Madras High Court
The General Manager vs The Controlling Authority For Mahe on 1 February, 2011
Author: K.Chandru
Bench: K.Chandru
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 01.02.2011
CORAM
THE HONOURABLE MR.JUSTICE K.CHANDRU
W.P.NOs.13655 of 2008 and 25050 and 25051 of 2009
and
M.P.Nos.1 of 2008 and 1 and 1 of 2009
The General Manager,
The Cannannore Spinning and Weaving Mills,
A unit of NTC (APKK&M) Ltd.,
Palloor,
Mahe. .. Petitioner in
W.P.No.13655 of 2008
The Cannannore Spinning and Weaving Mills,
A unit of NTC (APKK&M) Ltd.,
Palloor,
Mahe.
Rep by its Manager (Personnel) .. Petitioner in
W.P.Nos.25050 and
25051 of 2009
Vs.
1.The Controlling Authority for Mahe
under the Payment of Gratuity Act and
Labour Officer,
Karaikal.
2.N.K.Krishnan .. Respondents in
W.P.No.13655 of 2008
1.The Appellate Authority
under the Payment of Gratuity Act, 1972,
Labour Department Complex (II) Floor,
Vazhudavur Road,
Gandhi Nagar,
Puducherry.
2.The Controlling Authority for Mahe
under the Payment of Gratuity Act, 1972 and
Labour Officer,
Karaikal. .. Respondents 1 and 2 in
W.P.Nos.25050 and
25051 of 2009
3.E.V.Narayanan .. 3rd Respondent in
W.P.No.25050 of 2009
K.K.Nanu .. 3rd respondent in
W.P.No.25051 of 2009
W.P.No.13655 of 2008 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the first respondent and quash its order dated 7.5.2008 made in P.G.A.No.9 of 2007.
W.P.Nos.25050 and 25051 of 2009 are preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the 1st Respondent and quash its order dated 30.12.2008 made in Appeal Nos.1 and 2 of 2006 confirming the order of the 2nd Respondent dated 15.12.2005 made in P.G.A.Nos.3/2005/A1 and 4/2005/A1 in so far as the orders hold that the Respondents have jurisdiction and that the 3rd Respondent is entitled to the difference in amounts.
For Petitioner : Mr.P.John
for M/s.T.S.Gopalan & Co.
in all writ petitions
For Respondents : Ms.N.Mala, GP(P) for R-1
Mr.C.Rajan for R-2
in W.P.No.13655 of 2008
Mr.R.Murali, GA for RR1 and 2
Mr.S.Vaidyanathan for R-3
in W.P.Nos.25050 and 25051 of 2009
- - - -
COMMON ORDER
All the three writ petitions are filed by the same petitioner company, i.e. Cannannore Spinning and Weaving Mills, a unit of NTC (APKK&M) Ltd., at Palloor (Mahe) represented by its Manager (Personnel).
2.In the first writ petition, the petitioner management challenged an order of the Controlling Authority under the Payment of Gratuity Act, i.e. Labour Officer, Karaikal made in P.G.A.No.9/2007. By the impugned order, dated 7.5.2008, the first respondent Controlling Authority had rejected the preliminary objection raised by the management and directed them to appear for a further enquiry. Hence the petitioner has filed the writ petition. In the writ petition, initially notice of motion was ordered on 12.6.2008 and an interim stay was granted. Subsequently, it was admitted on 3.12.2008.
3.Thereafter, the same mill has filed two other writ petitions, challenging the order of the appellate authority under the Payment of Gratuity Act made in Appeal No.1 of 2006 and Appeal No.2 of 2006, dated 30.12.2008 confirming the order of the Controlling Authority made in P.G. Application No.3 of 2005 and P.G. Application No.4 of 2005, dated 15.12.2005. The contesting respondents in those two writ petitions, who are employees of the petitioner mill filed an application before the controlling authority for payment of gratuity on account of their retirement on superannuation from the mill. Apart from raising the very same preliminary objection regarding maintainability, even on merits, evidence was let in. The authority held that the delay in filing the application was reasonable and there was no jurisdiction on the part of the mill to effect various deductions including festival advance, attendance incentive advance, bonus advance, Cooperative Stores due and tour advance from the employee. The Act did not provide for any such deductions on gratuity especially in the light of Sections 13 and 14 of the Payment of Gratuity Act. As against the said order, appeals have been filed under Section 7(7) of the Payment of Gratuity Act before the appellate authority. An additional issue was raised, i.e. the mill was taken over by the Sick Textile Undertakings (Nationalisation) Act, 1974 and further transferred to NTC with effect from 1.4.1974. As per Section 6 of the Nationalisation Act, the present NTC owned Subsidiary Textile Corporation, i.e. NTC (APKK&M) Ltd., having its registered office is at Bangalore. They are located in Andhra Pradesh, Karnataka, Kerala and Mahe. The mill is wholly owned and controlled by the NTC limited which is the Central Government Company. Therefore, the appropriate Government in respect of the petitioner mill is the Central Government. Hence, the Union Territory of Puducherry has no jurisdiction to deal with the same.
