INDIAN OVERSEAS BANK versus I.O.B. STAFF CANTEEN WORKERS UNION AND ANR.

Citation: [2000] 2 S.C.R. 1212 · Decided: 11-04-2000 · Supreme Court of India · Bench: S. SAGHIR AHMAD · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

T 
A 
INDIAN OVERSEAS BANK 
~-.m
v. 
I.O.B. STAFF CANTEEN WORKERS' UNION AND ANR. 
APRIL 11, 2000 
4!11 
B 
[S. SAGHIRAHMAD AND DORAISWAMY RAJU, JJ.] 
_.......,_ 
Labour Laws : 
Industrial Disputes Act, 1947-Section 2(5), 25-0-Master servant re la-
c 
tionship-Tests to determine-Cooperative canteen for pmviding services to 
Bank staff-Bank providing all infrastructural facilities-Canteen being run 
with funrb provided by Bank-Canteen workers were enlisted under a Welfare 
Fund Scheme of the Bank-Claim of canteen workers to be treated as employ-
ees of the Bank-Whether sustainable-Held, Yes. 
D 
Constitution of India-A11icle 226-Writ jurisdiction-Scope to interfere 
with pure finding of fact. 
Canteen facilities have been provided to the staff employees and the 
departments of the Central Office of the Indian Overseas Bank. Initially, 
the canteen was run through a contractor engaged by the management of 
' 
.... 
E 
the bank but subsequently with effect from 3.1.1973, a co-operative can-
"" 
teen was promoted. The Central Office agreed to provide all infrastructural 
--
facilities such as premises, furniture, utensils, electricity, oven and burn-
ers, wash-basin, gas and cylinders and a subsidy@ Rs. 12.50 per member 
of the staff using the canteen. All the promoters were actually the serving 
F 
members of the staff of the bank. A separate account was opened in the 
name of the canteen which was operated by the promoters and periodi-
cally funds were credited to the said account by the Central Office to carry 
on the day to day administration of the bank. The staff required were 
employed by the promoters. The amount of contribution of funds and the 
subsidy was being increased from time to time depending upon the escala-
G 
tion of the costs of maintenance. The canteen was being run only with the 
funds provided by the Central Officer and the amounts realised from day 
to day receipts and neither the promoters nor any of the employees using 
the canteen otherwise had either contributed any capital or was obliged to 
_.., 
make any such contribution to make the canteen economically viable. 
H 
However, the canteen was closed \\ith effect from 26.4.1990 as the persons 
1212 
INDIAN OVERSEAS BANK v. l.O.B. STAFF CANTEEN WORKERS 
1213 
~ 
incharge of the Canteen declaring their inability to continue the canteen in 
A 
... 
the absence of further increase in the subsidy and grant to make up the 
vast difference but the bank remaining indifferent. With the closure of the 
canteen as the workers engaged were thrown out of employment, they 
claimed that the canteen employees have to be treated as the employees of 
the bank and restored to work. However, their claim was negatived by the 
B 
Central Officer, stating that except providing the facilities as well as funds 
in the nature of grant and subsidy, the staff canteen was operated only by 
the promoters and that there was no nexus or any relationship of an 
employer - employee between the management of the bank and the work-
ers of the canteen, consequently they could not be considered to be the 
c 
employees of the management. The conciliation proceedings having failed, 
the dispute was referred for adjudication by the Industrial Tribunal. An 
arrangement to run through a contractor was once again made by the 
Bank from 21.10.1992. 
The Tribunal held that there had been violation of Section 25-0( 6) of 
D 
the Industrial Disputes Act, the closure of the canteen shall be deemed to 
be illegal from the date of the closure and the workmen shall be 
entitled to all the benefits under the law for the time being in force, as if the 
canteen had not been closed and that the arrangement made by the bank 
entrusting the work to a contractor, and that also during the pendency of 
E 
the disputes before the Tribunal, it constituted an alteration in the service 
conditions of the canteen employees. The bank filed Writ Petition against 
the Award. The High Court quashed the award holding that there was 
no employer-employee relationship between the bank management 
and the canteen employees and consequently the question ofreinstatement 
F 
of the 33 canteen workers did not arise. In appeal, the Division Bench 
restored the award of the Tribunal, over ruling the decision of the 
Single Judge, holding that not only the bank had an obligation to run 
the canteen but infact was only running the canteen. These appeals 
had been filed by the bank against the judgment of the Division Bench

Excerpt shown. Read the full judgment & AI analysis in Lexace.