Rama Jois, J.
1. In these four writ appeals, preferred against the orders of the single Judge dismissing the four writ petitions presented under Art. 226 of the Constitution of India, by registered owners of coffee estates under the Indian Coffee Act, 1942 (hereinafter referred to as 'the Act', the following question of law arises for consideration :
'Whether the Coffee Board, is an industry carried on by or under the authority of any Department of the Central Government or is an institution established not for purposes of profit, and consequently excepted from the application of the Payment of Bonus Act in view of cls. (iv) and (v) (c), respectively, of S. 32 of the Act ?'
2. The appellants are registered owners of coffee estates under the Act. The first respondent-Coffee Board (hereinafter referred to as 'the Board') has been brought into existence by the Act. With the approval of the Central Government, the Board decided to pay bonus to its employees under the provisions of the Payment of Bonus Act (hereinafter referred to as 'the Bonus Act'. This is indicated by the note of the Chairman (Exhibit. - A) furnished to the members of the Board. The particulars of the amounts paid as shown in the note are as follows :
1964-65 .. Rs. 1,20,1001965-66 .. Rs. 1,37,8001966-67 .. Rs. 1,53,6001967-68 .. Rs. 1,70,0001968-69 .. Rs. 1,84,000
The total amount comes to Rs. 7,657 lakhs. The appellants, who are registered owners, who are entitled to receive payments under S. 34 of the Act from the Pool Fund maintained by the Board under the Act, felt aggrieved by the payment of bonus out of the amounts credited to the Pool Fund. Hence they presented the four writ' petitions questioning the legality of utilization of amounts constituting the Pool Fund, towards payment of bonus under the Bonus Act. Their contention was that under sub-cls. (iv) and (v) (c) of S. 32 of the Bonus Act, Coffee Board is excepted from the operation of that Act and, therefore, the payment of bonus out of Pool Fund, which is payable to them and other registered planters is an unauthorized expenditure incurred by the Board. As union of India had accorded approval for the payment of bonus under the Bonus Act, it was also made a party-respondent to the writ petitions (2nd respondent in the writ appeals) and the Coffee Board Employees' Association, representing the employees of the Board also got impleaded as respondent to the writ petitions (3rd respondent in the writ appeals).
(ii) The Board and the Employees' Association contested the writ petitions. Their case was that the Bonus Act applies to the Board and it does not fall within the scope of cls. (iv) and (v) (c) of S. 32 of the Bonus Act. They also raised a preliminary objection to the effect that appellants had no locus stands to present the writ petitions.
(iii) The learned single Judge, by a common order made in the four writ petitions, upheld both the contentions urged for the respondents and dismissed the writ petitions. Aggrieved by the said orders, the appellants have presented these four writ appeals. Hence these four writ appeals, which raise common question of law set out earlier, are being disposed of by this common order.
3. Sri P. K. Kurian, learned counsel for the appellants, raised the following contentions :
(i) The Bonus Act has no application to the Board as it falls within the excepted category specified in cls. (iv) and (v) (c) of S. 32 of the Bonus Act.
(ii) The appellants being registered coffee planters have the right to question the legality of any expenditure incurred by the Board, from the Pool Fund, as that Fund consists of money payable to registered coffee planters.
(2). Elaborating the first contention, he referred to the various provisions of the Act and submitted as follows. The Board constituted under the Act falls within the meaning of the word 'authority' used in Art. 12 of the constitution and, therefore, is 'State' as defined in that Article. As it is an 'authority' falling within the definition of the word 'State' as defined in Art. 12 of the Constitution, it would be an agency of the Central Government. Therefore, it falls within the exception clause contained in cls. (iv) of S. 32 of the Bonus Act. The provisions of the Act also disclose that the Board is an institution established not for earning profit and hence it falls within the exception incorporated in cls. (v) (c) of S. 32 of the Bonus Act. In support of this submission he relied on the following decisions :
(i) Sukhdev Singh and others v. Bhagatram [1975-I L.L.J. 399], and Oil and Natural Gas Commission v. The Association of Class II Officers, O.N.G.C. and others. : (1975)ILLJ399SC (Supreme Court)
(ii) U. P. Engineers' Association v. U. P. Electrical Board (Allahabad), (1973) 43 F.J.R. 405 at 408.
(3) To substantiate his second contention, learned counsel for the appellants, referred to S. 25, 31, 32 and 34 of the Act and pointed out that that Pool Fund constituted under the Act excluding the expenses authorised by sub-s. 2 of S. 32 of the Act is meant for distribution only among registered owners and coffee planters and, therefore, every such registered owner has the right to question any illegitimate expenditure incurred by the Board out of the Pool Fund. In support of this submission he replied on the two decisions of the Supreme Court.
(i) R. C. Cooper v. Union of India, : 3SCR530 .
(ii) Gadde Venkateshwara Rao v. Government of Andhra Pradesh, : 2SCR172 .
