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Hindustan Machine Tools Workers Staff Union Vs. Hindustan Machine Tools Limited and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberW.P. No. 4311 of 1981
Judge
Reported in(1982)ILLJ178AP
ActsConstitution of India - Articles 12, 209, 310, 311 and 366; Andhra Pradesh Factories and Establishments (National, Festival and other Holidays) Act, 1974 - Sections 11 and 11(1)
AppellantHindustan Machine Tools Workers Staff Union
RespondentHindustan Machine Tools Limited and anr.
Excerpt:
labour and industrial - holiday - articles 12, 209, 310, 311 and 366 of constitution of india and section 11 and 11 (1) of andhra pradesh factories and establishments (national, festival and other holidays) act, 1974 - whether undertaking which is said to be 'under the control of government of india' for purpose of article 12 can also be an 'undertaking under control of state' by virtue of act of 1974 - petitioners contented that such undertaking not being run by 'state' departmentally not deemed to be 'under control of central government' - the word 'control' to be interpreted liberally to include many possessions which are not commensurate with full ownership - government holds major share in undertaking in issue - such undertaking deemed to be under control of government - tests for.....1. the questions of law that arise in this writ petition are, (1) what is the meaning to be given to the words 'under the control of the government of india' occurring in the provisions of some enactments and (2) whether the meaning given by the courts to the words 'under the control of the government of india' occurring in article 12 of the constitution of india, can also be extended to the provisions of other enactments containing the same words or whether an undertaking which is said to be 'under the control of the government of india' for the purpose of art. 12 can at the same time be held to be not 'under the control of the government of india' for the purpose of those enactments. 2. the facts that gives rise to these questions are as follows : elections for panchayat samithis in.....
Judgment:

1. The questions of law that arise in this writ petition are, (1) What is the meaning to be given to the words 'under the control of the Government of India' occurring in the provisions of some enactments and (2) Whether the meaning given by the Courts to the words 'under the Control of the Government of India' occurring in Article 12 of the Constitution of India, can also be extended to the provisions of other enactments containing the same words or whether an undertaking which is said to be 'under the control of the Government of India' for the purpose of Art. 12 can at the same time be held to be not 'under the control of the Government of India' for the purpose of those enactments.

2. The facts that gives rise to these questions are as follows : Elections for panchayat samithis in Andhra Pradesh were scheduled to be held on 9-6-1981. The Government of Andhra Pradesh exercising its power under S. 3(2) of the Andhra Pradesh Factories and Establishments (National Festival and other Holidays) Act of 1971, hereinafter referred to as 'the Act', issued G.G. Rt. No. 564, dated 3-6-1981, declaring 9-6-1981 as a paid holiday for 'industrial workers in factories and establishments situated in the panchayat samithis and also in urban areas where industrial workers are working but residing in panchayat samithis and registered themselves as voters in such samithis, in connection with the Panchayat Samithi Elections, to enable them to exercise their franchise in the said elections'. On 6-6-1981, the management of Hindustan Machine Tools Limited, the 1st respondent herein, issued a circular to all concerned stating that the permission will be applicable to those working in the D (General) shift and who are enrolled in the voters list and does not apply to A, B, and C shift employees as the polling is between 8.00 a.m. to 4.00 p.m. only. It is also stated in the circular that the eligible voter-employees who are purpose to exercise their franchise in the Panchayat Samithi elections shall fill in the submit declarations in the enclosed proforma. Then on 3-6-1981, the Government issued another G.O. Rt. No. 577, declaring 9-6-1981, to be paid holiday for industrial workers in factories and establishments situated in Panchayat Samithis and also in urban areas where industrial workers are working but residing in Panchayat Samithis. On 7-6-1981 the management issued an appeal to all the workers to attend to duty on 9-6-1981, and in the alternative requested the workers' union to suggest a working day in lieu of the holiday on 9-6-1981 in order to enable the management to take a decision regarding the declaration as to the substitute holiday. The workers without giving any reply to this, failed to attend to duty on 9-6-1981, claiming that to be a special holiday as declared by the State Government. Thereafter on 9-6-1981, the management issued another memo stating that the concerned action on the part of the workmen in not attending to duty on 9-6-1981, is illegal and amounts to an unjustified strike and therefore no wages would be paid for 9-6-1981, to the erring workmen. The stand taken by the management is that the Act will not apply to the company inasmuch as the same is owned and controlled by the Central Government and that S. 11(c) of the Act exempts the respondent-company from the operation of the Act. The union of the workmen represented by its General Secretary, has filed this application for the issue of a writ of mandamus restraining the management from deducting the wages of the factory workers for 9-6-1981, by declaring that G.O. Rt. No. 564 dated 3-6-1981 is valid and binding on the management.

