ALL INDIA RAILWAY INSTITUTE EMPLOYEES' ASSOCIATION THROUGH THE GENERAL SECRETARY v. UNION OF INDIA THROUGH THE CHAIRMAN

Citation: [1990] 1 S.C.R. 594

Court: Supreme Court of India

Bench: RANGANATH MISRA, P.B. SAWANT, K. RAMASWAMY

Case summary

There is further no dispute that the wages and allowances of the staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and nonstatutory recognised canteens....

Judgment text

The Judgment of the Court was delivered by SAWANT, J. This petition is filed as stated in the petition by an Association of about 2,000 employees working in 500 Railway Institutes and Clubs in various parts of the country. Their grievance, as in the case of the petitioners in the matters pertaining the Railway Canteens, is that they are not treated as railway employees. It is their case that although the Institutes/Clubs in which they work are non-statutory, they are on par with the employees in the statutory canteens run ----- to Government service without following the regular procedure. It is also contended by them that the letters of appointment offered to these employees by the respective Managing Committees make it clear that they are not to be treated as railway servants. For all these ~ reasons, these employees form a separate class and they are not comparable with any other category of staff of the Railways.

It is also IE submitted on behalf of the respondents that the analogy of the employees in railway canteens is not applicable to these employees ·• because the status of the canteen employees is itself being contested by '+ the respondents. It is lastly contended that if this Court deems it proper to treat the full time employees of the Institutes/Clubs as railway servants it will have to be left open to the Respondents to frame y such rules as it considered necessary for the efficient running of the F Institutes/Clubs and for engaging such staff as are considered necessary. If the employees concerned are then directed to be absorbed only subject to the requisite standards of age, educational qualifications etc. and only such of them as are found suitable, many of the present employees may be faced with unemployment which will not be in the interests of the employees themselves. q; ' r- 6.

After considering the respective contentions of the parties and the documents on record, we are of the view that there is a material difference between the canteens run in the Railway establishments, and the Railway Institutes and Clubs. In the first instance, the JIJ canteens are invariably a part of the establishments concerned. They RAILWAY EMP. ASSCN. v. U. 0. I. [SAWANT, J. ] 601 ----r - are run to render services during the hours of woi:k since the services, by their very nature are expected directly to assist the staff in discharging their duties efficiently. The lack of canteen-facilities is ordinarily bound to hamper and interfere with, the normal working of the staff and affect their efficiency. The importance of the services rendered by the canteens to the staff in the day-to-day discharge of their work -.. ,. . therefore needs no further emphasis. Suffice it to say that the canteen- 1 services are today regarded as a part and parcel of every establishment.

So much so that they have been made statutorily mandatory under the Factories Act, 1948 in establishments governed by the said Act where more than 250 workers are employed. The canteen-services are thus no longer looked upon as a mere welfare activity but as an essential requirement where sizable number of employees work. That is why even the Railway Administration has, by its Establishment _,J, Manual made a provision for canteens even where the Factories Act • \ does not apply, and has laid down procedure for their registration and approval and for extending to them almost the same facilities and monetary assistance as in the case of the statutory canteens. However, the same cannot be said of the Institutes and Clubs. Although for them also the Railway Establishment Manual makes provisions in the same Chapter XXVIII dealing with Staff Welfare, the provisions are of a _. -) materially different nature and pattern. In the first instance, there is no provision either for subsidy.

or loan directly from the funds of the Railway Administration. The Institutes/Clubs have to run on the membership fees and fixed grants received from the Staff Benefit Fund. The Fund consists of receipts from the forfeited provident fund - and bonus, and of fines. The grant is made as pointed out by the Respondents, to each Institute/Clubs at the rate of Rs. 14 per capita of the non-gazetted staff employed at the relevant establishment. Out of ~ this contribution, only Rs. 4 per capita are spent on the activities of the Institutes and Clubs, the rest of the amount being spent on education, relief in case of distress and sickness, sports, scouts activities and for other miscellaneous purposes. There is further no dispute that the wages and allowances of the staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and nonstatutory recognised canteens. S·A.

By their very nature further the services of the Institutes/ Clubs are availed of beyond working hours only. It is common knowledge that not all members of the Railway-staff avail of them. One has to be a member to do so by paying fees. The membership is alscfoptional. That is why most of the staff employed in the Institutes/ Clubs is part time. As has been stated by the respondents, out of about '(" 1741 employees engaged in 449 Institutes and 332 Clubs nearly half are part time employees. The services rendered by the employees are not of a uniform nature. They are engaged for different services with different, service conditions according to the requirement. The Institutes/Clubs further do not engage in uniform activities, the activities conducted by them varying depending upon the infrastruc- . f ture and the facilities available at the respective places. I 7.

What is more importance as far as the issue involved in this petition is concerned, is that the provision of the Institutes/Clubs is not mandatory. They are established as a part of the welfare measure for the Railway staff and the kind of activities they conduct depend, among other things, on the funds available to them. The activities have to be tailored to the budgets since by their very nature the funds are not only limited but keep on fluctuating. If the costs of the activities go beyond the means, they have to be curtailed. So also, while starting a new activity, it is necessary to take into account its financial implications and the capacity of the Institute/Club to raise the necessary funds. The only varying component of the funds is the membership fee which is uncertain. 8.

If as contended by the petitioner Association the workers engaged in these Institutes/Clubs are treated as Railway employees, the danger is that these welfare activities which are otherwise encouraged by the Railway Administration may in course· of time shrink and cease altogether for want of funds. This will not be in the interests of the workers themselves. One cannot lose sight of the fact that today the emoluments of government servants including those of the Railway employees, may they belong to Class IV or to a higher category, are substantial and inhibit fresh recruitment. The services rendered by a government agency, therefore, become costly and uneconomical. Compared to the services which are rendered by the Institutes/Clubs and the benefits which flow from them, an increase in their administrative expenditure which may result from granting the status of the railway employees to their workers, will be disproportionately high and forbidding.

This will also have a snow-balling effect on other welfare activities carried on by the Railways and similar activities carried on by all other organisations. We also cannot lose sight of fact that the workers engaged in the welfare activities today are drawn from the respective localities without restrictions of the qualifications of education, age etc. Whatever little scope for employmen! is available to the local population at the respective places may RAILWAY EMP. ASSCN. v. U. 0. 1. [SAWANT, J. l 603 '1 ~ also vanish with the cessation of these activities. After all, the number ' of employees who may benefit by becoming railway employees docs not today exceed 887 who are the full time employees scattered all over the country. But, they may deprive many of their bread in the presenti and in the future. For, as pointed out by the Respondents, if the Railway Service Rules are made applicable, many of the present -'\:, employees will also have to face immediate unemployment.

This is of r course yet a larger related socio-economic consideration. 9. On the facts placed before us which we have discussed above, we are also not persuaded to hold that there is a relationship of employer-employee between the Railway Administration and the employees engaged in . the Institutes and Clubs. Neither law nor facts spell out such relationship. If the present service conditions of these employees are unsatisfactory, the remedy lies elsewhere. 10. Since we are disposing of the petition on merits, it is not necessary to deal with the legal contentions raised on behalf of the Respondents that the petitioner Association has no locus standi and that the petition is not maintainable for non-joinder and/or misjoinder of the parties. 11. In the result, we dismiss the Writ Petition and discharge the rule with no order as to costs. R. N. J. Petition dismissed: