1. This writ petition is for certiorari to quash G.O.Ms. No. 1482 (Labour) dated 4th July, 1984, in and by which the Government of Tamil Nadu directed a reference of the dispute between the workmen and the management of the Boiler Auxiliaries Project of Bharat Heavy Electricals Ltd., Ranipet, North Arcot District in respect of bonus for the accounting years 1981-82 and 1982-83.
2. The facts of the case are as follows : The Supervisor Union, BHEL/BAP, Ranipet, raised an industrial dispute against the management of Boiler Auxiliaries Project of BHEL, Ranipet over the issue of payment of bonus for the years 1981-82 and 1982-83. Conciliatory talks were held by the Commissioner of Labour in this dispute. The other unions functioning in the establishment, viz., Boiler Auxiliaries Project, Anna Workers Union, Ranipet also participated in the conciliatory talks. Since no settlement was possible the Commissioner of Labour sent a conciliation failure report to the Government. Thereupon, considering the report and other relevant materials, the Government issued the Government Order, cited above. It is under these circumstances, the present writ petition has been preferred.
3. (i) The only argument of Mr. Ramasubramaniam, learned counsel for the writ petitioner, is that the appropriate Government as far as the writ petitioner is concerned, is only the Government of India and therefore the Government of Tamil Nadu has no competency to issue the order referring the matter for adjudication under the Industrial Disputes Act. According to him, this is an industry carried on by the Government itself. No doubt the writ petitioner is incorporated under the Companies Act. Notwithstanding such an incorporation, by reason of which it acquires a legal status, it is still the Government of India, which is running the industry. This is for the reason that all the shares are owned by the Government of India. The company carries on various types of business, including the manufacturing and marketing of Power Station equipment, Boilers, etc. For this purpose they have manufacturing Units all over India in places like Bhopal, Hardwar, Jhansi, Hyderabad, Tiruchi and Bangalore. They also have other establishments situate at various cities in the various states of India. If, therefore petitioner is an all India company set up by the Central Government, to confer power upon the State Government will run contrary to the intention of the Industrial Disputes Act. In fact under the cognate enactment, viz., Industrial Disputes Act 1948, the Standing Orders of the petitioner's establishment were certified in 1982 only by the Regional Commissioner, Central, who is an authority constituted by the appropriate Government under S. 2(a) of the Industrial Disputes Act. In support of this submission, learned counsel first cites Heavy Engineering Mazdoor Union v. State of Bihar (1969)-II L.L.J. 549, in which the question arose as to the meaning of the phrase 'under the authority of the Central Government'.
As regards the first limb, viz., 'by the Central Government' it cannot be construed to be an authority because both in the High Court as well as the Supreme Court that point was conceded.
(ii) Instead of the Government carrying on the commercial activity through one of its departments, merely because it carries on those activities through a company or a corporation, it cannot be said that the industry is not carried on by the Central Government. The formation of the company is only a matter through which the industry is carried on. Therefore, the general principle that by reason of incorporation of the Companies Act, it becomes a legal entity and therefore it is not the Government of India, is not the test to be applied. According to the learned counsel when the ruling under Art. 12 of the Constitution of India goes to the extent of saying, 'notwithstanding such incorporation under the statute or under the Companies Act, or again under the Societies Registration Act', they would be deemed to be authorities within the said Article. The rulings cited in this connection are Sabhajit Tewary v. Union of India (1975)-I L.L.J. 374 and Ramana v. I.A. Authority of India (1979)-II L.L.J. 217.
(iii) Again in Som Prakash v. Union of India (1981)-I L.L.J. 79 which dealt with a case of Bharat Petroleum Corporation and also in Ajay Hasia v. Khalid Mujip (1981)-I L.L.J. 103, this interpretation under Art. 12 of the Constitution of India was adopted. In Rashtriya Mill Mazdoor Sangh v. Model Mills, Nagpur (1984)-II L.L.J. 507, which was a case under S. 18A of the Industries (Development and Regulation) Act, 1951, concerning 'sick mill' this aspect has been dealt with, In C. V. Raman and other v. Bank of Indian Southern Region 1984-II L.L.J. 34 a Division Bench of this Court, on an analysis of the entire case law came to the conclusion that the intervention of the statutory personality will be of no consequence. In this case, even factually there are very many controls exercised by the Government of India. For instance, in the Articles of Association Art. 7 says, the appointment of Directors is by the President of India, as defined under Art. 1. It is conceded by the other side that all the shares are owned only by the Government of India. Having regard to the manner of control exercised by the Government, excluding the appointment of Directors, this is a clear case in which it is impossible to hold that it is not an industry carried on by the Central Government. Therefore, the State Government will have no jurisdiction whatever.
