1. This writ petition has been filed for a writ of certiorari to quash the impugned award of the Labour Court, Kanpur, dated January 10, 1996, Annexure 1, to the writ petition and for a mandamus directing respondent 1 to treat the petitioners as their employees and pay them emoluments accordingly.

2. I have heard Sri T.P Singh and Sri B.N Singh for the petitioners and Sri V.B Upadhyaya, learned counsel for respondent 1.

3. Respondent 1 is a Government company registered under the Indian Companies Act and working under the supervision and control of the Ministry of Social Welfare, Government of India. Respondent 1 has set up a factory for manufacturing artificial limbs in which more than 700 workmen, supervisors and officers are working.

4. Respondent 1 established a canteen for the use and benefit of the workmen, supervisors and officers as stated in Para. 3 of the petition. The grievance of the petitioner is that although they are working in the canteen of respondent 1 but it is not treating them as its own employees and instead they are being treated as employees of the contractor and they are getting less salary than the regular employees of respondent 1.

5. The petitioner raised an industrial dispute which was referred to the Labour Court and the Labour Court has decided against the petitioners. Hence this petition.

6. The Labour Court in its award has held that only the appropriate Government can abolish contract labour by notification under S. 10 of the Contract Labour (Regulation and Abolition) Act, 1970, and the Labour Court has no power to do so, unless there was no genuine contract and the so-called contract was only a sham or a camouflage to hide the reality vide Gujarat Electricity Board, Thermal Power Station, Ukai, Gujarat v. Hind Mazdoor Sabha [1995 (2) L.L.N 59]. The Labour Court has held that the workers had not contended that the contract is a sham or camouflage and hence in view of the decision in Gujarat Electricity Board case (vide supra), only the appropriate Government and not the labour could abolish the contract labour and regularise the workmen.

7. Sri T.P Singh, learned counsel for the petitioner, relied on the decision of the Supreme Court in the case of Parimal Chandra Raha v. Life Insurance Corporation of India [1995 (1) L.L.N 816], Para. 27, at pages 828 and 829 of the said decision states as follows:

“What emerges from the statute law and the judicial decisions is as follows:

(i) Where, as under the provisions of the Factories Act, it is statutorily obligatory on the employer to provide and maintain canteen for the use of his employees, the canteen becomes a part of the establishment and, therefore, the workers employed in such canteen are the employees of the management.

(ii) Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer to provide a canteen, the canteen becomes a part of the establishment and the workers working in the canteen, the employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the establishment.

(iii) The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicity accepted by or cast upon the employer either by an agreement or an award, etc., it may be inferred from the circumstances, and the provisions of the canteen may be held to have become a part of the service conditions of the employees. Whether the provision for canteen services has become a part of the service conditions or not, is a question of fact to be determined on the facts and circumstances in each case.

Where to provide canteen services has become a part of the service condition of the employees, the canteen becomes a part of the establishment and the workers in such canteen become the employees of the management.

(iv) Whether a particular facility or service has become implicity a part of the service conditions of the employees or not will depend, among others, on the nature of the service/facility, the contribution the service in question makes to the efficiency of the employees and the establishment, whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the number of employees employed in the establishment and the number of employees who avail of the service, the length of time for which the service has been continuously available, the hours during which it is available, the nature and character of management, the interest taken by the employer in providing, maintaining supervising and controlling the service, the contribution made by the management in the form of infrastructure and funds for making the service available, etc.”

8. Sri T.P Singh firstly submitted that the canteen workers are the employees of respondent 1 in view of S. 46 of the Factories Act which casts a statutory obligation on respondent 1 to provide and maintain a canteen for the use of its employees, and hence the case of the petitioners comes under Cl.(i) of Para. 25 of the aforesaid decision. I cannot agree with this submission. Section 46(1) of the Factories Act states as follows:

“The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.”

9. A perusal of the above provision shows that it applies to a specified factory wherein more than two hundred and fifty workers are ordinarily employed. Thus in order to fulfil the requirement of S. 46(1) not only must there be ordinarily more than two hundred and fifty workers employed but the additional requirement is that the factory must be a specified factory. Thus it is not every factory which employs 250 workers or more which required to maintain canteen but only such factories which are specified by the State Government. This is also evident from rule 68(1) of the Uttar Pradesh Factories Rules, 1950.

10. There was no averment by the petitioner before the Labour Court or even before this Court that the factory of respondent 1 has been specified under S. 46 read with rule 68(1). Hence S. 46 of the Factories Act has no application.

11. Sri T.P Singh then contended that the case of the petitioners comes within Cl.(ii) of Para. 25 of the decision in Parimal Chandra Raha case [1995 (1) L.L.N 816] (vide supra). He relied on Cl. 29 of the Standing Orders of the establishment of respondent 1 which treats the canteen staff as an essential service. His contention is that since the canteen service is an essential service hence it is obligatory on respondent 1 to have a canteen.

12. In my opinion, a reading of Cl. 29 of the company s Standing Orders certainly gives an indication that a canteen is an essential service and hence prima facie it seems that it is obligatory on respondent 1 to have a canteen for the workmen. However, the question in the present case is whether the Labour Court has jurisdiction to declare that the workers employed by the contractor in the canteen are the employees of the principal employer, i.e, respondent 1 or not.

