BALWANT RAI SALUJA &ANR. ETC. ETC. versus AIR INDIALTD. & ORS.

Citation: [2014] 14 S.C.R. 1512 · Decided: 25-08-2014 · Supreme Court of India · Bench: H.L. DATTU · Disposal: Dismissed
Cited by 2 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

[2014] 14 S.C.R. 1512 
A 
BALWANT RAI SALUJA &ANR. ETC. ETC. 
v. 
AIR INDIALTD. &ORS. 
(Civil Appeal Nos. 10264-10266 of 2013) 
I 
AUGUST 25, 2014 
B 
[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 
C 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 
D 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 
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 
G · - 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 0 
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] 
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 
A 
B 
c 
SUPREME COURT REPORTS 
[2014]14 S.C.R. 
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 
. 
. 
I 
factory or company on whose premises they run the 
said statutory canteen, this Court must apply the test o
Excerpt shown. Read the full judgment & AI analysis in Lexace.