4. Sri S. G. Sundaraswamy, learned counsel for the Board, repudiated both the contentions urged for the appellants. With reference to the first contention, he submitted as follows :
(i) Even on the basis that the Board is an authority and 'State' as defined in Art. 12 of the Constitution, it is only an authority under the control of the Central Government. The provisions of the Act show that the Board is independent Corporation and has got its own personality. It can neither be considered as a department of the Central Government not as an agent of the Central Government. As clause (iv) of S. 32 of the Bonus Act provides an exception to the application of the Bonus Act only in favour of an industry carried on by or under authority of the Central Government the Board does not fall within the exception provided in that sub-section. In support of this submission, he relied on the following decisions :
(i) Heavy Engineer Mazdoor Union v. State of Bihar, : (1969)IILLJ549SC .
(ii) Bharat Glass Works (Private) Ltd. v. State of West Bengal, : AIR1957Cal347 .
(iii) Abdul Rahman v. Mrs. E. Paul, : (1962)IILLJ693Bom .
(iv) Secretary, Indian Naval Canteen Control Board v. Industrial Tribunal, : AIR1966Ker94 .
(v) Cariabad Mineral Water Mfg. Co. Ltd. v. P. K. Sarkar, : (1952)ILLJ488Cal .
(iv) M/s. Hindustan, Aeronautics Ltd. v. The Workmen and others, : (1975)IILLJ336SC .
(vii) Tamlin v. Hannaford,  All E.R. 323 at 328,  1 K.B.P. 18.
(viii) D. P. Kelkar v. Ambadas, : AIR1971Bom124 .
(ii) The Board is established for earning profits. In fact the sole purpose of the Act was to develop coffee industry and make it profitable. Though the Board may not retain the profit to itself, but is required to distribute it to registered owners, it cannot be disputed that the Board is established for, and is, earning profit, for the benefit of registered owners. Hence the Board also does not fall within the exception incorporated in sub-s. (v) (c) of S. 32 of the Bonus Act.
(iii) On the question of locus standi, learned counsel for the Board referred to S. 25(6) of the Act and submitted that once the registered owner handed over the coffee to the Board, he had no manner of right, except to receive payments, which the Board may give under S. 34 of the Act. He further pointed out that the proportion of money paid as bonus to the employees, compared to the money paid to the appellants and other registered owners out of the Pool Fund during the four years was ridiculously small and, therefore, the appellants cannot be said to have suffered any such injury which calls for an interference by this Court under Art. 226 of the Constitution.
Sri S. A. Hakeem, learned Additional Central Government Standing Counsel, appearing for the Central Government, and Sri S. Vijaya Shanker, learned counsel for respondent 3 Employees' Association adopted the arguments advanced by the learned counsel for the Board.
5. Section 32(iv) and (v) (c) of the Bonus Act, on which the appellants rely, reads :
'32. Nothing in this Act shall apply to
* * * (iv) Employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or State Government or local authority.
* * * (v) Employees employed by - (c) Institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit'.
The first ground urged for the appellants is that the Board falls within the exceptions provided in the above two clauses of S. 32 and, therefore, the Bonus Act is not applicable to the Board and second ground urged is that the appellants being registered owners have the necessary locus stands to question the payment of bonus to the employees of the Board from the Pool Fund. Learned counsel for the appellants submitted that the view taken by the learned single Judge on both the questions is erroneous. In the light of the submissions made by the learned counsel for the appellants with reference to the main question arising for consideration in these appeals, two incidental questions arise for consideration. They are, whether the Coffee Board falls within the definition of 'State' given in Art. 12 of the Constitution and whether its activities fall within the term 'industry' as defined in 8. 2(j) of the Industrial Disputes Act, 1947, which is made applicable to the Bonus Act by virtue of S. 2(22) of the Act. In order to properly appreciate the contentions urged by the parties, it is necessary in the first instance to refer to the scheme of the Act.
(i) Object of the Act. The preamble of the Act states that the Act is being enacted to provide for the development of the coffee industry under control of the Union. Section 2 declares that it is expedient in the public interest that the Union should take under its control the coffee industry.
(ii) Obstruction of the Board. Sub-section (2) of S. 4 provides for the constitution of the Coffee Board, which reads :
'4 (1) The Board constituted by the name of the Indian Coffee Market Expansion Board under S. 4 of the Indian Coffee Market Expansion Ordinance, 1940, shall be the Coffee Board for the purpose of this Act.
(2) The Board shall consist of -
(a) a Chairman to be appointed by the Central Government by notification in the Official Gazette.
(b) Three members of Parliament of whom two shall be elected by the House of the People and one by the Council of States; and
(c) such number of other members not exceeding twenty-nine as the Central Government may think expedient, to be appointed by that Government by notification in the official gazette from among persons who are in its opinion capable of representing -
(i) Governments of the principal coffee growing States;
(ii) Coffee-growing industry;
(iii) Coffee trade interest;
(iv) Curing establishments;
(v) interests of labour;
(vi) interests of consumers; and
(vii) such other interests as, in the opinion of the Central Government, ought to be represented on the Board.'
Section 5 provides that the Board shall be a body corporate having perpetual succession and a common seal with the power to acquire and hold property. Section 7 authorises the Board to appoint committees, staff and agents for the efficient discharge of its functions under the Act.
