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Corporation of the City Vs. Gopal Shastri Narayan Ayyar and anr. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtMumbai High Court
Decided On
Judge
Reported in1977CriLJ889; 1977MhLJ139
AppellantCorporation of the City
RespondentGopal Shastri Narayan Ayyar and anr.
Excerpt:
- indian evidence act, 1872 section 24: [v.s. sirpurkar & deepak verma,jj] dying declaration - multiple murders by accused - dying declaration not implicating one accused - evidence of eye witnesses however completely fixing his criminal liability ocular evidence found credible held, absence of his name in dying declaration would be of no help to accused. - tnharampeth branch, nagpur and observed that the employer had failed to send an application in the prescribed form b for......for the respondent relies upon entry no. 1 in sch. ii which relates to establishment of the central government and exempts such establishments from all provisions of the act. according to the learned counsel after the passing of the banking companies (acquisition and transfer of undertakings) act 1970 (act no. 5 of 1970) the character and functioning of the schedule banks have changed and they have become establishments of the central government. bank of baroda limited is mentioned in col. 1 of first schedule to this banking companies (acquisition and transfer of undertakings) act, 1970. the newly corresponding unit as would be apparent from column 2 is bank of baroda, thus the limited character is lost and clause (d) is also abolished.5. a number of provisions were referred to in.....
Judgment:

Dighe, J.

1. This is an appeal by the Corporation of the City of Nagpur against the order of acquittal passed by the Judicial Magistrate, First Class (Corporation), Nagpur on 17th May 1974 acquitting the agent of the Bank of Baroda who was charged for an offence under Section 7(2A) of the Bombay Shops and Establishments Act. 1948. It appears that on 8-1-1974 at about 10-45 A.M. the Shop Inspector attached to the Corporation visited the premises of the Bank of Baroda. tnharampeth Branch, Nagpur and observed that the employer had failed to send an application in the prescribed Form B for. renewal of Registration Certificate in respect of his establishment for the year 1974. After going through the formalities, a challan was lodged.

2. On behalf of the accused it Was contended that the provisions of the Shops and Establishments' Act, 1948 {Act No : 79 of 1948) do not apply and as such there was no necessity of taking any such licence. It may be observed that subsequently for the same year 1974 such a licence has been asked for and granted and for subsequent years also the Bank has taken care to get such licence. However, it is desired by both the contesting parties that the matter should be decided authoritatively whether such a licence is necessary.

3. According to Section 7 of the Shops and Establishments Act, registration of establishment is to be done by sending a statement in the prescribed form together with the prescribed fees. Section 4 of the Act, provides for exemption. It is Sch. II of the Act which is referred to by Section 4 and such of the provisions as are mentioned in column 3 of that Schedule would not apply to the establishment mentioned in column 2. An 'Establishment' has been defined by Sub-section (8) of Section 2 of the Act. It means a shop and commercial establishment together with other concerns referred to with which we are not concerned in this appeal. 'Commercial establishment' has been independently defined in Sub-section (4) of Section 2 of the Act. It means an establishment which carries on any business, trade or profession or any work in connection with or incidental or ancillary to any business, trade or profession. There is no dispute that the functions of the Bank make it a commercial establishment, if we have a look at item No. 118 of Sch. II to the Shops and Establishments Act, 1948, we find Banks included in the Schedule, but column 3 will show that the provisions of Section 13 alone are exempted. Reading this entry an impression would be created that the registration certificate contemplated under Section 7 of the Act would be necessary in respect of the respondent Bank also.

4. However, the learned Counsel appearing for the respondent relies upon Entry No. 1 in Sch. II which relates to establishment of the Central Government and exempts such establishments from all provisions of the Act. According to the learned Counsel after the passing of the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (Act No. 5 of 1970) the character and functioning of the Schedule Banks have changed and they have become establishments of the Central Government. Bank of Baroda Limited is mentioned in col. 1 of First Schedule to this Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The newly corresponding unit as would be apparent from column 2 is Bank of Baroda, Thus the limited character is lost and Clause (d) is also abolished.

5. A number of provisions were referred to in the arguments by both sides in support of the rival contentions that Bank of Baroda is an establishment or is not an establishment of the Central Government. The Act came into force on 19th July 1969. Chap. II deals with transfer of the undertaking of existing Banks as specified in the First Schedule. Sub-section (1) of Section 3 lays down the formation of the corresponding new Banks as specified in the First Schedule. Sub-section (3) of Section 3 is as follows:

The entire capital of each corresponding new Bank shall stand vested in, and allotted to, the Central Government.