13. Sri V.B Upadhyaya, learned counsel for respondent 1, relied on the decision of Gujarat Electricity Board, Thermal Power Station v. Hind Mazdoor Sabha [1995 (2) L.L.N 59] (vide supra), and submitted that it is only the Central Government which can abolish the contract labour and regularise the workers and this cannot be done by the Labour Court. On the other hand, Sri T.P Singh submitted that the decision of Gujarat Electricity Board, Thermal Power Station (vide supra), has been overruled by a recent three-Judge decision of the Supreme Court in Air India Statutory Corporation v. United Labour Union [1997 (1) L.L.N 75].

14. I have carefully perused the decision of the Supreme Court in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra). In this case the facts were that the appellant had engaged contract labour but the Central Government by a notification under S. 10 of the Contract Labour (Regulation and Abolition) Act prohibited employment of contract labour for sweeping, cleaning, dusting and watching the buildings of the establishment. The question was as to whether this prohibition of contract labour by notification under S. 10 meant that the contract labour became automatically employees of the principal employer or not.

15. In Dena Nath v. National Fertilizers, Ltd. [1992 (1) L.L.N 53], the Supreme Court held that when contract labour is prohibited by a notification under S. 10 of the Act, it does not mean that the employees of the contractor automatically became employees of the principal employer. This decision of the two-Judge Bench of the Supreme Court in Dena Nath case (vide supra), has been specifically overruled by the three-Judge decision in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra), and it has been held in the latter case that, in Para. 59, at page 112 of 1997 (1) L.L.N:

“… Abolition of contract labour system ensures right to the workmen of regularisation of them as employees in the establishment in which they were hitherto working as contract labour through the contractor. The contractor stands removed from the regulation under the Act and direct relationship of ‘employer and employees’ is created between the principal employer and workmen …”

16. Thus it has been held in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra), that the consequence of abolition or contract labour by a notification under S. 10(1) of the Act is that the intermediary, i.e, the contractor is removed from the field, and direct linkage between labour and the principal employer is established. In other words on the abolition of contract labour by notification under S. 10, the employees of the contractor automatically become employees of the principal employer.

17. As regards the submission of Sri T.P Singh that the decision in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra), has overruled the two judge decision in Gujarat Electricity Board v. Hind Mazdoor Sabha [1995 (2) L.L.N 59] (vide supra), a careful perusal of these two decision shows that the larger Bench in Air India Statutory Corporation case (vide supra), had overruled the smaller Bench case in Gujarat Electricity Board case (vide supra), only to the extent that whereas the decision by the smaller Bench had held that even after abolition of contract labour by notification under S. 10, it is for the industrial adjudicator to decide on the facts of the case where the principal employer should be directed to absorb the workmen of the erstwhile contractor or not and on what terms (vide Paras. 43, 44 and 45 of the decision in Gujarat Electricity Board case). Thus the decision of the two Judge Bench of the Supreme Court in Gujarat Electricity Board case (vide supra), had held that on abolition of contract labour by notification under S. 10, there is no automatic absorption of the contract labour in the principal establishment and it is for the Labour Court to decide whether such contract labour is to be absorbed in the service of the principal employer or not, and if so on what terms.

18. This view of the two-Judge Bench in Gujarat Electricity Board case [1995 (2) L.L.N 59] (vide supra), that there is no automatic absorption of contract labour in the principal establishment on issuing of notification under S. 10, has been overruled by the three-Judge Bench of the Supreme Court in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra), and it has been held in the latter case that there is automatic absorption of contract labour on issuance of notification under S. 10.

19. However, the view in Gujarat Electricity Board case [1995 (2) L.L.N 59] (vide supra), that it is only the appropriate Government which can abolish contract labour (vide Para 33 of the said decision) has been endorsed by the larger Bench in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra). Thus in Para. 58, at page 110 of the decision in Air India Statutory Corporation case (vide supra), it has been observed:

“The Court cannot inquire into and decide the question whether employment of contract labour in any process operation or any other work in establishment should be abolished or not and it is for the appropriate Government to decide it.”

20. Hence it cannot be said that the decision in Gujarat Electricity Board case [1995 (2) L.L.N 59] (vide supra), has been entirely overruled by the decision of the larger Bench in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra). Rather, the larger Bench has specifically reiterated the view in Gujarat Electricity Board case (vide supra), that only the appropriate Government can abolish contract labour.

21. It seems that the decision in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra), has not referred to the decision of the two Judge Bench decision of the Supreme Court in Parimal Chandra Raha case [1995 (1) L.L.N 816] (vide supra). The latter decision has not gone into the question which is before us, i.e, whether the Labour Court can abolish contract labour or not. Hence the said decision cannot be regarded as an authority on this point, although the considerations mentioned in Para. 25 therein may be relevant for the appropriate Government for deciding whether to abolish contract labour under S. 10.

22. It may be noted that in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra), contract labour was not abolished by the Labour Court but by the appropriate Government. In the light of the aforesaid decision, therefore, it has to be held that there is no infirmity in the impugned award of the Labour Court, dated January 10, 1996. In my opinion, the Labour Court has rightly held that it is only the appropriate Government which can abolish con??? ???our and regularise them in the service ??? employer and this cannot be done by the Labour Court.

23. The remedy of the petitioner was to approach the appropriate Government with a prayer for abolition of contract labour under S. 10 of the Act and not to have raised an industrial dispute. The petition is, therefore, dismissed but with the observation that if the petitioners make an application to the appropriate Government under S. 10 of the Contract Labour (Regulation and Abolition) Act. The same will be decided within four months thereafter hearing the parties concerned in accordance with law.