4. In opposing the stand of Mr. Ramasubramaniam, Mr. A. L. Somayaji, learned counsel for the second respondent, says :
(i) The petitioner is a company performing commercial functions, viz., the manufacture of Boilers. In so far as it is incorporated as a company under the Companies Act of 1956, it is a separate legal entity. The action of the company is not binding on the Government. The workman are not Government servants. Mere ownership of the shares even in its entirely by the Central Government will not make it an industry run by the Central Government. In Abdul Rehman v. Mrs. E. Paul : (1962)IILLJ693Bom this aspect of the matter has been elaborately considered. It cannot be stated that the Heavy Engineering Mazdoor Union v. State of Bihar (supra) proceeded upon a mere presumption. There are two limbs under S. 2(a), one created by the Central Government and another under the authority of the Central Government. The second limbs is wider in its perspective, while the first limb talks of the Commercial activity of the Government run through its Departments. If according to the Supreme Court ruling the phrase 'under the authority' is inapplicable a fortiori it follows it cannot be held 'carried on by the Government'. As to what is the interpretation placed on this ruling can be gathered from Hindustan Aeronautic v. The Workmen 1975-II L.L.J. 336 as well as Rashtriya Mill Mazdoor Sangh v. Model Mills, Nagpur (supra). While dealing with the Food Corporation of India in Workers Union v. Food Corporation of India 1985 A.I.R. S.C.C. 294 the Supreme Court held that because of this incorporation it has got a separate legal personality and therefore it cannot be held as an industry run by the Government of India or under the authority of Government of India. Again in Indian Institute of Petroleum v. State of U.P. 1985 L.I.C. 198 when the Indian Institute of Petroleum, which was an institute registered under the Societies Registration Act, notwithstanding the fact that the funds of the institute flowed only from the Government, that the Directors were Government nominees and that the Government issued directions from time to time, yet it was held to be not an industry run by the Government or under the authority of the Central Government. Ramana Dayaram Shetty v. International Airport Authority (supra) deals with Heavy Engineering Mazdoor Union v. State of Bihar (supra) and construed in the same way. Merely because for the purpose of Art. 12, which is definitely worded, a wider principle is made applicable, that can have no bearing as to the construction of the language under S. 2(a) of the Industrial Disputes Act. One must have regard to the definition of 'employer' occurring under S. 2(g) as well while interpreting this section. Further, if really any industry, irrespective of it carrying a legal personality of its own, carried on by the Central Government or under the authority of the Central Government will fall within S. 2(a)(i) of the Industrial Disputes Act. The further elaboration made both under the original Act as well as the amending Act 46 of 1982 will be redundant. Certainly such a redundancy is to be avoided while interpreting this section.
(ii) Lastly it is submitted that in so far as the Supreme Court has recently deprecated the practice of raising labour disputes even on preliminary points, as seen from D. P. Maheswari v. Delhi Administration & others 1983-II L.L.J. 425, at this stage the employer should not be allowed to raise these points.
5. Having regard to these arguments I will now extract the relevant portions of the Industrial Disputes Act, 1947. S. 2(a) reads :
'2. In this Act, unless there is anything repugnant in the subject or context -
(a) 'appropriate Government' means - (i) in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or by a railway company or concerning any such controlled industry as may be specified in this behalf by the Central Government ....'
Section 2(g) defines an 'employer' as follows :
''employer' means -
(i) in relation to an industry carried on by or under the authority of any department of the Central Government or a State Government, the authority prescribed in this behalf, or where no authority is prescribed, the head of the department;
(ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority;'
6. The question on hand is, whether Bharat Heavy Electricals Ltd., Ranipet, the writ petitioner, could be considered to be an industry run by the Central Government or under the authority of the Central Government.