3. Before I proceed to consider the rival contentions it is necessary at this juncture to extract the relevant provisions of law. Article 12 of the Constitution of India reads thus :

'In this part, unless the context otherwise requires 'the state' includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.'

Section 11 of the A.P. Factories and Establishments (National, Festival and other Holidays) Act, 1974 reads thus;

'11. Exemptions : 1) Nothing in this Act shall apply to :-

a) any employee in a position of Management;

b) any employee whose work involves travelling;

c) any factory or establishment under the control of the Central or any State Government, local authority, Reserve Bank of India, a railway administration operating any railway as defined in clause (20) of Art. 366 of the Constitution, or a cantonment authority; or

d) any mine or oil field.

(2) The Government may, by notification and for reasons to be specified therein, exempt either permanently or for any specific period, any factory or establishment or class of factories or establishment or person or class of persons from all or any of the provisions of this Act, subject to such conditions as the Government may deem fit'.

In both the provisions of law, i.e., Art. 12 and S. 11(1)(c) of the Act the words' under the control of the Government of India' are there except that in the latter provisions instead of 'Government of India' the words 'Central or any State Government' are used. That makes no difference.

4. Sri K. G. Kannabhiran, the learned counsel for the petitioners submits that Art. 12 of the Constitution imposes limitation on bodies or authorities which are covered by the definition 'State' and the inclusion of these undertaking under Art. 12 is for a limited purpose of securing compliance with the fundamental rights by these bodies or authorities and the extended meaning of the word 'State' under Art. 12 cannot be imported to the provision of another statute. It is also submitted that a factory or an establishment can be said to be 'under the control of the Central Government or State Government for the purpose of S.11(1)(c) of the Article, only when such factory or establishment is run by the State Departmentally and though the Hindustan Machine Tools Ltd., according to the learned counsel, is said to be under the control of the Government of India within the meaning of Art. 12 of the Constitution, still it cannot be brought under the exemption provided under S. 11(1)(c) of the Act inasmuch as the same is not run departmentally by the Central Government.

5. Sri K. Srinivasa Murthy, the learned counsel for the respondents, on the other hand submits that if the H.M.T. Ltd., is held to be not under the control of the Government of India, then the writ petition itself is not maintainable as the same cannot be brought under the meaning of 'State' under Art. 12. It is also submitted that even otherwise the Articles of Association of the H.M.T. Ltd., and the various memos issued by the Government of India giving directions the undertaking would establish that to the H.M.T., Ltd., is definitely under the control of the Central Government for the purpose of S. 11(1)(c) of the Act.

6. There can be no doubt that the Hindustan Machine Tools Ltd., comes under the definition of 'State' within the meaning of Art. 12. The various tests laid down by the Supreme Court in Sukhdev Singh v. Bhagatram [1975-I L.L.J. 399], Ramanadayaram Shetty v. The International Airport Authority of India, [1979-II L.L.J. 217] and Som Prakash Rekhi v. Union of India [1981-I L.L.J. 79], if applied to the Hindustan Machine Tools Ltd., the same comes within the definition of 'State' under Article 12 and therefore, is subjected to the constitutional limitations and consequently the writ is maintainable, and the same is not in controversy.

