RADHU K. KAKDE OF BOMBAY INHABITANT, BOMBAY versus UNION OF INDIA & ORS.

Citation: [1985] SUPP. 3 S.C.R. 822 · Decided: 11-12-1985 · Supreme Court of India · Bench: V. BALAKRISHNA ERADI · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
H 
822 
RADllll K. KAKllE OF l!OMBAY INHABITA!<'r, l!OMBAY 
v. 
UNION OF INDIA & ORS. 
DECEMllER 11, 1985 
[V. BALAKRISHNA ERADI, R.B. MISRA AND V. KHALID, JJ.] 
Paianent of Bonus Act, 1965 section 32(iv), scope of -
Whether the Canteen Stores Departn>ant (India) under the Ministry 
of Defence is an "establishn>ant" engaged in any industry carried 
on by or under the authority of any Department of the Central 
Governn>ant and therefore, covered by the provisions of section 
32(iv) of the Act. 
Prior to July 1, 1942, canteen facilities had been provided 
to the anned forces of the country by a company known as "Canteen 
Contractors' Syndicate". On June 13, 1942 the defence department 
took over the business of the said company and it was run by the 
Governn>ant of lndis under the title and name "Canteen Stores 
Department". After partition of the country, the Canteen Stores 
Department of undivided India was wound up and its termiDal 
profits were distributed between India and Pakistan and lndis 1 s 
share fotmed 
the working capital for 
the Canteen Stores 
Department 
(India), 
which 
was 
formally 
inaugurated 
as 
a 
"Governn>ant of lndis Ulldertaking" for a perioJ of three years in 
the first instance c..,_ncfng from January 1, 
1948. 
The 
recruitment rules for the various categories of services of the 
Canteen Stores Department (India) were notified by the president 
by the Ministry of Defence letter dated June 28, 1973. By 8110ther 
letter dated January 28, 1969, Government orders as applicable to 
defence (Civilians) were made applicable to the Canteen Stores 
Department (lndis) employees in toto automatically from the date 
of their applications to Defence (Civilians). Canteen Stores 
Department (lndis) was allowed to tender military credit notes 
for payn>ant of railway freight by the Governn>ant of lndis 
(Ministry of Railways) Memorandum dated Februsry 28, 
1971 
addressed to the Ministry of defence. When the question of 
applicability of section 32(iv) of the Payn>ant of Bonus Act, 1965 
C8llle up before the Division Bench of the High Court of Bombay, 
the High Court held that the ezemption provided in that section 
is attracted ina81111Ch as the Canteen Stores Department is an 
establishment engaged in an industry carried on by or under the 
authority of a department of a Central Governn>ant. Hence the 
appeal by specisl leave. 
R,K. KAl<DE v. U,O,I, [ERADI, J,] 
823 
DiSJDissing the appeal, the Court, 
HELD: In the light of all the facts pertaining to the 
history, organisational structure, exercise of functional control 
by Government authorities and the special nsture . of service 
rendered by the Canteen Stores Department (lDdia) to the defence 
A 
forces of the country, it is an "establishment" engaged in an 
B 
industry carried on by or under the authority of a department of 
the Central Government nsmely, the Ministry of Defence, (826 C-£] 
lasbtriya Mill !lazdoor Sangh, Nagpur v. 1be lloclel Hills, 
Nagpur and Anr., [1985] l s.c.R. 751 applied. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No, 484 of 
975, 
From the Judgment and Order dated 25.6.1973 of the Bombay 
High Court in Special Civil Appln. No. 1189 of 1968, 
Jitendra Sharma for the Appellant. 
M.S. Gujaral, G.D. Gupta and R.N. Poddar for the Respon-
dents. 
c 
D 
The Judgment of the Court was de1.ivered by 
E 
llALAKlUSJINA 
EBADI, J, In this appeal by special leave 
against the judgment of a Division Bench of the High Court of 
Bombay, the only question raised is whether the provisions of the 
Payment of Bonus Act, 1965 (hereinafter called the 'Act') are 
applicable to the employees of the Canteen Stores Department. The 
answer to this question will 
depend upon whether the Canteen 
F 
Stores Department is an 'establishment' engaged in any industry 
carried on by or under the authority of any department of the 
. Central Government; that is because Section 32(iv) of the Act 
lays down that ''Nothing in ·this Act shall apply to - employees 
employed by an establishment engaged in any industry carried on 
by or under the authority of any department of the Central 
G 
Govermiient or a State Government or a local authority." In the 
judgment under appeal, the High Court has held that the exemption 
provided for in Section 32(iv) is attracted inasmuch as the 
Canteen Stores Department is an establishment engaged in any 
industry carried on by or under the authority of a department of 
the Central Government. The correct

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