7. I may straightaway say that Mr. Ramasubramaniam, learned counsel for the petitioner, did not urge that it is an industry carried on under the authority of the Central Government. His entire argument is that it is an industry carried on by the Central Government.
8. Firstly I may refer to factual position. The Memorandum of Association of Bharat Heavy Electricals Limited in Art. 1 says :
Article II reads :
'The Registered office of the Company will be situated in the Union Territory of Delhi.' Article III proceeds to deal with the objects for which the Company is established. Art. IV states that the liability of members is limited. Art. V may now be extracted :
'The authorised share capital of the Company is Rupees two hundred crores divided into 20,00,000 equity shares of Rs. One thousand each with the rights, privileges and conditions attaching thereto as may be provided by the articles of Association of the Company for the time being, with power to increase and reduce the Capital of the Company and to divide the shares in the Capital for the time being into several classes and to attach thereto respectively such preferential, deferred, guaranteed, qualified or special rights, privileges and conditions as may be determined by or in accordance with the Articles of Association of the Company and to vary, modify, amalgamate or abrogate any such rights, privileges or condition in such manner as may for the time being be provided by the Articles of Association of the Company.' This Memorandum of Association was signed by
(1) Additional Secretary, Department of Heavy Engineering, Ministry of Industry and Supply;
(2) Joint Secretary, Department of Heavy Engineering, Ministry of Industry and supply; and
(3) Additional Secretary, Ministry of Finance; each holding 3, 1 and 1 shares respectively. The certificate of incorporation was issued on 13the November, 1964 as follows :
'Certificate of Incorporation.
No. 4281 of 1964-65.
I hereby certify that BHARAT HEAVY ELECTRICALS LIMITED is this day incorporated under the Companies Act, 1956, (No. 1 of 1956) and that the Company is Limited.
Given under my hand at NEW DELHI this THIRTEENTH (22nd) day of NOVEMBER (KARTIKA One thousand nine hundred and SIXTY FOUR (1886 S.k.).'
9. The important provisions in the Articles of Association may now be seen. In Art. 1 it defines :
''The President of India.' The Company under Art. 2 is a private Company. I have already referred to Art. 67, in and by which the appointment of Directors is made only by the President of India. Art. 69 confers specific powers on Directors while the general powers of the Board of Directors are talked of under Art. 68.
10. The report of Government of India, Ministry of Industry, Department of Heavy Industry for 1982-83 may now be seen briefly. In Chapter I it states, the Department of Heavy Industry is responsible for development and growth of a wide spectrum of heavy and intermediate engineering industries. It covers the entire gamut of machine building industries, equipment for power generation, transmission and distribution drilling rigs, wagons, bogies, commercial vehicles, cars, scooters and tractors. It also caters to the requirements of construction equipment, earth moving equipment, special cranes, road rollers and equipments for basic industries such as steel, non-ferrous metals, petrochemicals, caustic soda, soda ash, cement, sugar, paper, jute and cotton textiles and other industrial machinery.
Another major areas covered is the supply of a wide range of machine tools. The Department also exercises administrative control over a number of Central Public Sector Undertakings engaged mainly in industrial activities covering the above equipment sectors. The main functions discharged relate to -
1. Administrative responsibility for development of the above-mentioned range of industries.
2. Co-ordination and administrative responsibility of the concerned public sector undertakings.
3. Aiding modernisation and technology upgradation in the concerned industries.
4. Promoting exports of engineering goods and projects.
Dealing with Bharat Heavy Electricals, which come under the category of 'individual public sector undertakings' it state as follows :
'Bharat Heavy Electricals Limited is one of the leading engineering companies not only in India, but also in the world it is engaged in the manufacture of equipment and supply of systems for Energy industry, Transportation and other important sectors of the Indian economy.
'It has nine manufacturing divisions, nine engineering and service divisions and two institutes. The various items manufactured at these manufacturing divisions are hydro sets, turbo sets, transformers, switchgear, control gear, traction motors, industrial machines, capacitors rectifiers, marine turbines, compressors for industrial applications and high-speed drive turbines. Besides it also manufactures bowl mills, nihard rolls, oil rigs, power boiler, industrial boilers, valves, mechanical/electrostatic precipitators regenerative air preheators, high quality casting and forgings, boiler quality seamless steel tubes, thyristor conventors, static excitation equipment, traction control equipment and thryristor devices, etc.'
