P.K.BALASUBRAMANYAN, J. - (1.) The Bokaro Steel Ltd. was incorporated in the year 1961 under Section 617 of the Companies Act, 1956, for establishing a steel plant in the undivided State of Bihar. A large number of engineering, managerial, legal and clerical staff were employed and other workers were engaged. Even at the project stage, in the year 1962, the employees of the establishment formed a co- operative society known as the "Bokaro Steel Product Employees Co-operative Consumers Stores Ltd." It was subsequently registered under the Bihar Co-operative Societies Act and its registration No. was BGS 1/73. The society was registered with the object of promoting the common interest of its members and for providing various facilities to its members. The name of the Co-operative Society was subsequently changed by amending the bye-laws and it came to be known as "The Bokaro Steel City Central Consumers Co-operative Stores, Ltd." (hereinafter referred to as the society). The society in its turn engaged certain workers or took in some employees. In the year 1995, a demand was made to the Bokaro Steel Ltd. (hereinafter referred to as the company) to absorb the workers of the society as employees of the company or to regularise them as the employees of the company. The company not having acceded to the request, the workers of the society through their union, filed a writ petition, C.W.J.C. No. 690 of 1997 in the High Court of Patna. The prayer therein was for the issue of a writ of mandamus commanding the company to absorb the employees of the society in the services of the company and to make payment of salary and extend other benefits similar to that of those working in the company. By judgment, dated 7/12/1998, a learned single Judge of the Patna High Court, declined to interfere taking the view that the questions sought to be raised were the questions of fact and they could more appropriately be decided in the forum created by the Industrial Disputes Act. Feeling dissatisfied with that decision, the union filed an appeal, L.P. A. No. 18 of 1999. The appeal was heard by the Ranchi Bench of the Patna High Court. The appeal was dismissed by judgment, dated 15/09/1999, agreeing with the view of the learned single Judge that the question had to be got 5 decided by invoking the provisions of the Industrial Disputes Act. The union challenged the said dismissal before the Supreme Court in Civil .Appeal No. 4268 of 2000. By judgment, dated 18/08/2000, the Supreme Court set 10 aside the decisions of the learned single Judge and that of the Division Bench and remanded the writ petition to the High Court for deciding the claim of the union on merits. Thereafter a learned single Judge, by judgment, dated IS 7/12/2001, reported in 2002 (1) J.L. J.R. 166 held that the writ-petitioner-union was not entitled of the reliefs sought for and the employees of the society were not the employees of the company. The union filed the 20 present appeal before the Division Bench challenging the decision of the learned single judge. By judgment, dated January 10, 2002, the Division Bench, agreeing with the decision of the learned single Judge, dismissed the 25 appeal, after hearing counsel for the union. This dismissal was again challenged by the union before the Supreme Court in petition for special leave to Appeal (Civil) No. 1771 of 2002 and the Supreme Court by judgment, 30 dated December 5, 2002, allowed the appeal and setting aside the decision of the Division Bench remanded the Letters Patent Appeal to the Division Bench of the High Court for disposal of the same on merits, requesting the 35High Court to dispose of the same expeditiously. It is pursuant to this order of remand by the Supreme Court that this appeal has again come up before us. With the consent of the counsel appearing on both sides, and in 40 view of the direction of the Supreme Court, the entire matter was heard in detail and the same is being disposed of finally by this judgment.
(2.) The case of the union is that that affairs 45 of the society are directly managed and controlled by the management of the company and the society is associated with the overall management and supply of essential commodities like, food articles and other Court. commodities for consumption. The supply was being made to the employees of the company. The company provided finance, accommodation, transportation, payment of salary to the workers of the society and other facilities including allotment of quarters, supply of electricity, etc. The workers of the society were working for more than ten years in various posts. Since the society, from its very inception, was providing essential commodities to the employees of the company and the running of the society was really incidental to the running business or the industry of the company. The nature of the work was an indispensable one. The company had even recognised that fact in a bipartite agreement. The company had an obligation to supply the commodities and the company had agreed to continue the existing facilities such as providing of working capital, free transportation and so on. The management of the company had full administrative control over the affairs of the society. The company had, as per the by-laws of the society, the right to nominate the Chairman, the Secretary and the treasurer of the society. The managing committee in which was vested the authority to carry on the business of the society, was controlled by the Chairman. Thus, the company had full and pervasive control over the affairs of the society. The shops of the society throughout the industrial area of Bokaro were operating only by virtue of allotment of space made by the management of the company and the allotment of the shops to the society was made by the company as per the rules of the company. The conduct of the company also indicated that it had even objected to an administrator being appointed under the Bihar Co-operative Societies Act, unless the administrator was himself an officer of the company. The company was making payments to the society under the head " subsidy" and that fund was used for payment of wages and other allowances to the employees of the society. It was impossible for the society to function without financial assistance from the company. The company also provided finances for purchases of essential commodities in the form of loans and refundable advances. The amount of subsidy was enhanced whenever it was felt necessary to do so, to meet the obligations of the society. The company had also provided fidelity insurance cover to the employees of the society and had insured all the employees of the society. The properties of the society had also been insured by the company. Thus, the company provided complete finance to run the shops of the society. Even the retirement dues were paid with the funds provided by the company and only after obtaining clearance from the company. Even the dues of the employees to the society were being adjusted against retirement benefits due to the employees of the company. In view of this, the workers of the society were really the workers of the company and the formation of the society and the entrusting of supply of essential commodities to it, was only a veil to cover up the fact that the workers of the society were the workers of the company and the Court was entitled to pierce the veil and direct the absorption of the workers of the society as workers of the company.
(3.) The company resisted this claim contending that the society was an independent co-operative society registered under the Co- operative Societies Act and it was governed by its by-laws and the provisions of the Co- operative Societies Act. The jurisdiction vested with the authority under the Act to ensure that the society conducted itself in terms of the Co-operative Societies Act and in terms of the bye-laws of the Society registered under Section 14 of the Co- operative Societies Act. The membership of the society was not confined to the employees of the company. Even the employees of other Government undertakings situated in Bokaro could be the members of the society. Bye-law 7 provided for this. The managing committee of the society had 15 members as provided in bye-law 33 and out of the 15, the company had only a conditional right to nominate three members. The company had no control, leave alone, deep and pervasive control over the affairs of the society. There was no relationship of master and servant between the company and the workers of the society. The authority under the Co-operative Societies Act had the authority over the employees of the society as well as over the society. The company had no right or control over the employees of the society. The fact that the company used to lend money to society or paid subsidy to the society would not lead to the position that the company had administrative or financial control over the society. Insuring of the goods of the society and of the employees of the society was undertaken since substantial amounts were due to the company from the society, the society not having repaid the various loans taken by it and it was necessary for protection of the company and the amounts due to it. There was no statutory obligation on the company to run a store or to supply articles to the employees of the company. The venture was that of the employees only. Thus, a company had no obligation to absorb all the workers of the society as the workers of the company. The writ petition was misconceived and was liable to be dismissed.;