BALWANT RAI SALUJA ETC. ETC & Anr. v. AIR INDIALTD & Ors.
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14 S.C.R. 1512 A BALWANT RAI SALUJA &ANR. ETC. ETC. B C D v. AIR INDIALTD. &ORS. (Civil Appeal Nos. 10264-10266 of 2013) I AUGUST 25, 2014 [H. L. DATTU, R. K. AGRAWAL AND ARLIN MISHRA, JJ.] Facfories Act, 1948- S. 46- Deihl Factory Rules, 1950 - rr. 65-70-A Company (principal establishment) required to run a canteen in compliance of s. 46-.,. Canteen employees employed by the contractorcompany-Whetherthe workmen engaged in the statutory canteen through the contractor could be treated as employees of the principal establishment - Held: The contractor company is a separate legal entity and its primary objects have not direct relation with the principal establishment - The principal company established also does not have effective and absolute control over the workmen of the canteen - The contractor company is not a $ham or camouflage created by the principal establishment - E Therefore, the workmen of the statutory canteen would be workmen of the principal establis~ment only for the purpose of 1948 Act, and not for all other purposes - Hence the workers cannot claim regularization in their employment from the principal establishment- LabourLaws. F G · - Precedence - Precedent value of a decision - Extent of- Held: Binding nature of a decision would extend to only observations on points raised and decided - The observation on a legal point which arose in a manner not requiring any decision, has to ·be considered merely as an obiter dictum In order to have binding effect, a decisio(J ne.ed n·ot be rendered by a Full Court or Constitution Bench of Supreme Court-A pronouncement by a Division Bench is binding on 1512 BALWANTRAI SALUJA&ANR. ETC. ETC. v.AIRINDIA 1513 LTD.&ORS. · a Division Bench or a smaller number of Judges - A Constitution of India, 1950-Art. 141. Doctrines/Principles: Doctrine of piercing the corporate veil - Applicability of- Discussed. s Answering the referred question and dismissing the appeals, the Court · HELD: 1.1. The workmen of a statutory canteeh would be the workmen of the establishment for the C purpose of the Factories Act, 1948 only and not for all other purposes. The statutory obligation created under _Section 46 of the Act, 1948, although establishes certain· liability of the principal employer towards the. workers employed in the given canteen facility, this must be restricted only to the Act, 1948 and it does not govern the rights of employees with reference to appointment, seniority, promotion, dismissal, disciplinary actions, retirement benefits;·etc., which hare the subject matter of various other legislations, policies, etc. Therefore, it cannot be said that the employees of the statutory E Canteen ipso-facto become the employees of the principal employer. [Para 38][1540-B-F] 0 Indian Petrochemicals Corpn. Ltd. v. Shramik Sena (1999) 6 sec 439:1999 (1) Suppl. SCR 47; Hari Shankar Sharma v. Artificial Limbs Mfg. Corpn. (2002) 1 SCC 337; Reserve Bank of India v. Workmen (1996) 3 SCC 267: 1996 (2) SCR 1176; Haldia Refinery Canteen Employees Union v. Indian Oil Corpn. Ltd. (2005) 5 SCC 51: 2005 (3) SCR 972; Indian Overseas Bank v. · 1.0.B. Staff Canteen Workers' Union &Anr. (2000) . 4 SCC 245 : 2000 (2) SCR 1212; Barat Fritz Werner Ltd. v. State of Karnataka 2001 (4) SCC . 498 : 2001 (1) SCR 835 - relied on. F G H 1514 SUPREME COURT REPORTS [2014]14 S.C.R. A B c Saraspur Mills Co. Ltd. v. Raman/al Chiman/a/ (1974) 3 sec 66:1973 (3) scR 967; Hussainbhai v. Alath Factory Thezhila/i Union (1978) 4 sec 257: 1978 (3) SCR 1073; M.M.R. Khan v. Union of India 1990 Supp SCC 191- distinguished. ·· ' Parimal Chandra Raha v. UC 1995 Supp (2) SCC 611 : 1995 (3) SCR 34; Workmen v. Coates of India Ltd. (2004) 3 SCC 547; · Basti Sugar Mills Ltd. v. Ram Ujagar and Ors. (1964) 2 SCR 838; Ahmedabad Mfg. and Calico Printing Co. Ltd., . v. Their Workmen (1953) II LLJ 647 - referred . · to.
1.2 .. The said workers, to be called the employees 0 of the factory for all ·purposes, they would need to satisfy the test of employer-employee relationship and · it must be shown"tfiat the employer exercises absolute and effective control over the said workers. [Para 87][1563-A-B] . , . I . . . . E t.3. To. ascertain whether the workers of the Contractor can be treated as the employees of the factory or company on whose premises they run the said statutory canteen, this Court must apply the test of complete administrative control. Furthermore, it would F be necessary to show that there exists an employer . I employee relationship between the factory and - the, . workmen working in the canteen. the relevant factors to be taken into consideration to establish an employer-employee relationship would include, inter. G alia, (i) 'who appoints the workers; (ii) who pays the salary/remuneration; (iii) who has the authority to dismiss; (iv) who can take disciplinary action; (v) whether there is continuity of service;· and (vi) [Paras 49 and extent of control and supervision. H 61][1546-8-C; 1552-C-D] ' BALWANT RAI SALUJA&ANR. ETC. ETC. v.AIR INDIA LTD.&ORS .. 1515
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