Therefore, according to the learned counsel, all these will clearly go to prove factually that it is nothing more than an industry carried on by the Government of India.
11. I may now refer to the relevant case law. The leading cases on this subject is Heavy Engineering Mazdoor Union v. State of Bihar (supra). It was held at page 552 1969-II L.L.J. 549.
'It is an undisputed fact that the company was incorporated under the Companies Act and it is the company so incorporated which carries on the undertaking. The undertaking, therefore, is not one carried on directly by the Central Government or by any one of its departments as in the case of posts and telegraphs or the railways. It was, therefore, rightly conceded both in the High Court as also before us that it is not an industry carried on by the Central Government. That being the position, the question then is, is the undertaking carried on under the authority of the Central Government There being nothing in S. 2(a) to the contrary, the word 'authority' must be construed according to its ordinary meaning and therefore must mean a legal power given by one person to another to do an act. 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 authority had for himself done the act. For instance, if A authorities 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 agent or a servant acts under or pursuant to the authority of his principal or master. Can the respondent-company, therefore, be 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, powers 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 jurisdic 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 or association and other joining it as members are regarded as a body incorporate or a corporation aggregate and the new person begins to function as an entity.'
According to the learned counsel for the petitioner the concession made in that case does not disable the approach by this Court as to what exactly is the interpretation to be placed on the word 'by'. I certainly would have ventured to deal with that aspect, but there are several rulings of the Supreme Court itself as to how this ruling has to be interpreted.
12. In Hindustan Aeronautics v. The Workmen 1975-II L.L.J. 336 (supra) in paragraph 3 it was observed :
'Mr. Desai made a futile and unsubstantial attempt to distinguish the case of Heavy Engineering Mazdoor Union 1969-II L.L.J. 549 on the ground that that was the case of a Government Company carrying on an industry where Private Sector Undertakings were also operating. It was not an industry, as in the instant case, which the Government alone was entitled to carry on to the exclusion of the private operators. The distinction so made is of no consequence and does not affect the ratio of the case in the least. We may also add that by amendment made in the definition of 'appropriate Government' in S. 2(a)(i) from time to time certain statutory corporations were incorporated in the definition to make the Central Government as appropriate Government in relation to 'the industry carried on by them. But no public company even if the shares were exclusively owned by the Government was attempted to be robed in the said definition.'
13. Then again in Rashtriya Mill Mazdoor Sangh v. Model Mills, Nagpur (supra) the observations made in paragraph 14 may be noted usefully :
'Section 2(a) of the Industrial Disputes Act 1947 defines 'appropriate Government' to mean (leaving aside the words which are not relevant for our purpose) in relation to any industry dispute concerning any industry carried on by or under the authority of the Central Government ...... the Central Government. The expression used is any industry carried on by or under the authority of the Central Government. This expression came up for consideration before this Court in the context of an industrial dispute between a Government Company as comprehended within the meaning of the expression in S. 617 of the Companies Act. Government Company is defined to mean any company in which not less than fifty one per cent. of the paid-up share capital is held by the Central Government, or by any State Government 'or Governments, or partly by the Central Governments or partly by one or more State Governments and includes a company which is a subsidiary of a Government Company as thus defined'. An interesting question that came up for consideration before this Court was whether in respect of an industrial dispute between such Government Company and its workmen, which is the appropriate Government which can make a reference of the industrial dispute for adjudication under S 10(1) of the Industrial Disputes Act, 1947. In respect of such Government Company this Court in Heavy Engineering Mazdoor Union v. State of Bihar (supra) interpreting the expression 'under the authority of held that the expression means pursuant to the authority, such as where an agent or a servant acts under or pursuant to the authority of his principal or master. The Court preceded to examine the personality off an incorporated company which the law recognises as jurisdic person, separate and distinct from its members. The Court concluded that a commercial corporation acting on its behalf, even though it is controlled wholly or partially by a Government department, will be ordinarily presumed not to be a servant or agent of the State.'