(iii) Registration of Coffee Estates. - Section 14 makes it compulsory for every owner of coffee plantation to have his name registered as provided in that section and in accordance with the rules which the State Government is entitled to make under S. 12.
(iv) Regulation of Curing and Marketing - Sections 16 to 26 regulate the sale and export of coffee. Sub-section (1) of S. 16 empowers the Central Government to fix the wholesale and retail price of coffee in the Indian market. Sub-section (2) of S. 16 prohibits a registered owner, corer or dealer from selling coffee at a price higher than the price fixed by the Central Government. Section 22 provides for the fixing of internal sale quota of coffee on percentage basis as common to all registered estates. Section 23 provides that a registered owner shall furnish returns as may be prescribed. Section 17 provides that no registered owner shall sell, in the Indian market, coffee from many registered estate, so as to exceed the internal quota is fixed. Section 18 provides that coffee shall not be sold in the market unless cured. According to S. 20, export of coffee from India could be made only by the Board or under the authority of the Board. Section 24 provides that a registered owner may obtain a licence from the Board for the sale of incurred coffee not exceeding the internal quota allotted to the concerned estate. Section 25 makes it obligatory for every registered owner to deliver surplus coffee, i.e., in excess of the internal quota or all coffee produced in cases where no internal quota is fixed, to the Board and also provides for valuation of coffee, etc. The said section reads :
'25 (1) All coffee produced by a registered estate in excess of the amount specified in the internal sale quota allotted to that estate or when the internal sale quotas have been allotted to estates, all coffee produced by the estate shall be delivered to the Board for inclusion in the surplus pool by the owner of the estate or by the curing establishment receiving the coffee from the estate. Provided that where no internal sale quotas have been fixed to estates, the Chairman may allow the owner of any estate to retain with himself for purposes of consumption by his family and for purposes of seed, such quantity of coffee as the Chairman may think reasonable;
Provided further that where the Central Government is satisfied that it is not practicable for any class of owners producing coffee in any specified area to comply with the provisions of this sub-section on account of the small quantity of coffee produced by them or on account of their estates being situated in a remote locality, the Central Government may, by notification in the official gazette, exempt such class of owners from the provisions of this sub-section.
(2) Delivery shall be made to the Board in such places at such times and in such manner as the Board may direct, and such directions may provide for partial delivery to the surplus pool at any time whether or not at that time the internal sale quota has been exceeded, and the coffee delivered shall be such as to represent fairly in kind and quantity the produce of the estate. The Board may reject any consignment merely for a defect in curing.
(3) Coffee delivered for inclusion in the surplus pool shall upon delivery to the Board remain under the Control of the Board which shall be responsible for storage, curing where necessary, and marketing of the coffee.
(4) The Board shall from time to time prepare a differential scale for the value of coffee and shall in accordance with the scale classify the coffee in such consignment delivered for inclusion in the surplus pool according to its kind and quality and shall make an assessment of its value based on its quantity, kind and quality.
(5) The Board may, with the consent of a registered owner treat as having been delivered for inclusion in the surplus pool any coffee from such estate which the registered owner may agree to have so treated.
(6) When coffee has been delivered or is treated as having been delivered for inclusion in the surplus pool, the registered owner whose coffee has been so delivered or is treated as having been so delivered shall retain no rights in respect of such coffee except his right to receive the payments referred to in S. 34.'
Section 26 empowers the Board to take all the necessary steps to market the surplus coffee delivered to it by the registered owners as also coffee purchased by the Board for inclusion in the surplus pool. Sections 27, 28 and 29 regulate the curing of coffee by licensed curing establishments.
(v) Finances : Section 11 of the Act, provides for the levy of duty of custom at such rate as may be fixed by the Central Government not exceeding the maximum rate prescribed in that section, on all coffee produced in India and exported from India. Section 12 of the Act provides for levy of excise duty as may be fixed by the Central Government not exceeding the maximum rate fixed in that section on all coffee constituting the internal sale quota of a registered estate, whether sold or not and on all coffee released for sale in India by the Board from the surplus pool. Section 13 provides that the proceeds of the duty of custom and duty of excise, which goes to the consolidated fund of India, shall, after deducting the cost of collection as determined by the Government of India, be credited to the Board for being utilised for the purpose of the Act. Section 30 provides for the creation of two separate funds, viz., (1) General Fund, and (2) Pool Fund. Section 31 specifies the sources of General Fund. Section 31(2) regulates the application of that Fund. It reads :
'31. (1) To the General Fund shall be credited :
(a) all amounts paid to the Board by the Central Government under sub-section (1) of S. 13;
(b) any sums transferred to the General Fund under the proviso to sub-section (2) of S. 32; and
(c) all fees levied and collected by the Board under this Act.
(2) The General Fund shall be applied :
(a) to meet the expenses of the Board;
(b) to meet the cost of such measures as the Board may consider advisable to undertake for promoting agricultural and technological research in the interests of the coffee industry in India; -
(c) for making such grants to coffee estates or for meeting the cost of such other assistance to coffee estates as the Board may think necessary for the development of such estates;
(d) to meet the cost of such measures as the Board considers advisable to undertake for promoting the sale and increasing the consumption in India and elsewhere of coffee produced in India; and
(e) To meet the expenses for securing better working conditions and the provisions and improvement of amenities and incentives for workers.'