7. The learned counsel for the petitioners, however, submits that for the purpose of S. 11(1)(c) of the Act it is not enough if an undertaking comes within the ambit of Article 12. According to the learned counsel Art. 12 only imposes a limitation on these bodies for the purpose of securing compliance of fundamental rights by these bodies and that all the principles laid down by the Courts in interpreting the words 'under the Control of the Government of India' occurring in Art. 12 cannot be imported into other enactments where the same words occur, to substantiate his submission, he relied on several decisions of the Supreme Court and High Courts, Firstly, reliance is placed on Ajaya Hasia v. Khalid Mujib, [1981-I L.L.J. 103]. In that case their Lordships considered the question whether the Regional Engineering College, Srinagar is an authority within the meaning of Art. 12. Their Lordships referred to various earlier decisions and to the tests to be applied in considering whether the colleges come within the meaning of 'State' and ultimately held that the college is an authority falling within the definition of 'State' under Art. 12. During the course of the judgment, at one stage their Lordships observed;

'It is also necessary to add that merely because a juristic entity may be an 'authority' and, therefore, 'State' within the meaning of Art. 12, it may not be elevated to the position of 'State' for the purpose of Arts. 209, 310 and 311 which find a place in Part XIV. The definition of 'State' in Art. 12 which includes an 'authority' within the territory of India or under the control of the Government of India is not limited in its application only to Part III and by virtue of Art. 36, to Part IV. It does not extend to the other provisions of the Constitution and hence a juristic entity which may be 'State' for the purpose of Part III and IV would not be so for the purpose of Parts XIV or any provisions of the Constitution.'

Relying on this observation, the learned counsel for the petitioners submits that an 'authority' though held to be under the control of the Government of India for the purpose of Art. 12, need not be so far the purpose of any other provisions of the Constitution or for the purpose of any other enactment. I am unable to agree with the learned counsel. Their Lordships did not go to the extent of holding that where an undertaking is under the control of the Government of India for the purpose of Art. 12 still it may not be under the same control for other purposes. What all their Lordships laid down is that the definition of 'State' in Art. 12 which includes an authority is limited to part III and to Part IV of the Constitution; but here the question is what is the meaning to be given to the words 'under the Control of the Government of India'. Can we envisage a situation where a company which is declared to be under the control of the Government of India for the purpose of Art. 12, can be held to be otherwise, viz., not being under the control of the Government of India for other purpose. As held by the Supreme Court in the above cases, the meaning of 'State' in Art. 12 cannot be extended to other provision of the Constitution. But can the tests, in considering whether an authority is under the control of the Government of India, be different when we came to the provisions of other enactments containing same words The learned counsel, however, submits that though the Central Government might have contributed the share capital and might be exercising some control in directing the functions of the company, but where such powers are derived from the Memorandum and Articles of Association of the company not by reason of the company being the agent of the Central Government, the same cannot be said to be under the control of the Central Government. Reliance is placed on Heavy Engineering Mazdoor Union v. State of Bihar, [1969-II L.L.J. 549], wherein the Supreme Court was considering the question whether the Central or the State Government was the appropriate Government to make a reference under S. 10 of the Industrial Disputes Act. In deciding that question their Lordships considered the type of control and observed thus :

'The Central Government might have contributed the entire share capital and have been conferred with extensive powers to direct the functions of the company. But such powers are derived from Memorandum and articles of association of the company and not by reason of the company being the agent of the Central Government. In the absence of the statutory provision, however, a commercial corporation acting on its own behalf, even though it is controlled wholly or partially by a Government Department, would ordinarily be presumed not to be a servant or agent of the State. The authority of the Government for running the undertaking of a company could be inferred when the company performs in substance governmental and not commercial function.'

In the matter of River Steam Navigation Co., Ltd., (1967) II Company Law Journal, 106, a learned single Judge of the Calcutta High Court observed thus :

'When the Government engages in trading ventures and particularly as Government companies under the Company Law, it does not do so, as a political state or a political Government but it does so, in garb and essence, as a company. The Government Company, therefore, is a class of company and is not to be placed on the same pedestal as a State or a Government'.