14. In Workers' Union v. Food Corporation of India (supra), in dealing with the Food Corporation of India, Khalid, J. speaking for the Court, observed in paragraphs 11 to 13 as follows :
'11. 'Appropriate Government' is defined in S. 2(1)(a) of the Act to read as under :
2(1)(a) 'Appropriate Government' means -
(1) in relation to -
(i) any establishment pertaining to any industry carried on by or under the authority of the Central Government, or pertaining to any such controlled industry as may be specified in this behalf by the Central Government, or
(ii) any establishment of any railway, Cantonment Board, Major port, mine or oil-field, or
(iii) any establishment of a banking or insurance company,
the Central Government,
(2) in relation to any other establishment the Government of the State in which that other establishment is situated.
12. A bare reading will show that sub-cls. (ii) and (iii) of S. 2(1)(a) are not attracted in this case. The question then is whether various establishments of the Corporation spread all over the country could be said to be establishments pertaining to any industry carried on by or under the authority of the Central Government or pertaining to any such controlled industry as may be specified in this behalf by the Central Government Before we determine the width and ambit of sub-clause (1) and sub-s. (1) of S. 2(1)(a), it would be advantageous to refer to the definition of 'establishment' set out in S. 2(1)(e). It reads as under :
2(1)(e) 'establishment' means -
(i) any officer or department of the Government or a local authority, or
(ii) any place where any industry, trade, business, manufacture or occupation is carried on
We would be concerned with sub-clause (ii) of S. 2(1)(e) which provides that the establishment would be an establishment where any industry, trade, business, manufacture or occupation is carried on. Thus various warehouses, godowns and places alike set up by the Corporation would be establishments where the trade of the Corporation is being carried on. Could these establishments be said to be pertaining to an industry carried on by or under the authority of the Central Government Before we find out correct meaning of the expression 'any industry carried on by or under the authority of the Central Government' it is necessary to draw attention to the definition of 'appropriate Government' as set out in S. 2(a)(1) of the Industrial Disputes Act 1947, which provides that 'appropriate Government means : '(i) in relation to any industrial dispute concerning any industry carried on by or under the authority of Central Government (omitting the words not necessary for the present purpose) ....or in relation to an industrial dispute concerning the .... Food Corporation of India establishment under S. 3, or a Board of Management establishment for two or more contiguous States under S. 16 of the Food Corporation Act 1964. .. the Central Government'. Obviously, therefore, for the purpose of Industrial Disputes Act, 1947, in relation to any industrial dispute concerning the Food Corporation of India, the Central Government is the appropriate Government. There is an express reference to use Food Corporation of India. If the Food Corporation of India was an establishment in an industry carried on by or under the authority of the Central Government, it would be tautologous to specifically refer it and include it. It is a well established canon of statutory construction that Legislature is known to avoid tautology and redundancy. If Food Corporation of India was an industry carried on by or under the authority of the Central Government, it would have been comprehended in the first part of subs. (1) but that being not the position, it was specifically referred to by name. Having examined this definition, it is necessary to bring to fore the contradistinction between the definition of the expression 'appropriate Government' in the Industrial Disputes Act, 1947 and the definition in the Act under examination. It may be pointed out that the expression in the Act does not include by name the Food Corporation of India as the one in respect of which the appropriate Government would be the Central Government, while it is mentioned so in the definition in the Industrial Disputes act eventhough both the statutes are the general expression 'any industry carried on by or under the authority of the Central Government'.
'13. Having noticed this contradistinction, let us examine the width and content of the expression 'any industry carried on by or under the authority of the Central Government'. The matter is no more re integra. In Heavy Engineering Mazdoor Union v. State of Bihar (supra) this Court held that the expression 'an industry carried on by or under the authority of the Central Government' as used in the definition of expression 'appropriate Government' in S. 2(a)(i) of the Industrial Disputes Act, 1947, would 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'. This Court took notice of the fact that the entire share capital of the Heavy Engineering Corporation Ltd. was contributed by the Central Government and extensive powers were conferred on it and yet the Corporation was none other than a company and could not be said to be an industry carried on by or under the authority of the Central Government.'
15. In Ramana Dayaram Shetty v. International Airport Authority (supra) at 235 the ruling of Heavy Engineering Mazdoor Union v. State of Bihar (supra) was referred to in paragraph 30 and ultimately it was held that that decision dealing with an altogether different point had no bearing on the present issue. Inspite of this, the argument before me is that while interpreting Art. 12 it cannot be contended that it would be an authority within the meaning of that Article. There are several cases which deal with the scope of Art. 12 and I may briefly refer to them.