It is this provision and some other provisions which are strongly relied upon by the learned Counsel for the respondent for saying that the entire vesting of the properties is in the Central Government, the entire management is with the Central Government and as such the undertaking now has to be looked upon as the establishment of the Central Government.

6. The Management of corresponding new Banks is dealt with under Chap. IV of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (hereinafter referred to as the Transfer of Undertakings Act). Sub-section (1) of Section 7 speaks of the location of the Head Office. whereas Sub-section (2) lays down that the general superintendence, direction and management of the affairs and business of a corresponding new Bank shall vest in a Board of Directors which shall be entitled to exercise oil such powers and do all such acts and things as the corresponding new Bank is authorised to exercise and do. Section 8 of that Act enjoins that the new Banks are to be guided by the directions of the Central Government in regard to matters of policy involving public interest. Section 9 speaks of the power of the Central Government to make scheme after consultation with the Reserve Bank. Under Section 10 new Banks are under obligations to keep the books of accounts closed properly and get them audited with the approval of the Reserve Bank.

7. It is, therefore, argued that there is sufficient control of the Central Government on all activities of the new banks and by reason of the express provisions of Sub-section (3) of Section 3 the entire capital stands vested in the Central Government. It is therefore said that the respondent Bank of Baroda, should be looked upon as an undertaking or an establishment of the Central Government so that there was no necessity of taking any registration certificate.

8. Our enquiry with the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, however, would be incomplete if the provisions above said alone are looked into and opinion is formed thereon, The cumulative effect of all the provisions would be necessary for giving a final finding whether the new Bank is Central Government establishment or is as if a department of the Central Government directly run by it. The scheme of Chap, II would show that when the transfer of undertaking was taking place corresponding new banks were established. Provisions regarding their paid-up capital etc. was made. The establishment were vested in the Central Government, but so far as the management is concerned, it appears that there is sufficient latitude and independence for the banks to carry en their business. Sub-section (4) of Section 3 provides that the new bank shall be a body corporate with perpetual succession and common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and to contract, and may sue and be sued in its name with certain limitations, therefore, the new banks are independent corporate bodies and have their own common seal and succession. The contracts are to be independently entered into and the liabilities when sued are viewed in the name of the banks conceived as different entities.

9. In this light Section 4 of the Act is material. It is no doubt true that the previously existing undertakings were transferred-when new banks were created The provision runs as follows:

On the commencement of this Act, the undertaking of every existing bank shall be transferred to and vest in, the corresponding new bank.

The undertaking, as such, therefore is not merged in or amalgamated with the Central Government, but remains vested in the corresponding new bank which is to be looked upon as a separate unit. What is an undertaking may not be of much relevance in this appeal. The learned Counsel for. the respondent, relied Upon the observation in R.C. Cooper v. Union of India ( : [1970]3SCR530 ), In para 176 p. 6.20,'the observations are:

The undertaking of a bank will, therefore, be the entire integrated organization consisting of all property, movable or immovable and the totality of undertaking is one concept which is not divisible into components or ingredients.

10. Whatever be that concept, Section 5 of the Transfer of Undertakings Act dealing with the general effect of vesting is clear that the undertaking of each existing bank shall be deemed to include all assets, rights, powers, authorities and privileges and all property movable and immovable, cash balances, reserve funds, investments and all other rights and interests in, or arising out of such property as were immediately before the commencement of this Act is the ownership, possession, power or control of the existing, bank in relation to the undertaking. Reading of this provision would thus show that the undertaking stands vested in the new bank. Sub-section (4) of Section 5 further provides that unless otherwise expressly provided by this Act, all contracts, deeds, bonds, agreements, powers of attorney, etc. subsisting immediately before the commencement of the Act to which the existing bank was a party shall be of full force and effect against or in favour of the corresponding new bank. Similar provision in respect of pending actions seems to have been in Sub-section (5) of Section 5.

11. The Board of Directors, appointed for the management is to work on this background of the vesting of the assets etc. in the new Bank and having the same liabilities, obligations or rights as the transferor Bank had before the creation of the new Bank. Detachment of the control of the Central Government is thus apparent.