In A.P. State Road Transport Corporation v. Income-tax Officer, : [1994]52ITR524(SC) , the question whether the Andhra Pradesh State Road Transport Corporation was liable to pay Income-tax camp up for consideration and in that context the Supreme Court considered whether the income derived by the Corporation can be deemed to be the one derived by the State, and observed thus :

'There is also no doubt that the Corporation is a State-Controlled corporation in the same sense that at all Material stages and in all material particulars, the activity of the Corporation is controlled by the State; but it is clear that all other citizens may be admitted to the group of share-holders, and from that point of view the Act contemplates contribution of the capital for the corporation not only by the Central and the State Governments, but also by the citizens'.

In these decisions the observations made by the learned Judges were altogether in a different context. It is how they held that the undertaking in question was not under the control of the Government. At the risk of repetition it may again be mentioned that we are concerned with the simple question whether the H.M.T. Limited is under the control of the Central Government or not. In Rama Dayaram Chetty v. The Internal Airport Authority of India, [1979-II L.L.J. 217] (hereinafter referred to as the 'Airport authority's case') a reference is made to Heavy Engineering Mazdoor Union v. State of Bihar, [1969-II L.L.J. 549] and it is observed :

'The question which arose in this case was whether a reference of an Industrial dispute between the Heavy Engineering Corporation Limited (hereinafter referred to as the 'Corporation') and the Union made by the State of Bihar under S. 10 of the Industrial Disputes Act, 1947, was valid. The argument of the union was that the industry in question was carried on under the authority of the Central Government and the reference could, therefore, be made only by the Central Government. The Court held that the words 'under the authority mean' pursuant to the Authority, such as where an agent or a servant acts under or pursuant to the authority of his principal or master' and on this view, the Court addressed itself to the question whether the Corporation could be said to be carrying on business pursuant to the authority of the Central Government. The answer to this question was obviously 'no' because the corporation was carrying on business in virtue of the authority derived from its memorandum or articles of association and not by reason of any authority granted by the Central Government. The Corporation, in carrying on business was acting on its own behalf and not on behalf of the, Central Government and it was therefore not a servant or agent of the Central Government in the sense that its actions would bind the Central Government. There was no question in this case whether the Corporation was an instrumentality of the Central Government and, therefore, an 'authority' within the meaning of Art. 12. We may point out here that when we speak of a corporation being an instrumentality or agency of Government, we do not mean to suggest that the Corporation should be an agent of the Government in the sense that whatever it does should be binding on the Government. It is not the relationship of principal and agent which is relevant and material but whether the Corporation is an instrumentality of the Government in the sense that a part of the governing power of the State is located in the Corporation and though the Corporation is acting on its own behalf and not on behalf of the Government, its action is really in the nature of State action. This decision dealing with an altogether different point has no bearing on the present issue'.

8. From the above observations it becomes clear that it is not always necessary that the Corporation should be an agent of the Government in the sense that whatever it does should be binding on the Government to bring the same within the meaning of Art. 12. It may be that the Corporation is acting on its own behalf and not on behalf of the Government. But if part of the governing power of the State is located in the Corporation then it is in the nature of State Action. If the meaning can be extended to that extent for the purpose of Art, 12, I am unable to see as to how for the purpose of S. 11(1)(c) a different and truncated meaning can be given to the words 'under the control of the Government of India'. I must point out at this stage that the learned counsel for the petitioners has not placed any decision wherein this point was raised and considered.

9. The learned counsel next submitted that a different interpretation can be given to the same set of words occurring in two enactments depending upon the context. There cannot be any doubt about this proposition. In Keats v. Levis Merthyr Consolidated Collieries Ltd., (1911) Appeal Cases, 641, it is held :

'In the construction of a statute it is, of course, at all times and under all circumstances permissible to have regard to the state of things existing at the time of statute was passed, and to the evils, which as appears from its provisions, it was designed to remedy'.