16. Sabhajit Tewary v. Union of India (supra) dealt with a question whether the Council of Scientific and Industrial Research is not an authority within the meaning of Art. 12 of the Constitution of India, and it was held that it was not. But in so doing it referred to the case of Heavy Engineering Mazdoor Union v. State of Bihar (supra) as well in paragraph 5 and observed as follows :
'that the Praga Tools Corporation, Heavy Engineering Corporation Ltd. and Hindustan Steel Ltd. are all companies incorporated under the Companies Act and the employees of these companies do not enjoy the protection available to Government servants as contemplated in Art. 311. The companies were held in those cases to have existence independent of the Government and by the law relating to corporation. These could not be held to be departments of the Government.'
17. Again in Sukdev Singh v. Bhagatram 1975-I L.L.J. 399 the question arose as to the meaning of Authorities' and also whether Oil and Natural Gas Commission, Life Insurance Corporation and Industrial Finance Corporation are 'authorities' within the meaning of Art. 12, and it was observed :
'The expression 'other authorities' in Art. 12 is wide enough to include within it every authority created by a statute and functioning within the territory of India or under the control of the Government of India. The expression 'other authorities' will include all constitutional or statutory authorities on whom powers are conferred by law.'
18. In Raman v. I. A. Authority of India (supra) it was observed in paragraph 20 of 1979-II L.L.J. 217.
'It will thus be seen that three are several factors which may have to be considered in determining whether a corporation is an agency or instrumentality of Government. We have referred to some of these factors and they may be summarised as under : whether there is any financial assistance given by the State, and if so, what is the magnitude of such assistance whether there is any other form of assistance, given by the State, and if so, whether it is of the usual kind or it is extra-ordinary, whether there is any control of the management and policies of the corporation by the State and what is nature and extent of such control, whether the corporation enjoys State-conferred or State protected monopoly status and whether the functions carried out by the corporation are public functions closely related to governmental functions. This particularisation of relevant factors is however not exhaustive and by its very nature it cannot be, because with increasing assumption of new tasks, growing complexities of management and administration and the necessity of continuing adjustment in relations between the corporation and Government calling for flexibility, adaptability and innovative skills, it is not possible to make an exhaustive enumeration of the tests which would invariably and in all cases provide an unfailing answer to the question whether a corporation is governmental instrumentality or agency. Moreover, even amongst these factors which we have described, no one single factor will yield a satisfactory answer to the question and the Court will have to consider the cumulative effect of these various factors and arrive at its decision on the basis of a particularised enquiry into the facts and circumstances of each case.'
Again in paragraph 29 this case was referred to, which portion has already been seen, viz., the extract of paragraph 30 in Ramana Dayaram Shetty v. International Airport Authority (supra).
19. In Som Prakash v. Union of India (supra) dealt with the case of Bharat Petroleum Corporation Limited. In paragraph 22 at pages 84 1981-I L.L.J. 79 it was observed :
'A corporation is an artificial being, invisible, intangible and existing only in the contemplation of the law. Being the more creature of the law, it possesses only those properties which the charter of its creation confers on it either expressly, or as incidental to its very existence. Those are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and, if the expression be allowed, individuality; properties by which a perpetual succession of many persons are considered the same and may act as a single individual. John Marshall, Darmouth College v. Woodward 4, Wheatow 518 (1819).'
Again in paragraph 25 the following observations are found : at page 85 1981-I L.L.J. 79.
'These are the facts when we come to brass tacks. Facts form the raw material out of which the finished product of judicial finding is fabricated after processing through established legal principles. Indeed, in life as in law 'it is as fatal as it is cowardly to blink facts because they are not to our taste'. What, then, are the basic facts available from the Act Constitutional law is not a game of hide and seek but practical real life conclusions. So viewed, we are constrained to hold that Burmah Steel, a government company though, is but the alter ego of the Central Government and must, therefore, be treated as definitionally caught in the net of 'State' since a juristic veil worm for certain legal purposes cannot obliterate the true character of the entity for the purposes of constitutional law.'