4.Before the appellate authority, objections raised were twofold. The first was that under Section 2(a)(i), the appropriate Government means in relation to an establishment belonging to or under the control of the Central Government, it is the Central Government which is the appropriate authority and in any other case, it is the State Government. The first submission was that the NTC (APKK&M) Ltd. is an establishment belonging to or under the control of the Central Government. Therefore, the official respondent constituted by the Administrator of the Union Territory cannot be the authority.
5.The second argument was that even if it is not an establishment belonging to or under the control of the Central Government and in such case, it is only the State Government which can notify the authorities under the Act. But Union Territory of Puducherry cannot be considered to be the State Government. Reliance was placed upon a judgment of the Supreme Court in Goa Sampling Employees' Assn. v. General Superintendence Co., reported in AIR 1985 SC 35. The authority had rejected the said condition and held that under Article 239A read with Section 3(8) of the General Clausea Act, the Administrator of the Union Territory has power to notify the authority even as a delegate of the President.
6.The second contention raised was that since it is wholly owned or controlled by the Central Government, the appropriate Government is the Central Government. The authority had rejected the said argument. On the said issue, not much of argument was addressed before the authority. But, however before this court Mr.P.John appearing for Mr.T.S.Gopalan and Co. argued on the said issue also. On the merits of the case, the authority had agreed with the controlling authority and held no deductions are permissible and Sections 13 and 14 will squarely apply.
7.Mr.S.Vaidyanathan, learned counsel appearing for the contesting respondents contended that the issues raised are not valid. The authorities had correctly decided the matter in terms of law.
8.In view of the above, the following issues arise for consideration :
(1)In respect of the petitioner mill, whether the Central Government is the appropriate authority since it is situated in the Union Territory of Puducherry (Mahe region)?
(2)Whether the petitioner mill belongs to or under the control of the Central Government in terms of Section 2(a)(i) and therefore, the Central Government is the appropriate Government ?
(3)Whether deductions made from the gratuity on account of other amounts due is justified ?
9.Insofar as the first question is concerned, the issue is no longer res integra. This court had an occasion to consider the said issue in W.P.No.2471 of 2007, etc bath cases, dated 4.1.2011 in Muthu Rathina Arangam Matriculation school, Kundanpalayam, Puducherry-605 009 Vs. The Government of Pondicherry, represented by Additional Secretary to Government (Labour), Labour Department, General Secretariat, Puducherry and another and held in paragraphs 18 to 26 as follows:
"18.It is necessary to refer to certain decisions of the Supreme Court interpreting the scope of Article 239 of the Constitution and also the powers of an Administrator of an Union Territory. In State of Bombay v. Salat Pragji Karamsi reported in 1957 SCR 745 = AIR 1957 SC 517, the Supreme Court held that the Chief Commissioner of the Union Territory acting under the orders of the President can issue statutory notifications under the powers vested in any statute. In paragraphs 14 and 15 of the judgment, the Supreme Court observed as follows:
"14.Article 239 of the Constitution relates to administration of Part C States and provides:
Subject to the other provisions of this Part, a State specified in Part C of the First Schedule shall be administered by the President acting, to such extent as he thinks fit, through a Chief Commissioner or a Lieutenant-Governor to be appointed by him....
15. This Article has been relied upon for urging that in a Part C State, the administration had to be carried on by the President acting through a Chief Commissioner. But this does not take away the powers of the Chief Commissioner given to him under any other Statute or Order. The Chief Commissioner of Kutch under Section 1 of the Bombay Act, had the power to issue notifications making that Act operative in Kutch or any part of Kutch and those powers were not affected by Article 239 of the Constitution particularly because of clause 15 of the Adaptation of Laws Order, 1950, which preserved these powers of the Chief Commissioner. Therefore, the notification issued by the Chief Commissioner on November 28, 1950 was valid and issued under legal authority; and the Act came into force in the parts to which the notification made it so applicable. We have therefore, come to the conclusion that the learned Judge was in error in holding that the notification was not a valid one and insofar as that was the basis of the acquittal of the accused, the judgment under appeal must be set aside."