The Supreme Court in B. N. Banerji v. P. R. Mukherjee, [1953-I L.L.J. 195] approving these observations held that 'if the words are capable of one meaning alone, then it must be adopted, but if they are susceptible of wider import, we have to pay regard to what the statute or the particular piece of legislation had in view. Though the definition may be more or less the same in two different statutes, still the objects to be achieved not only as set out in the preamble but also as gatherable from the antecedent history of the legislation may be widely different. The same words may mean one thing in one context and another in a different context. 'The submission is that the words under the control of the Central Government', in S. 11(1)(c) of the Act should be given a different meaning According to the learned counsel the object of the enactment is to provide National festivals and special holidays to persons employed in factories and therefore, it should be made applicable to every factory situated in the Panchayat Samithi areas and also to industrial workers who are working in urban areas but residing in Panchayat samithis. But it must be noted that S.11 clearly provides for exemptions and S. 11(1)(c) exempts such of those establishments which are under the control of the Central or the State Governments or local authorities, etc. This provision of law abundantly makes it clear that the object of the Act is to see that the employees in a private company are given such holidays. The object of the Act is no doubt to look after the welfare of the workers. But so far as the factories or establishments which come under S. 11(1)(c) are concerned it can be noticed that the national holidays and other festival holidays are being strictly observed. However S.11 is in clear terms and when once a factory or establishment is said to be under the control of the Government, then it is exempted.

10. The next question we have to consider is whether the H.M.T. Ltd., is under the control of the Central Government or not. As mentioned at the out-set there is no dispute that this undertaking is under the control of the Government and thus comes under the definition of state within the meaning of Art. 12. This is no doubt enough to reject the contention of the petitioners outright. However, since this matter is argued at length that I shall also consider the nature of control exercised by the Central Government on the undertaking.

11. The word 'control' as per the Chambers Twentieth Centurey Dictitionary, means 'restraint; authority; Command regulation : a check; a means of controlling or testing'; In legal and commercial dictitionary by S. D. Mitra the meaning for 'control' is given as 'to control is to check, test or verify or exercise power over to, exercise restraining or directing influence over, regulate; to have power over rule'. As held in B. N. Banerji v. P. R. Mukherjee, [1953-I L.L.J. 195] if the word is capable of one meaning alone, it can be adopted. But if it is susceptible of wider import we have to pay regard to what the statute or the particular piece of legislation had in view. The learned counsel however relies on a passage in 'Craies on statute Law' Seventh Edition, at page 134, which read thus :

'Where there are different statutes in part materia though made at different times, or even expired and not referring to each other they shall be taken and construed together as one system and as explanatory of each other'.

Yet another passage at page 170 which relied upon, read thus :

'The meaning of ordinary words, when used in Acts of Parliaments, is to be found not so much in a strict etymological propriety of language, nor even in popular use, as in the subject or occasion on which they are used, and object which is intended to be attained'.

The learned counsel relies on these passages in support of his contention that the words 'under the authority of the Central Government occurring in S. 2(a) of the Industrial Disputes Act which defines 'appropriate Government' have been interpreted in a different manner and if the same interpretation is to be given to the words under the control of the Central Government' occurring in S. 11(1)(c) of the Act, then Hindustan Machine Tools Ltd., cannot be said to be under the control of the Central Government. To mention it once over, throughout the argument of the learned counsel has been, unless the establishment is departmently run by the Government it cannot be said to be under control of the Government. The learned counsel relied on a judgment of the Supreme Court in Hindustan Aeronautics Ltd. v. The Workmen, [1975-II L.L.J. 336], wherein the definition of 'appropriate Government', was considered and an observation was made to the effect that even if the shares were exclusively owned by the Govt. That by itself is not a conclusive factor to say that is the 'appropriate Government' within the meaning of S. 2(a) of the Industrial Disputes Act. Reliance is also placed on a judgment of the Patna High Court in Khadi Gramodyog Sangh, Muzaffarpur v. State of Bihar, 1977 Labour & Industrial Cases 466, wherein meaning of the words 'under the authority of the Central Government' occurring in S. 2(a) of the Industrial Disputes Act, has been considered. In that decision it is observed as follows :

'In order to come within the purview of that phrase, an industry must be acting pursuant to the authority of the Central Government as if it were an agent or servant of the Central Government as its principal.'