19. In Ajay Hasia v. Khalid Mujip (supra) a question arose whether a Society registered under the Societies Registration Act is an authority falling within the definition of 'State' in Art. 12 of the Constitution and to was held that where a Corporation is an instrumentality or agency of the Government, it must be held to be an 'authority' within the meaning of Art. 12 and hence subject to the same basic obligation to obey the Fundamental Rights as the Government. It was further held : in (Paras 11 and 12 at page 113) of 1981-I L.L.J. 103
'It is immaterial for determining whether a Corporation is an authority whether the Corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The inquiry has to be not as to how the jurisdic person is born but why it has been brought into existence. The Corporation may be a statutory corporation created by a statue or it may be a Government company or a company formed under the Companies Act or it may be a society registered under the Societies Registration Act or any other similar statute. Whatever be its genetical origin, it would be an 'authority' within the meaning of Art. 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression 'authority' in Art. 12. A juristic entity which may be 'State' for the purpose of Parts III and IV would not be so for the purpose of Part XIV or any other provision of the Constitution.'
20. In A. L. Kalra v. P. & E. Corn. of India Ltd. 1984-II L.L.J. 186 was held that the Project and Equipment Corporation of India Ltd. is an authority within the meaning of Art. 12 of the Constitution of India. By so holding the Supreme Court relied on Ajay Hasis v. Khalid Mujib (supra).
21. Rashtriya Mill Mazdoor Sangh v. Model Mills, Nagpur (supra) was a case which dealt with a sick mill, which was taken over by the Government under S. 18A of the Industrial Development and Regulation Act. The question arose whether by means of the appointment of Authorised Controller under S. 18A, it would be an industry carried on under the authority of Department of Central Government and whether they would be governed by the Bonus Act. It was observed in paragraph 20 at page 516 as follows :-
'If on the issue of a notified order appointing an authorised controller under S. 18A, the management of the industrial undertaking undergoes a change, yet it does not become an establishment engaged in an industry carried on by the department of the Central Government, its employees would not be excluded from the operation of the Bonus Act as provided in S. 32(iv).'
22. The next case I may refer to will be a ruling of a Division Bench of this Court, to which I was a party. In C. V. Raman and others v. Bank of India, Southern Region (supra) the question as to whether the Nationalised Banks and State Bank of India are establishments under the Central Government, so as to attract S. 4(1)(c) of the Shops Act was considered in that ruling. It was held in the headnote :-
'It cannot be gainsaid that the principle applicable to the determination of an authority under Art. 12 can bodily be imported in 'deciding the meaning of 'Establishment under the Government.' However, the line of reasoning namely, the theory of deep and pervasive control must prevail to find out whether the statutory corporations are under the Central Government or functioning independently. It is not correct to state that the control of Government of India relates only to matters of policy as adumbrated under S. 8 of Central Act V of 1970. On the contrary, there is every conceivable control over (1) Capital funds (2) Location of Head Offices, at such places as the Central Govt. may direct (3) Power of Central superintendence (4) Constitution of the Board by the Central Government (5) The Custodian holding officer under the pleasure of the Central Government (6) The Policy of the Central Govt. to be followed under S. 8(7) The power of the Central Government to make a scheme to carry out the provisions of the Act, the custodian being a public servant and (8) Regulation to be made after sanction of the Central Government.
23. Therefore, it is clear from the above distinctive provisions that the finance flows from the Govt. of India. The appointment of Directors, the reduction and enhancement of capital, either splitting up or amalgamation of the various banks and the net profit of all the nationalised banks resting with the Govt. clearly indicate that the voice of the Nationalised Banks is the voice of the Central Govt. The Nationalised Bank is merely His Master's Voice.
In order to fall within the expression 'establishment under the Govt.' it need not be a department of the Govt. If really the intention of the Law Makers was to comprehend only departments of the Govt. within the expression 'establishment under the Govt.' nothing would have been easier than to state a department of a Government under S. 4(1)(c) of the Shops Act.
The control of the Govt. of India over the Nationalised Banks is enormous and hence such banks are exempted from the Shops Act.'
I am afraid that none of the cases dealing with Art. 12 of the Constitution of India or any other Act like the Shops and Establishment Act in the last of the Division Bench ruling cited can come into play for interpretation of S. 2(a)(i) of the Industrial Disputes Act. Of course it is true that a welfare Government now-a-days embarks upon every conceivable activity, both commercial and non-commercial, the object being the welfare of the people. But that is far from saying notwithstanding a legal personality being obtained by a Government company incorporated under the Companies Act or a separate statute under the Societies Act, it could still be an industry carried on by the Government. In the Heavy Engineering case (supra) it has been construed as directly by the Government as a departmental activity. It is that test which will have to be applied notwithstanding the expansive activities of a modern welfare Government.
