1997 (7) TMI 687 - SC - Indian Laws

Supreme Court rules on Industrial Tribunal jurisdiction over canteen employees

The Supreme Court dismissed the special leave petition, ruling that the Industrial Tribunal lacked jurisdiction to adjudicate the dispute as the canteen ... Definition of 'industry' - jurisdiction of the Industrial Tribunal - workman under Section 2(s) - sovereign/governmental functions exclusion - dominant nature test - availability of remedy under Article 226 - remedy under Section 19 of the Administrative Tribunals Act - precedential application of Bangalore Water Supply & Sewerage Board v. R. RajappaJurisdiction of the Industrial Tribunal - definition of 'industry' - workman under Section 2(s) - Whether the Industrial Tribunal had jurisdiction to adjudicate the reference concerning termination of departmental canteen employees. - HELD THAT: - The Court noted the admission in the respondents' counter-affidavit that the canteen employees were holding civil posts and were paid monthly salaries and benefits. In light of that admission and the legal tests discussed for characterising an activity as an 'industry', the Court concluded that the Tribunal lacked jurisdiction to entertain the reference under Section 10(1) of the Industrial Disputes Act. The availability or applicability of service rules and the admitted status of the employees as holding civil posts excluded the dispute from the jurisdiction of the Industrial Tribunal and rendered the statutory reference inappropriate. The Court therefore held that the Tribunal's finding that it had no jurisdiction was legal and required no interference. [Paras 11]Tribunal had no jurisdiction to adjudicate the reference; Industrial Tribunal's jurisdiction is excluded.Availability of remedy under Article 226 - remedy under Section 19 of the Administrative Tribunals Act - Appropriate remedial forum for the aggrieved employees whose services were terminated. - HELD THAT: - Given the exclusion of the Industrial Tribunal's jurisdiction, the Court held that the aggrieved employees must pursue remedies appropriate to their admitted status as holders of civil posts. The Court identified the constitutional writ jurisdiction under Article 226 and the statutory remedy under Section 19 of the Administrative Tribunals Act as the proper forums for redress. The Court observed the practice of first seeking relief under Article 226 or Section 19 and thereafter resorting to special leave, and noted that the employees remain free to approach the Central Administrative Tribunal, the High Court or this Court in accordance with law. [Paras 11, 12]Aggrieved employees should seek redress under Article 226 or Section 19 of the Administrative Tribunals Act (Central Administrative Tribunal/High Court) as appropriate.Precedential application of Bangalore Water Supply & Sewerage Board v. R. Rajappa - sovereign/governmental functions exclusion - dominant nature test - Whether the ratio in Bangalore Water Supply & Sewerage Board requires departure from the view in Sub Divisional Inspector of Posts, Vaikkam v. Theyyam Joseph and whether re examination of that precedent was necessary. - HELD THAT: - The Court examined competing lines of authority, including the broad tests in Bangalore Water Supply emphasising the functional/nature of activity and the later decisions treating certain departmental activities as falling within sovereign or governmental functions. After reviewing the authorities, the Court treated T. Joseph's case as correctly applying the exclusion where service conditions and statutory/administrative rules make the employment analogous to civil posts; it did not accept the submission that Bangalore Water Supply compelled a different result on the admitted facts. The Court therefore declined to reopen or displace the applicable precedent as applied to these admitted facts. [Paras 10]Bangalore Water Supply principles do not displace the applicability of T. Joseph's approach on the facts; no re examination required in this case.Final Conclusion: Special Leave Petition dismissed; on the admitted facts the Industrial Tribunal lacked jurisdiction to adjudicate the dispute concerning the departmental canteen employees, who must pursue remedies available to holders of civil posts (writ jurisdiction under Article 226 or proceedings under Section 19 of the Administrative Tribunals Act / Central Administrative Tribunal). Issues Involved:1. Whether the Telephone Nigam Limited, Bombay is an 'industry' under the Industrial Disputes Act, 1947.2. Whether the employees working in the canteen are 'workmen' within the definition of Section 2(s) of the Industrial Disputes Act.3. Jurisdiction of the Tribunal to adjudicate the dispute.4. Remedies available to the dismissed employees.Issue-wise Detailed Analysis:1. Whether the Telephone Nigam Limited, Bombay is an 'industry' under the Industrial Disputes Act, 1947:The Tribunal held that the Telephone Nigam Limited, Bombay is not an 'industry' based on the judgment in Sub-Divisional Inspector of Posts, Vaikkam v. Theyyam Joseph, which stated that a departmental canteen is not an 'industry'. However, the petitioner contended that this decision was contrary to the judgment in Bangalore Water Supply & Sewerage Board v. R. Rajappa, which provided a broader interpretation of 'industry'. The Court in Bangalore Water Supply case laid down that the term 'industry' includes any systematic activity organized by cooperation between employer and employee for the production or distribution of goods and services calculated to satisfy human wants and wishes, irrespective of profit motive.2. Whether the employees working in the canteen are 'workmen' within the definition of Section 2(s) of the Industrial Disputes Act:The respondents argued that the canteen employees were not 'workmen' under Section 2(s) of the Act and were holding civil posts in the Central Government. The Tribunal concluded that the employees working in the canteen were not 'workmen' as they were paid monthly salaries devised by the Canteen Committee and were treated as holding civil posts.3. Jurisdiction of the Tribunal to adjudicate the dispute:The Tribunal held that it had no jurisdiction to adjudicate the dispute as the Telephone Nigam Limited was not an 'industry'. The Court noted that the determination of whether an establishment is an 'industry' involves considering the nature of the activity, the employer-employee relationship, and the systematic organization of the activity. The Court recognized the need to balance the competing rights of individuals and the State, and the importance of providing just, fair, and reasonable procedures for terminating employees.4. Remedies available to the dismissed employees:The Court held that since the canteen employees were holding civil posts and paid monthly salaries, the Industrial Tribunal had no jurisdiction to adjudicate the dispute under Section 10(1) of the Act. Instead, the appropriate remedy for the dismissed employees was to approach the constitutional Court under Article 226 or the Administrative Tribunal under Section 19 of the Administrative Tribunals Act. The Court emphasized that the employees could seek redressal through judicial review or common law review if no statutory rules or certified Standing Orders were applicable.Conclusion:The Supreme Court dismissed the special leave petition, holding that the Industrial Tribunal had no jurisdiction to adjudicate the dispute as the canteen employees were holding civil posts. The Court directed the dismissed employees to seek remedies through the constitutional Court or the Administrative Tribunal. The Court upheld the Tribunal's finding that the Telephone Nigam Limited was not an 'industry' and that the canteen employees were not 'workmen' under the Industrial Disputes Act. The Court emphasized the importance of providing just and fair procedures for terminating employees and ensuring their right to seek redressal through appropriate legal channels.