Section 32 specifies the sources of the pool fund and regulates its application. Section 34 provides for payment of money to registered owners from the pool fund. Sections 32 and 34 read :
'32. (1) To the pool fund shall be credited all sums realised by sale by the Board of coffee from the surplus pool.
(2) Subject to the provisions of sub-s. (4) of S. 13, the Pool Fund shall be applied only to -
(a) the making to registered owners of estates of payments proportionate to the value of the coffee delivered by them for inclusion in the surplus pool;
(b) the costs of storing, curing and marketing coffee deposited in and of administering the surplus pool;
(c) the purchase of coffee not delivered for inclusion in the surplus pool.
Provided that where, after the requirements, of the clauses of the sub-section have been met there remains any excess in the Pool Fund, the Board may, with previous sanction of the Central Government, transfer the whole or any part of such excess to the credit of the General Fund.
* * * 34. (1) The Board shall at such times as it thinks fit make to registered owners who have delivered coffee for inclusion in the surplus pool such payments out of the Pool Fund as it may think proper.
(2) The sum of all payments made under sub-s. (1) to any one registered owner shall bear to the sum of the payments made to all registered owners in the same proportion as the value of coffee delivered by him out of the year's crops to the surplus pool bears to the value of all coffee delivered to the surplus pool out of that year's crop.
Provided that in calculating the sum of all payments made under sub-s. (1) and the value of coffee delivered to the surplus pool out of the year's crop, respectively, any payment accepted by a registered owner as final payment in immediate settlement for coffee delivered by him for inclusion in the surplus pool and the value of any such coffee shall be excluded.
The financial provision shows that the General Fund consists of the sums of money given to the Board from the consolidated Fund of India, representing the duty of customs and duty of excise collected in accordance with Ss. 11 and 12 of the Act, respectively, and all the fees collected by the Board under the Act. The Board is given the power to spend the General Fund towards cost of administration and other activities undertaken in accordance with the Act. As far as the Pool Fund is concerned, it exclusively represents the sums realized by the sale of surplus coffee delivered to the Board by registered owners, and which the Board has sold. Further the Pool Fund has to be applied only in the manner provided in S. 32. Accordingly, S. 32 read with S. 34, the Pool Fund, excluding the cost of storing, curing, the marketing of coffee delivered to the Board and for administering the surplus pool, as also the purchase of coffee not delivered for inclusion in the surplus pool, has to be utilized for making payments to registered owners in proportion to the value of the coffee delivered by them, which is required to be determined under S. 25 of the Act. If there is any excess after defraying the aforesaid expenses whole or part of such excess in the Pool Fund could be transferred to the General Fund with the previous sanction of the Central Government. Thus it may be seen, the Pool Fund, minus marketing expenses, is mainly meant for distribution among registered owners, in proportion to the value of coffee delivered by them.
(vi) Provisions for Enforcement : Section 34 provides for penalty for failure to register a coffee estate as required under S. 14. Similarly S. 36 provides for penalty for violation of Ss. 16, 17 and 18. Section 37 provides penalty for running a curing establishment without a licence. Section 37 provides penalty for non-furnishing of returns required to be furnished by the Board in accordance with S. 23. Section 38 provides penalty for filing false returns. Section 38A provides for penalty against a registered owner or licensed courier for not delivering coffee to the Board as required under S. 25. Section 38B empowers the Board to seize coffee on being satisfied that such coffee is required to be delivered to the Board under S. 25, but is being or likely to be disposed of otherwise than by such delivery. Sections 39 and 39A provide for imposition of penalty for obstructing the servants of the Board or the Central Government, in the discharge of their duties imposed under the Act.
(vii) Control : Section 42, puts the Board under the complete control of the Central Government. It reads :
'42. (1) All acts of the Board shall be subject to the control of the Central Government which may cancel, suspend or modify as it thinks fit any action taken by the Board.
(2) The records of the Board shall be open to inspection at all reasonable times by any officer authorised in this behalf by the Central Government.'
Section 43 provides an appeal to the Central Government against any order of the Board refusing licence for the establishment of a curing establishment or an order canceling such licence already granted. Section 44 authorises the Central Government to cause inspection of the records of the Boards. Section 45 regulates the maintenance of accounts by the Board. According to S. 47, all contracts for sale of coffee entered by the Board, which are at variance with the provisions of the Act, shall be void. Section 48 empowers the Central Government to frame rules to carry out the purposes of the Act and in respect of various matters specified in that section.
(viii) Right of registered owners to inspect the records : Section 46 of the Act provides that any registered owner may inspect the records maintained by the Board subject to the conditions prescribed and may also obtain copies of any proceeding or order of the Board on payment.