24. In case arising under Art. 12 of the Constitution of India, the anxiety of the courts has been to bring all cases of employees under the protective umbrella of fundamental rights. The guidelines adopted for interpreting Art. 12 cannot be imported in the instant case. This is notwithstanding the fact that all the shares are owned by the Government. The President appoints the Board of Directors, the Department of Heavy Industry supervises the writ petitioner company. Again this is notwithstanding the fact that in the report for 1982-83 of the Government of India, Ministry of Industry. Department of Heavy Industry, already referred to in paragraph 4(iii) states that the Government Directors on the Board of Public Sector Undertakings who function as eyes and ears of the Department keep in close and continuous touch with the Public Sector Undertakings like the writ petitioner. Neither the mode of control nor the extent of control will have any relevance in deciding this issue. The reason can be culled out by referring to one of the rulings of the Bombay High Court, viz, Abdul Rehaman v. Mrs. E. Paul (supra). In paragraph 9 it was observed :
'The phrase 'under the authority of the Central Government' as contained in S. 2(a)(i) must mean and is intended to apply to industries carried on directly under the authority of the Central Government. Industries which are carried on for their own purposes by incorporated commercial corporations which are governed by their own constitutions, as authorised by the Indian Companies Act, cannot be described as carried on under the authority of the Central Government. The obvious reason to support the above finding is that these corporation are independent legal entities and run the industries for their own purposes. Even when the Central Government controls these corporations, their industries are worked under the authority of their own constitutions or charters.'
The argument was that in so far as the commercial corporations involved in that case, where purchased by the Government of India and the whole of the share-capital of the company came to be acquired by the Government of India, it was an industry carried on by or under the authority of the Central Government. An argument similar to the petitioner herein was also raised in that case, viz., the Central Government was the owner of the whole share capital. The Article of Association make it abundantly clear that the industry was carried on by the Central Government and it was the President of India who was exercising control. The learned Judge observed in paragraph 8 :-
'It appears to me that inspite of the ownership of the shares being vested in the Central Government the company has independent existence in law. The company also carries on its business according to the constitution as contained in its Memorandum of Association and Articles of Association. The business is carried on even today through Directors appointed in accordance with the provisions of the Companies Act. The Directors would be continuously liable for misfeasance having regard to the provisions of the Companies Act. The question under the circumstances is as to whether inspite of the above facts can it be said that the industry, viz, Masagan Dock Ltd. is carried on by or under the authority of the Central Government. Obviously Mazagan Dock is not a department of the Central Government. Though under the constitution of the company directions may be given by the President, the Company is not working directly under the authority of the President or the Central Government. Having regard to the ownership of the shares being in the Central Government the Directors of the company can be nominated and some of the present Directors are officers of Ministry of Defence. Director No. 4 mentioned in paragraph 7 of the petition is the Chairman of the Bombay Port Trust and is not an officer of the Central Government. The ordinary business affairs of the company are carried on through the Board of Directors and the Chairman and cannot be in law considered as carried on by the Central Government or under the authority of the Central Government. The employees of the company cannot be said to be the servants and or employees of the Government. The remuneration that is paid to the Directors and or the other workmen is not paid by the Central Government, and is paid by the company as such. If at all it is intended that the Central Government should be 'appropriate Government' in connection with the industry the company may be notified as controlled industry and would thereafter be dealt with by the Central Government as 'appropriate Government' under the provisions of the Industrial Disputes Act.'
25. For all these reasons I conclude that the argument of the petitioner has to be rejected and it must be held that the State Government is the appropriate Government with regard to the disputes in question. In vies of this conclusion, I do not think that it is necessary for me to decide as to whether even at this preliminary stage this court should interfere exercising jurisdiction under Art. 226 of the Constitution of India, except to note the arguments of Mr. A. L. Somyaji on this aspect.
26. Accordingly the writ petition will stand dismissed with costs of the second respondent. Counsel's fee, Rs. 500/-, one set.