It must be noted that in S. 11(1)(c) of the Act the words used are 'under the control of the Central Govt.', whereas in S. 2(a) of the Industrial Disputes Act the words used are 'under the authority of the Central Government. Further, the on text in which the words are used in also different, In the Industrial Disputes Act the object of S. 2(a) is entirely different. Further, whether an establishment is under the control of the Central Government or not has to be gathered from various facts. The subscription of share capital may not be in all cases a deciding factor. However, I shall presently consider as to what extent the Hindustan Machine Tools Ltd. is under Control of the Central Government.

12. In Airport Authority case, [1979 II L.L.J. 217], as well as in Som Prakash v. Union of India, [1981-I L.L.J. 79] (hereinafter referred to as 'Bharat Petroleum case'), several tests have been laid down for considering whether an establishment is an 'authority' within the meaning of 'State' as laid down in Art. 12. In Bharat Petroleum case Krishna Iyer, J., who spoke for the Bench held thus :

'We may decoct the tests for ready reference :

1. 'One thing is clear that if the entire share capital of the Corporation is held by Government it would go a long way towards indicating that the Corporation is an instrumentality or agency of Govt.'

2. Existence of 'deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentalilty.'

3. It may also be a relevant factor Whether the Corporation enjoys monopoly status which is State conferred or State protected.

4. If the function of the Corporation are of public importance and closely related to Government functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government.

5. 'Specifically, if a department of Government is transferred to a corporation it would be a strong factor supporting of this inference of the Corporation being an instrumentality or agency of Government'.

The finale is reached when the cumulative effect of all the relevant factors above set out is assessed and once the body is found to be an instrument or agency of Government the further conclusion emerges that it is 'State' and is subject to the same constitutional limitations as Government.'

No doubt the learned counsel for the petitioners submits that these tests are only relevant for the purpose of Art. 12, but the same may not hold good for the purpose of S. 11(1)(c) of the Act. As mentioned at the out-set the argument itself is fallacious as there is inherent inconsistency in the same I fail to see as to how these tests which are relevant for considering whether a particular establishment is under the control of the Central Government or not for the purpose of Art. 12 became irrelevant for the purpose of considering whether the Hindustan Machine Tools Ltd. is an establishment under the control of the Central Govt. for the purpose of S. 11(1)(c) of the Act. The word occurring in both are the same. If Hindustan Machine Tools Ltd. is under the control of the Central Government for the purpose of Art. 12, then it is equally so far the purpose S. 11(1)(c) of the Act. There can be no manner of doubt about the same and I see no incongruity in applying the same tests to S. 11(1)(c).

13. The learned counsel in this context however, submits that the Hindustan Machine Tools being a Government company, its affairs are being governed by the provisions of the Companies Act and whatever control the Central Government exercises is only derived from the provisions of the Companies Act and, therefore, it cannot be held that the establishment is under the control of the Central Government. In support of his contention he relied on a judgment of the Calcutta High Court in River Steam Navigation Co Ltd., (1967) II Company Law Journal, 106, wherein a learned single Judge observed thus :

'When the Government engages in trading ventures and particularly as Government Companies under the Company Law, it does not do so as a political State or a Political Government but it does so, in garb and essence, as a company. The Government company, therefore, is a class of company and not to be placed on the same pedestal as a State or a Government.'

Reliance also placed on a judgment of a single Judge, of the Kerala High Court in DA Pethe v. District Collector Ernkulam. : AIR1976Ker37 , wherein it is observed that the Corporations registered under the companies Act or which are the creation of some statutory provisions cannot be considered to be a department of the Government or agent of the Government First of all it must be noted that these decisions were rendered prior to the Airport Authority case, [1979-II L.L.J. 217], and Bharat Petroleum cases [1981-I L.L.J. 79], We do not find a reference even to Sukhdev Singh's cases, [1975-I L.L.J. 399], in either of these decisions. Now the tests enunciated are so wide and several factors are to be taken into consideration in deciding whether a particular establishment is under the control of the Central Government or not. When the words are susceptible of wider import, we must also bear in mind the object of a particular legislation. Bearing in mind the above principles let us examine the nature of the control that the Central Government exercises over the Hindustan Machine Tools Ltd., For this purpose, it becomes necessary to refer to the memorandum as well as the Articles of Association and also certain notifications issued under S. 620 of the Companies act.