(ix) Dissolution and its correct : Section 10 of the Act contemplates dissolution of the Board only on the repeal of the Act. This section reads :
'10. When the Board is dissolved by reason of this Act having ceased to be in force, the unexpanded balance of all money received by the Board under the Coffee Market Expansion Ordinance, 1940, or under this Act, except money in the pool fund shall be disposed of in such manner as the Central Government shall disburse the money in the pool fund in the same manner as the Board would have done had it continued to exist.'
As can be seen from S. 10, the dissolution of the Board could be only by the repeal of the Act and on such dissolution all money remaining with the Board except the pool fund, is placed at the disposal of the Central Government, but the Pool Fund is required to be disposed of by the Central Government as the Board would have done under S. 32 read with S. 34 of the Act.
6. An analysis of the provisions of the Act discloses that the Board is a body established by virtue of a Central Act for the purpose of development of coffee industry. According to S. 4, the Board consists of Chairman and other members appointed by the Central Government and three members of Parliament elected by it. The full control over the activities of the Board is vested in the Central Government. The Board is entrusted with the responsibility of implementing and enforcing the provisions of the Act. For this purpose, the Board is invested with enormous powers under various provisions of the Act. For instance, while under sub-s. (2) of S. 23, the Board can refuse to allot internal sale quota to a registered owner if he fails to file his returns as required under sub-s. (1), it can even cancel the quota already allotted and under sub-s. (3), the Board has the power to authorise any officer to visit any estate and to verify the accuracy of the return made by a registered owner under the section. Similarly under S. 38B the Board is given the power to seize control of coffee if the Board is satisfied that the coffee required to be delivered to the Board under the Act, is likely to be disposed of otherwise. Disobedience to the orders issued by the Board under S. 23(3) or S. 38B or under any other provisions of the Act by any person by causing any obstruction to any person, who is authorised by the Board to execute its orders made under the provisions of the Act, is made punishable under S. 39 and 39A of the Act. In view of S. 10, only by an Act of Parliament the Board could be dissolved and on such dissolution, the entire general fund devolves on the Central Government and the Pool Fund is required to be distributed by the Central Government to the registered owners. Having regard to the aforesaid provisions and in particular the power of the Board to issue orders, disobedience of which is made punishable, in view of the ratio of the decisions of the Supreme Court in Rajasthan Electric Board v. Mohanlal, : (1968)ILLJ257SC and Oil and Natural Gas Commission, : (1975)ILLJ399SC , there can be no doubt that the Board is an authority within the meaning of that expression used in Art. 12 of the Constitution and consequently is 'State' as defined in that Article. Analysis of the provision of the Act also discloses that the Board carries on the activity of development of coffee industry curing of coffee and its marketing in a systematic manner. There is organised co-operation between the Board and its employees. The activities of the Board are, helping the development of coffee industry which results in greater production of coffee, distribution of coffee to the consumers in various ways. These activities of the Board fall within the word 'industry' as defined in the Industrial Disputes Act, is also beyond doubt in view of the decision of the Supreme Court in Bangalore Water Supply and Sewerage Board v. Rajappa, : (1978)ILLJ349SC . This disposes of the two incidental questions arising for consideration.
7. Now coming to the main question, the stand taken on behalf of the respondents, is that even if the Board is 'an authority' and 'State' as defined in Art. 12 of the Constitution and is also regarded as carrying on an industry, the provisions of the Act disclose that the Board is an independent entity and is only subject to the control of the Government of India, and therefore, cannot be considered as an industry carried on by or under the authority of the Government of India and, therefore, does not come within the exception provided in S. 32(iv) of the Act.
8. In the decisions Heavy Engineering Mazdoor Union (supra) Bharat Glass Work (P) Ltd. (supra) Abdul Rehman (supra) and Secretary Indian Naval Canteen Control Board (supra) relied on for the respondents, the expression 'by or under authority of the Central Government' used in S. 2(a) of the Industrial Disputes Act came up for consideration in the context of the question raised in those cases as to whether the Central Government which had the power to make reference of a dispute between the employees and management of an industry over which the Central Government exercised large measure of control. The contention raised in each of those cases was to the effect that as the Central Government exercised considerable control over the industry concerned, it should be held that the industry was being carried on under the authority of the Central Government and consequently the appropriate Government which had the power to make a reference of an industrial dispute between the employees and the management of such companies for adjudication was the Central Government, and not the State Government concerned in view of the definition of 'appropriate Government' given in S. 2(a) of the Industrial Disputes Act. In all these cases the contention was negatived, and it was held that exercise of any amount of control by the Central Government over the industry run by a private limited company or even a Government company, was not sufficient to hold that the industry was being run under the authority of the Central Government. In particular, it was also held that in order to show that an industry is run under the authority of the Central Government, the management of such industry of the Central Government, and the mere exercise of control would not being about, such a relationship. The view taken on similar question in the other cases - Carlsbad Miner Water Mfg. Co., Ltd., (supra) M/s. Hindustan Aeronautics Ltd. (supra) and Tamlin (supra) relied on for the respondents is also similar. In the case of D. P. Kelkar (supra) in which clause (iv) of S. 32 of the Bonus Act itself came up for consideration, it was held that a private company carrying on industry, when it was taken over by the Central Government under S. 18A of the Industries (Development and Regulation) Act, the entire management stood vested in the Central Government and the Central Government carried on the management through authorised controller appointed by it, and, therefore, it was a case where the industry was directly under a department of Central Government