhpur and Bombay have taken the correct view with regard to the status of such employees. According to them the decision of this Court and the test indicated in the Life Insurance Corporation case would fully apply to the facts and circumstances of the present case and, as such, there will be no reason to hold that the employees in the Unit-Run-Canteens are not the Government servants.

(3.) In order to decide whether the employees serving in the Unit-Run-Canteens can be held to be Government servants, it is necessary to find out the mode of appointment of such employees, Rules and Regulations governing the conditions of service of such employees, fund from which such salary is paid, and other factors which really determine the existence of relationship of master and servant between the Government and the employees. In the Defence Services there are two types of canteens; (1) Canteen Stores Department, and (2) Unit-Run-Canteens. The Canteen Stores Department was in existence in this country even during pre-independence days and it has its Head Office and Base Depot in Bombay with 33 Area Depots all over the country. These Area Depots are the wholesale outlets, which serve Unit-Run-Canteens in their respective zones. The Canteen Stores Department after the independence from 1948 onwards function as a Department under the Ministry of Defence initially for 3 years on an experimental basis and later from 1950 has been working on permanent basis. We are concerned in the present case with the Unit-Run-Canteens and the status of the employees serving therein. As has been stated earlier, these Unit-Run-Canteens under their respective Commanding Officers in the three services - Army, Navy and Air Force get their articles from the wholesale outlets in Area Depot of the Canteen Stores Department and at present there exist 3400 Unit-Run-Canteens. Prior to the World War II the retail trade in the Defence Services was in the hands of the contractors. During World War II a regular cadre called Indian Canteen Code came to be formed under the Canteen Services (India) to handle retail trade in operational areas where contractors were not expected to go. After 1947, the organisation split into two : Canteen Stores Department (India) and Canteen Stores Department (Pakistan). The retail trade, however, was reverted to the contractors. But by the early fifties it was realised that the margin of profit between the wholesale price and the retail rate could be a welcome source of funds available to commanding officers for welfare purposes. Thus, the concept of unit-run canteens was born, and contractors were driven out. When Major Gen. K. S. Thimaya took over as Quarter Master General, he gave detailed thought to providing canteen facilities to the troops at the unit level. He found that retail outlets being in the hands of the unit canteen contractors, the margin between the wholesale price and retail price of goods went to the contractors whereas the amount in the hands of individual commanding officers of units in the Army, Navy and Air Force could be utilised for the welfare of the troops. The case was therefore, made out jointly for taking over of contractor run canteens by units or formation, as the case may be, so that the profits from the sale of canteen stores could be retained within the unit. Contractors, no doubt, put up considerable objection to the aforesaid proposal but the Government agreed to the proposal of General Thimaya and orders were issued. The concept of Unit-Run Canteens, therefore, became an accepted doctrine though it took considerable period for implementing change over. It goes without saying that from 1948 onwards the Canteen (for short 'CSD') functioned as a department under the Ministry of Defence, initially for three years on an experimental basis, and later from 1950 on a permanent basis and yet right up to 1977 the legal status of the same remained nebulous. For functional purposes, it was a commercial undertaking, but for actual practice it was treated as a Department of the Ministry of Defence. The result was that the terms and conditions of employees present various problems which quite often became a source of discontent and unpleasant employer-employee relations. As has been stated earlier, for effective functioning of the defence services it is absolutely necessary to provide canteen facilities through out the country and while the Canteen Stores Department serve as whole sale outlet it is the Unit-Run Canteens which serve as retail outlet. A set of Rules regulating the terms and conditions of service of the employees of Unit-Run canteens have been framed which confers all pervasive control over the employees with the authorities of Defence services. Though the funding of the Unit-Run Canteens is not made out of the Consolidated Fund of India but it is made by the Canteen Stores Department and this Department in its turn has formed a part of the Ministry of Defence, admittedly. In Parimal Chandra Raha vs. Life Insurance Corporation of India, (1995) 2 Suppl. SCC 611, the employees of different canteens in different offices of the Life Insurance Corporation whether were employees of the Corporation itself was under consideration by this Court. This Court evolved four principles which are quoted hereunder :-