14. At this juncture it must be pointed out that it may not be necessary to refer to a large number of articles in view of the fact that it is accepted that this establishment is a State as defined Art. 12 of the Constitution. This itself goes to a great extent to show that the establishment is under the control of the Central Government. No further reference to any of the Articles is in fact necessary. However, since the learned counsel has been laying great emphasis that a deeper control (in the sense that the establishment should also be a departmental affairs), is necessary, I shall refer to such of these Articles which are relevant in this regard. In the Memorandum of Association we find that the President of India and several other Secretaries of the Government of India are described as subscribers. Then we come to the Articles of Association. Art. 6 lays down that subject to the direction of the President, the shares shall be under the control of the Directors. Articles 23 lays down that the President may authorise the amount of capital to be raised and prescribe the norms and conditions on which it may be raised. Article 28 is to the effect that subject to the approval of the President, the company in general meeting may, from time to time sub-divide or consolidate its shares or any of them and exercise any of the other powers conferred by S. 94 of the Companies Act. Article 31 is to the effect that subject to the approval of the President, the directors may, from time to time, borrow. Art. 110(A) provides that the President may time to time give directions to the company as to the exercise and performance of its functions in matter involving national security or substantial public interest and to ensure that the Directors shall given immediate effect to directives so issued. These articles are signed by the President of India and other officers of the Government who are described as subscribers. These Articles establish that the undertaking is under the deep and pervasive control of the Govt. Apart from this, under S. 620 of the Companies Act the Central Government may be notification in the Official Gazette direct that any of the provisions of the Companies Act other than Ss. 618, 619, and 619-A, shall not apply to any Government company. There are several such notifications. This provision shows that the Government company is treated differently from the other companies and further shows that the Central Government has absolute control over those Government Companies.

15. At this juncture I shall also refer to the Standing Orders of the Hindustan Machine Tools Ltd. These are issued and certified under the Industrial Employment (Standing Orders) Act, 1946. Standing Order No. 12 provides for leave and holidays. That includes national holidays and festival holidays. The object of the Industrial Employment (Standing Orders) Act, 1946, is to require the employers to define the conditions of employment. Section 2(b) of the said Act defines 'appropriate Government' and the words 'under the control of the Central Government' occur in that section. A division bench of the Patna High Court consisting of Ramaswamy, C.J., and R. K. Chowdary, J., in Sindhri Workers Union v. Labour Commissioner, : (1959)IILLJ531Pat , while considering the scope of S. 2(b) of Industrial Employment (Standing, Orders) Act, 1946, held thus :

'The test for finding out whether an industrial establishment is controlled by the Central Government under S. 2(b) is a realistic test, namely, whether the Central Government has control over the industrial establishment under the Articles of Association in the case of a Private Limited Company or by the provisions of the special statute in the case of a public corporation.

I have been shown in the present case that the Articles of Association expressly provides that the President of India should have complete control over the working of the Sindhri Fertilizers Co. Limited. It, therefore, follows that the appropriate Government under S. 2(b) of the Act XX of 1946 is the Central Government and not the State Government.'

When we examine the Articles of Association of Hindustan Machine Tools Ltd., the ratio laid down by the Patna High Court in this decision applied on all fours.