and therefore, it was an industry, which was carried on by or under the authority of the Central Government and, therefore, exempt from the operation of the Bonus Act in view of clause (iv) of S. 32 of that Act. This decision was relied on for the respondents to distinguish the position of the Board having regard to the provisions of the Act. It was argued that the position of the Board under the Act is similar to that of a company subject to a large measure of control by the Central Government as in the Heavy Engineering (supra) case other similar cases - Bharat Glassworks (Private) Ltd. (supra) Abdul Rehman, (supra) Secretary, Indian Naval Canteen Control Board (supra) Carlsbad Mineral Water Mfg. Co. Ltd. (supra) M/s. Hindustan Aeronautics Ltd. (supra) and Tamlin (supra) and not similar to the company taken over by the Government as in the case of D. P. Kelkar (supra), therefore, the Board was under the control of the Central Government, and it was functioning independently and not under the authority of the Central Government, In the aforesaid decisions relied on for the respondents, the Courts have made a clear distinction between the exercise of control by the Central Government over an industry and the industry being carried on under the authority of the Central Government. As the view taken in all the cases are similar, it is sufficient to set out the view taken by the Supreme Court in Heavy Engineering Mazdoor Union which covers all aspects of the matter covered by all the decisions on which reliance was placed. Relevant portions of the judgment read :
'...... A person is said to be authorised or to have an authority when he is in such a position that he can act in a certain manner without incurring liability, to which he would be exposed but for the authority, or, so as to produce the same effect as if the person granting the same authority had for himself done the act. For instance, if A authorised B to sell certain goods for and on his behalf and B does so, B incurs no liability for so doing in respect of such goods and confers a good title on the purchaser. There clearly arises in such a case the relationship of a principal and an agent. The words 'under the authority of' mean pursuant to the authority, such as where an agents or a servant acts under or pursuant to the authority of his principal or master. Can the respondent-company, therefore, he said to be carrying on its business pursuant to the authority of the Central Government That obviously cannot be said of a company incorporated under the Companies Act whose constitution, power and functions are provided for and regulated by its memorandum of association and the articles of association. An incorporated company, as is well known, has a separate existence and the law recognises it as a juristic person separate and distinct from its members. This new personality emerges from the moment of its incorporation and from that date the persons subscribing to its memorandum of association and other is joining it as members are regarded as a body incorporate or a corporation aggregate and the new person begins to function as an entity. (cf. Saloman v. Saliman & Co.  A.C. 22).
* * * * * '...... Therefore, the mere fact that the entire share capital of the respondent-company was contributed by the Central Government and the fact that all its shares are hold by the President and certain officers of the Central Government does not make any difference. The company and the share holders being, as aforesaid, distinct entities, the fact that the President of India and certain officers hold all its shares does not make the company an agent either of the President or the Central Government.
* * * * * It is true that besides the Central Government having contributed the entire share capital, extensive powers are conferred on it, including the power to give directions as to how the company should function, the power to appoint directors and even the power to determine the wages and salaries payable by the company to its employees. But these powers are derived from the company's memorandum of association and the articles of association and not by reason of the company being the agent of the Central Government. The question whether a corporation is an agent of the State must depend on the fact of each case. Where a statute setting up a corporation so provides such a corporation can easily be identified as the agent of the State as in Graham v. Public Works Commissioner,  2 K.D. 781, where Phillimore, J., said that the Crown does in certain cases establish with the consent of Parliament certain officials or bodies who are to be treated as agents of the Crown even though they have the power of contracting as principals. In the absence of a statutory provision, however, a commercial corporation acting on its own behalf even though it is controlled wholly or partially by a Government Department, will he ordinarily presumed not to be a servant or agent of the State. The fact that a Minister appoints the members or directors of a Corporation and he is entitled to call for information, to give directions which were binding on the Directors and to supervise over the conduct of the business of the Corporation does not render the Corporation an agent of the Government. (See State Trading Corporation Ltd. v. Commercial Tax Officer, Visakhapatnam, : 4SCR99 , per Shah, J., and Tamilin v. Mannaford,  1 K.B. 18 at pp. 25, 26. Such an inference that the Corporation is the agent of the Government may be drawn where it is performing in substance Governmental and not commercial functions. (cf. London Country Territorial and Auxiliary Forces Association v. Nicholas,  2 All E.R. 432).'
9. In view of the decision of the Supreme Court in the Heavy Engineering case (supra) the mere circumstance that the Central Government exercises enormous control over the Board would not be sufficient to hold that the Board is functioning under the authority of the Central Government as contended for the appellants, but it must be established that the Board having regard to the provisions of the Act, is an agency of the State. On this question, however, we have the final pronouncement of the Supreme Court in Oil and Natural Gas Commission (supra) case. In the said case, it has been held that a body created by a statute which answers the description of the term 'authority' used in Art. 12 of the Constitution and consequently falls within the definition of the word 'State' is an agency of the Government under whose control it functions. After analysing the provisions of the Oil and Natural Gas Commission Act, 1959, under which that Commission was constituted, Chief Justice Ray concluded as follows :
'44. All these provisions indicate at each stage that the creation, composition of membership, the functions and powers, the financial powers, the audit of accounts, the returns, the capital, the borrowing powers, the dissolution of the Commission and acquisition of land for the purpose of the company and the powers of entry are all authority and agency of the Central Government.