19.While dealing with the notification issued by the Lieutenant Governor of the Union Territory of Delhi, the Supreme Court in its judgment in Om Prakash v. Union of India reported in (1988) 1 SCC 356 held that the Lieutenant Governor exercises his power validly only subject to the control and further orders of the President. In paragraph 12, the Supreme Court observed as follows:
"12....Granting that the 1957 Act desired to empower the Central Government to acquire lands in Delhi for the purposes of the said Act and even granting that such power has to be exercised through the Lt. Governor because of the notification under Article 239(1), such power can also stand side by side with the wider power of the Lt. Governor to acquire lands for a public purpose. There is nothing in the 1957 Act which prohibits the Lt. Governor taking such steps as he desires, under the powers available to him, to carry out the planned development of Delhi in consonance with the plans approved or finalised under the 1957 Act. Viewed in this light, the powers of the Lt. Governor under Section 4 of the Land Acquisition Act can be read as additional to the powers of the Central Government under the Delhi Development Act. The 1957 Act does not destroy but only supplements the 1894 Act. This is the view taken by the High Court and we agree with it."
20.The Supreme Court had an occasion to consider the legislative power of the Puducherry Legislature and its competence to enact laws vide its judgment in Mahe Beach Trading Co. v. Union Territory of Pondicherry reported in (1996) 3 SCC 741. In paragraphs 16 to 19, the Supreme Court held as follows:
"16.Before dealing with the second contention raised by the learned counsel for the appellant, it would be more appropriate to deal with the third contention. It was submitted that the Pondicherry Legislature had no plenary powers as the same vested only in Parliament. The submission was that the Pondicherry Legislature could not make retrospective laws, or laws contrary to the laws made by Parliament, under Articles 239 and 239-A of the Constitution. Elaborating further it was submitted that the Pondicherry Legislature did not have the power to pass the Validation Act which had the effect of re-enacting and imposing restrictions on diesel and petrol with retrospective effect.
17.Article 239-A of the Constitution provides for Parliament creating, by law, for the Union Territory of Pondicherry, a body to function as a legislature with such constitution, powers and functions as may be specified in the law. It was in pursuance of this that [The] Government of Union Territories Act, 1963 was passed by Parliament and the said Act was made applicable to the Union Territory of Pondicherry from 1-7-1963. This Act provided for the setting up of Legislative Assemblies and Council of Ministers for the Union Territories and it was under this Act that the Legislative Assembly for the Pondicherry Union Territory was constituted. Section 18 of [The] Government of Union Territories Act, 1963 deals with the extent of the legislatures power and it reads as follows:
Extent of legislative powers.(1) Subject to the provisions of this Act, the Legislative Assembly of a Union Territory may make laws for the whole or any part of the Union Territory with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution insofar as any such matter is applicable in relation to Union Territories.
(2) Nothing in sub-section (1) shall derogate from the powers conferred on Parliament by the Constitution to make laws with respect to any matter for a Union Territory or any part thereof.
18.Reading Article 239-A and Section 18 of [The] Government of Union Territories Act, 1963 together, it is clear that the Pondicherry Assembly had the power to make laws for the whole or part of Pondicherry with respect to any of the matters enumerated in the State List or the Concurrent List. Levy of sales tax would undoubtedly be within its legislative competence by virtue of Entry 54 of List II of the Seventh Schedule. The effect of Validation Act being promulgated was that the levy on diesel and petrol would no longer be regarded as one being made under municipal decree of 1880 by the Municipal Council but, in law, will have to be regarded as being a levy made by a competent legislature exercising its powers by virtue of Section 18 of [The] Government of Union Territories Act, 1963 read with Article 239-A of the Constitution.
19.By virtue of [The] Government of Union Territories Act, 1963, the Pondicherry Legislature was given the powers which any other State Legislature had to enact laws with respect to the matters enumerated in the State List or the Concurrent List. Of course, sub-section (2) of Section 18 provides that the powers conferred under sub-section (1) shall not derogate from the powers conferred on Parliament by the Constitution to make laws with respect to any matter for the Union Territory. But, there is no such law relating to the imposition of sales tax on diesel and petrol which has been enacted by Parliament, while the Validation Act has imposed such a tax. It is not in dispute, and now it is well settled, that the State Legislature as well as Parliament has the power to legislate with retrospective effect and also to pass a Validation Act. This being so, and the powers of the legislature of Pondicherry being coextensive with the powers of a State Assembly, by virtue of Section 18 of [The] Government of Union Territories Act, 1963, there is no reason for this Court to hold that the Pondicherry Legislature could not enact a law with retrospective effect. In other words, by virtue of Section 18 of [The] Government of Union Territories Act, 1963, Parliament vested with the Pondicherry Legislature the plenary powers to legislate with respect to the matters in List II and List III of the Seventh Schedule and the said power has been validly exercised with the enactment of the Validation Act."