12. In this connection, we can use-fully refer to Section 11 of the Transfer of Undertakings Act under which the corresponding new bank is deemed to be an Indian Company for the purposes of the Income-tax Act, 1961. Although it is true that the undertaking is looked upon as the Indian Company for some specific purpose, namely for the purpose of Income-tax Act, it gives us an idea as to the manner in which the unit or the concern is treated by the Central Government. Section 18 of the Act provides for dissolution. There is a prohibition that winding up laws would not apply to the corresponding new bank. It further lays down that the corresponding new bank cannot be placed in liquidation save by order of the Central Government and in such manner as it may direct. Although the dissolution of the new bank is thus entirely with the Central Government the remaining provisions can be of immense use in understanding the character and function of the new banks inasmuch as with the permission of the Central Government liquidation proceedings could be started which could never have been the effect had the new banks been the concerns or the establishment of the Central Government. I do not think, therefore, that the learned Counsel for the respondent is on a sound footings when he says that the respondent-Bank is an establishment of the Central Government.

13. The learned advocate for the appellant Miss Deshpande who aptly argued her case placed reliance upon a number of decisions calculated to show that in similar concerns such as Life Insurance Corporation, State Road Transport, Hindustan Steel etc. Article 311 of the Constitution does not apply, which would have been the case had the concern been of the Central Government. Our case would have to be looked upon as standing en par by reason of the provisions of the Transfer of Undertakings Act. looked into in details so far It would be useful in this connection to look to the observations of the Bench in Subodh Ranjan Ghosh v. Sindri Fertilisers : (1957)IILLJ686Pat While dealing with the application of Arts, 311 and 320 of the Constitution to the employees of the Sindri Fertilisers Company, it was observed that in the eye of the law the Company was not the agent of the Union Government or trustee for them. As the name suggested, it was a limited Company, but it was completely owned by the Union Government. The Directors were appointed by the President, who was also authorised to remove those Directors from office in his absolute discretion. The decision, of the case, turned on the character of the company remaining as a separate legal entity having separate legal existence, as the name indicated. The provisions of the Transfer of Undertakings Act in my opinion lead us to a similar conclusion that the new banks are separate entities.

14. A study of the different entries in the Shops and Establishments Act would also be profitable. It is already seen that banks are referred to in Item 113 of Sch. II to the Act. Without that exemption, though partial, banks would be looked upon as commercial establishments having the obligation to conform in all the requirements of the Act. It could be legitimately said that the entry does not apply to the bank with which we are concerned it being a nationalised bank and that after the Act of 1970 that entry would be applicable only to the non-nationalised bank. A look at item 6-A shows that the offices of the Reserve Bank of India are exempted from the provisions of the Act. In other words without this exemption even the offices of the Reserve Bank of India would have been subjected to the obligations under the Shops and Establishments Act. If this is the inference in respect of the Reserve Bank of India I suppose it would apply with stronger force in relation to the new Banks. Item No. 91 provides for exemption in the offices of the State Bank of India in certain respects thus showing that even such an exemption would not have been available if there was no such item. It would be of interest to note that establishments of State Government, establishment of legal authority and establishments of Railway Administration are specifically exempted by Entries 2, 3 and 6 of the Second Schedule so that in their absence the Act could have been applicable to them also. On stronger reason, therefore, we should have expected an entry in the name of the nationalised bank in case any such exemption was intended.

15. I cannot, therefore, uphold the contention of the learned Counsel for the respondent that the Bank of Baroda is exempted from the provisions of the Shops and Establishments Act it being an establishment of the Central Government. Consequently, the breach with which the Bank was charged exists and en offence is proved. The judgment given by the learned Magistrate acquitting the accused cannot be upheld.

16. I must however, observe that the case before me is more as a test case and hence the finding ought not to be looked upon as a stigma or carrying the ill-effects of a defaulter, Under Section 52 of the Act minimum punishment for the breach under Section 7 is of fine of Rs. 25/-. Hence I pass the following order.

17. The order passed by the Additional Special Judicial Magistrate, First Class (Corporation), Nagpur dated 17-5-1974 is set aside. The respondent is found guilty of the offence under Section 7 read with Section 52 of the Bombay Shops and Establishments Act 1948. The respondent is fined Rs. 25/-. Four weeks' time is granted for making the payment of fine.


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