Similarly with reference to the Life Insurance Corporation constituted under the Life Insurance Act. His Lordship concluded as follows :
'50. The structure of the Life Insurance Corporation indicates that the Corporation is an agency of the Government carrying on the exclusive business of life insurance. Each and every provision shows in no uncertain terms that the voice is that of the Central Government and the hands are also of the Central Government.'
Regarding Industrial Finance Corporation also, the conclusion reached was as follows :
'59. These provisions of the Industrial Finance Corporation Act show that the Corporation is in in effect managed and controlled by the Central Government.'
Mathew J., in his separate concurring judgment also expressed the same view as follows :
'109. The relevant provisions of the Life Insurance Corporation Act have been very clearly analysed in the judgment of my Lord the Chief Justice and it is unnecessary to repeat them. It is clear from these provisions that the Central Government has contributed the original capital of the Corporation, that part of the profit of the Corporation, goes to that Government, that the Central Government exercises control over the policy of the Corporation, that the Corporation carried on a business having great public importance and that it enjoys a monopoly in the business. I would draw the same conclusions from the relevant provisions of the Industrial Finance Corporation Act which have also been referred to in the aforesaid judgment. In these circumstances. I think these Corporations are agencies or instrumentalities of the 'State' and are, therefore, 'State' within the meaning of Article 12. The fact that these corporations have independent personalities in the eye of law does not mean that they are not subject to the control of Government or that they are not instrumentalities of the Government. These Corporations are instrumentalities or agencies of the State for carrying on business which otherwise would have been run by the State departmentally. If the State had chosen to carry on these businesses through the medium of Government departments, there would have been no question that actions of these departments would be 'State actions'. Why then should actions of these corporations be not State actions ?'
From the portions of the judgment extracted above, it may be seen that the Supreme Court has clearly held that a body which is an authority within the definition of 'State' as defined in Art. 12 of the Constitution and functioning under the control of the Government is an agency of the Government. The decisions of the Supreme Court in Heavy Engineering case (supra) and the decision of the Court of Appeal in England in Tamlin (supra) on which the learned counsel for the respondents relied have been relied on by Alagiriswamy, J. in support of his dissenting judgment in this case. In view of this clear pronouncement of the point by the majority, in the decision, the contention urged for the appellants that the Board which also answers the description of an authority, within the meaning of that term used in Art. 12 of the Constitution and consequently falls within the definition of the word 'State' as defined in that Article is an agency of the Central Government has to be upheld. It follows that the Board is carrying on the industry under the authority of the Central Government. Consequently, it should be held that the Board falls within the exception provide in S. 32(iv) of the Bonus Act. The view taken by the learned single Judge to the contrary is, therefore, liable to be reversed.
10. The next question for consideration is as to whether the Board is an institution established not for a profitable purpose. Learned counsel for the respondents submitted that the object of the Act is for the development of coffee industry and a margin of profit is always kept in fixing the sale price of coffee under the Act and, therefore, it is an institution established for earning profit. Learned counsel for the appellants did not dispute that the Board sells coffee at profitable prices. He, however, submitted that coffee Board earns profit to it as the entire sale proceeds of surplus coffee has to be credited to the Pool Fund as required under S. 32 of the Act and the amount so credited after deducting the expenses permitted by that section has to be distributed to the registered owners in the manner provided in S. 34 of the Act. Therefore, he submitted that the Coffee Board is only helping the registered owners to earn profit and is not earning any profit to itself. Learned counsel for the appellants, pertinently pointed out that if we look into the schedule to the Bonus Act, which prescribe the method of calculation of profit for the purpose of payment of Bonus, it gives the clearest indication that it is not possible for the Board to say that it is earning any profit. In fact, even the learned counsel for the Board did not say that the Board is earning profit to itself. He said that the Board is earning profit and transmitting the same to the registered owners. Having regard to the object of the Act and its provisions, it appears to us that the Board is established for a public purpose, to protect and develop the coffee industry and it is not required to earn any profit to itself which would mean that it can use such profit as it desires. The position really is that the Board is only aiding the marketing of coffee and helping the registered owners to earn profit and is not earning any profit to itself. The view taken by the Allahabad High Court in respect of U.P. Electricity Board in the case of U.P. Engineer's Association is equally applicable to the Board. Hence, we take the view that the Board is an institution established not for purposes of earning profit and hold that the contention of the appellants that the Board falls within the exception provided in clause (v) (c) of 8. 32 of the Bonus Act also merits acceptance.