16. The learned counsel for petitioners, however, sought to distinguish the decision of the Patna High Court in Sindri Worker's Union v. Labour Commissioner, : (1959)IILLJ531Pat , and relied on a later decision of the same High Court in Heavy Engineering Mazdoor Union v. State of Bihar, [1969-I L.L.J. 241]. That was again a case where the scope of S. 2(a) of the Industrial Disputes Act which defines 'appropriate Government' was considered. I have already held that the scope of the words 'under the authority of the Central Government' appearing in S. 2(a) may not be of much help, particularly when there are decisions which have considered the scope of the words 'Union the Control of the Government of India'. As discussed earlier the learned counsel for the petitioner also relied on Heavy Engineering Mazdoor Union v. State of Bihar wherein the scope of S. 2(a) of the Industrial Dispute Act has been considered. As a matter of fact, in the Airport Authority, case the Supreme Court has referred to the ratio laid down in Heavy Engineering Mazdoor Union v. State of Bihar, [1969-II L.L.J. 549] distinguished by holding that the said decision deals with and an altogether different point and has no bearing on the issue, viz, whether the undertakings was under the control of the Central Government. Therefore, the decisions relied upon the learned counsel which deal with the scope of S. 2(a) of the Industrial Disputes Act are distinguishable. As observed in Airport Authority case what we have to see is whether a part of the governing power of the Government is located in the corporation. While considering the nature of control by the Central Government we have already referred to the various Articles and Memorandum of Association and also the standing orders. These Articles and Memorandum of Association clearly show that the Central Government has absolute Control over the Hindustan Machine Tools Ltd. As provided under S. 620 of the Companies Act, the Central Government by notification can also exclude the applicability of any of the provisions of the companies Act to a Government company further the standing orders which are framed under a statue, regulate the service conditions of the workers and also provide for national holidays and festival holidays.

17. With this background, I shall now examine the scope of S. 11(1)(c) of the Act, the object of which is to provide for the grant of National, Festival and other holidays to persons employed in any factory or establishment in the State of Andhra Pradesh. The Act extends to the whole of the State. 'Employers' are defined to mean a person who has the ultimate control over the affairs of such factory or establishment. 'Establishment' means any establishment as defined in clause (10) of S.2 of the Andhra Pradesh Shops and Establishments Act, 1966, 'Factory means any factory as defined in clause (m) of S. 2 of the Factories Act, 1948.

18. An examination of these various provisions would show that they are meant to apply to the factories and establishments. It is not in dispute that for all the Government companies and corporations which are under the control of the Central Government, standing orders or regulations provide for national holidays or festival holidays. So far as Hindustan Machine Tools Ltd., is concerned, the standing order provides for National and Festival Holidays. Now S. 11(1)(c) of the Act provides for exemptions and categorically lays down that none of these provisions shall apply to any factory or establishment under the control of the Central or any State Government, etc. The provision itself contemplates that there must be some factories or establishments under the control of the Central or any State Government and for such factories or establishments the provisions are not applicable. The contention of the learned counsel that unless an establishment is run departmentally by the Government, it would not come under S. 11(1)(c), is not at all acceptable. In Johntoh Fear I & Co. v. Commonwealth 67, Commonwealth Law Reports, 314 it is held that 'the word' 'Control' is wide enough to include many types of possession which are not commensurate with full ownership'. In Halsbury's Laws of England (Vol 23) Fourth Edition at para 199 the meaning of 'Control' particularly with reference to the companies is given as under :

'For the purposes of the close company provisions and of certain other provisions 'Control' is defined so as to include not only the shareholders of a company but also other persons and companies,

A person is taken to have control of a company if he exercises, or is able to exercise or is entitle to acquire, direct or indirect control over the company's affairs. In particular he is taken to have control if he possesses or is entitled to acquire :

(1) The greater part of the share capital or issued capital of the company or of the voting power of the company; or

(2) such part of the issue share capital of the capital of the company as would if the whole of its income were in fact distributed among the participators (without regard to any rights which participator of any other person has as a loan creditor) entitle him to receive the greater part of the amount so distributed; or

(3) Such rights as would, in the even of the winding up of the company or in any other circumstances, entitled him to receive the greater part of the company's assets which would then be available for distribution among participators.'

19. These tests are very much satisfied so far as the Hindustan Machine Tools Ltd. is concerned. Apart from this, as already held, there are Articles of Association and the notifications issued under S. 620 of the Companies Act and the Standing Orders, which, if examined cumulatively, would establish that the Hindustan Machine Tools Ltd., is not only a 'State' within the meaning of the Art. 12 of the Constitution, but also factory 'under the control of the Central Government' for the purpose of S. 11(1)(c) of the Act.

20. In the result, the writ petition is dismissed, but under the circumstances without costs. Advocate's fee Rs. 100.


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