11. The only question which survives for consideration is as to whether the appellants have no locus standi and whether the injury is so small that we should refuse to exercise our jurisdiction under Art. 226 of the Constitution. The appellants are registered owners. They are the persons whose activities are sought to be regulated under the Act. Under S. 25 they are required to deliver the surplus coffee grown on their estates as determined by the Board, to the Board. Under sub-s. (6) of S. 25 25 though they have no right to the surplus coffee the same sub-section creates the right to receive payments in accordance with S. 34. Under S. 32 the Board is requited to credit all the sums realised by the sale of surplus coffee, delivered to the Board by the registered owners, to the Pool Fund, S. 32 read with S. 34 provides for payment of money from the Pool Fund to the registered owners in proportion to the value of coffee delivered. Section 32(2) authorises the Board to spend the money from the Pool Fund only to the extent required for the marketing of coffee and the purchase of coffee not delivered for inclusion in the surplus pool. Therefore, it is clear that the Pool Fund represents the sale proceeds of the surplus coffee delivered to the Board by the appellants and other registered owners and they have the right to receive and the Board is under legal obligation to distribute the Pool Fund among registered owners, who had delivered surplus coffee to the Board in proportion to the value of coffee delivered by each registered owner. The Board cannot incur any expenditure out of the Pool Fund except what is authorised under sub-s.(2) of S. 32. They have the right to inspect the accounts take extracts therefrom, etc. The registered owners are vitally interested in the proper administration of the pool fund. It follows that if the Board incurs any unauthorized expenditure, it adversely affects the amount of payment which they are entitled to receive under S. 34 of the Act. In view of these facts, and in the light of the decisions in R. C. Cooper, (supra) Gadde Venkateshwara Rao and K. Ramdas Shenoy v. Udipi Municipality, (supra) it is not possible to accede to the contention urged for the respondents that the appellants have no locus standi to file the writ petitions. We, therefore, hold that the appellants have locus standi to present these writ petitions and the view taken to the contrary by the single Judge is not correct.
12. Learned counsel for the respondents, however, urged that the loss caused to the appellants is paltry and negligible and, therefore, we should decline to interfere. In this behalf he pointed out from the statement of objections that the entire amount of Rs. 7.657 lakhs paid towards bonus for the four years was not drawn from the Pool Fund but only a sum of Rs. 3.80 lakhs was utilised and it was paid only to the employees employed in the marketing establishment of the Board, whose establishment expenditure is required to be met out of the Pool Fund as provided in S. 32(2) of the Act, and the rest of the amount was met from the General Fund and paid to other employees of the Board. They also referred to the figures showing the payment of amount to which the appellants were entitled to under S. 34 of the Act during the relevant years and the short payment caused by the payment of bonus to the employees engaged in the marketing of the coffee. They are as follows :
--------------------------------------------------------------Total amount Total amountS. P. received from of loss on accountthe fund of bonus--------------------------------------------------------------Rs. Rs.962 3,63,720.00 145963 1,81,931.00 46964 36,13,293.00 93192,342 17,416.00 4---------------------------------------------------------------
It is true that the short payment caused to each of the appellants bears a very small proportion to the total amount due to them or paid to them during the relevant years. Learned counsel for the appellants submitted that they are not questioning only the payment of amounts during one or two years only. He submitted that the, appellants are questioning the applicability of the Bonus Act itself and if the Bonus Act is held applicable, the payments will have to be made every year in future also and further there could be demands also for payment of bonus at higher rates and it would result in higher and recurring liability on the registered owners every year. He also fairly submitted that the appellants do not insist for the issue of any direction for the recovery of any amount paid by the Board to its employees uptodate.
13. If the short payment caused to the appellants to the extent indicated above was only the loss caused to them we might have declined to exercise the jurisdiction under Article 226 without going to the merits of the case. But as the appellants are questioning the applicability of the Bonus Act to the Board, and as the bonus paid in the four years in question was only the minimum and the application of the Bonus Act to the Board results in recurring liability on the Pool Fund and there is also clear possibility of demand and also payment of higher rate of bonus in subsequent years, the injury complained of cannot be said to be insignificant to exercise the jurisdiction under Art. 226. Therefore, it would not be proper for us to decline the exercise of jurisdiction, when the case of the appellants on merits is well-founded.
14. In the light of the discussion above, we hold as follows :
The Coffee Board carries on the industry under the authority of the Central Government. Having regard to the object and purpose of the Act its provisions, the Coffee Board is an institution established not for purposes of profit. Consequently the Payment of Bonus Act has no application to the Coffee Board as it comes within the exception set out in cls. (iv) and (v) (c) of S. 32 of that Act.
15. In conformity with our conclusions, we allow the appeals and make the following order :
(i) The common order made by the single Judge in the writ petitions is set aside and the writ petitions are allowed.
(ii) A declaration is made to the effect that the Payment of Bonus Act has no application to the Coffee Board. But this declaration shall not affect all payments made up to date to the employees of the Board by applying the Bonus Act.
(iii) A writ in the nature of mandamus shall issue to the Coffee Board, restraining it from making any payment towards bonus - to its employees from out of the Pool Fund applying the provisions of the Payment of Bonus Act.
(iv) No costs.