The Supreme Court by the above observations recognised the right of the Puducherry Legislature to enact law on par with a State assembly by virtue of delegation of powers granted by the Parliament under the Union Territories Act, 1963.
21.A similar question regarding the power of the President vis-a-viz Union Territory and the position of an Administrator of an Union Territory came to be considered by the Supreme Court in Government of NCT Delhi v. All India Central Civil Accounts, JAO's Assn., reported in (2002) 1 SCC 344. In paragraphs 2 and 8, the Supreme Court observed as follows:
"2....The administration of the Union Territories is carried on by the Union, through an Administrator. As stated by this Court in New Delhi Municipal Council v. State of Punjab1 the President, who is the executive head of a Union Territory does not function as the head of the Central Government, but as the head of the Union Territory under powers specially vested in him under Article 239 of the Constitution thereby occupying a position analogous to that of a Governor in a State. Though the Union Territories are centrally administered under the provisions of Article 239 they do not become merged with the Central Government as has been stated by this Court in Satya Dev Bushahri v. Padam Dev2. However, the Administrator is competent to exercise all powers vested in him by the Government of National Capital Territory of Delhi Act, 1991 (1 of 1992) (hereinafter referred to as the Act). The Administrator functions as a delegate of the President and will have to act under the orders of the President, that is, the Central Government.
.....
8.....The position in law is clear that though the Union Territories are centrally administered under the provisions of Article 239 of the Constitution, they do not become merged with the Central Government and they form part of no State and yet are the territories of the Union, as has been held by this Court in Satya Dev Bushahri v. Padam Dev2 and NDMC v. State of Punjab1. Thus, it must be held that the Union Territory does not entirely lose its existence as an entity though large control is exercised by the Union of India....."
22.Once again, similar view was reiterated by the Supreme court in Chandigarh Administration. v. Surinder Kumar reported in (2004) 1 SCC 530. In paragraph 1, it was observed as follows:
"....Under Article 239 of the Constitution of India the Union Territories are administered by the President of India acting through an administrator to be appointed by him. But this does not mean that the Union Territories become merged with the Central Government. They are centrally administered but they retain their independent entity...."
23.The power of the Lieutenant Governor of the Union Territory in sanctioning prosecution under Section 50 of the Prevention of Terrorism Act, 2002 came to be considered by the Supreme Court vide its judgment in State (NCT of Delhi) v. Navjot Sandhu reported in (2005) 11 SCC 600. The court dealt with the ratio of the Goa Sampling Employees' Association case (cited supra) and upheld the power of the Lieutenant Governor in granting sanction for prosecution by holding that he possesses a specific statutory delegation. It is necessary to refer to the following passage found in paragraph 10, which reads as follows:
"10...The reliance sought to be placed on Goa Sampling Employees Assn. v. General Superintendence Co. of India (P) Ltd.2 is rather misconceived. That case turned on the interpretation of the expression appropriate Government occurring in Section 10 of the Industrial Disputes Act, 1947. The industrial dispute pertained to the workmen employed at Mormogao Port which is located in the then Union Territory of Goa, Daman and Diu. It was contended by the employer that the Central Government was not competent to refer the dispute to the Tribunal for adjudication. This contention found favour with the High Court of Bombay which held that the Administrator appointed under Article 239 of the Constitution is the State Government for the Union Territory of Goa and is the appropriate Government within the meaning of Section 2(a) of the Industrial Disputes Act. The judgment of the High Court was reversed by this Court after referring to Articles 239 and 239-A and the provisions of the Government of Union Territories Act, 1963 and the definitions of the General Clauses Act and observed thus: (SCC p.217, para 17) On a conspectus of the relevant provisions of the Constitution and the 1963 Act, it clearly transpires that the concept of State Government is foreign to the administration of Union Territory and Article 239 provides that every Union Territory is to be administered by the President. The President may act through an administrator appointed by him. Administrator is thus the delegate of the President. His position is wholly different from that of a Governor of a State. Administrator can differ with his Minister and he must then obtain the orders of the President meaning thereby of the Central Government. Therefore, at any rate the administrator of Union Territory does not qualify for the description of a State Government. Therefore, the Central Government is the appropriate Government. That decision, in our view, has no relevance. This Court was not called upon to consider a specific provision like Section 50 or Section 2(1)(h) of POTA. We are, therefore, of the view that by virtue of specific statutory delegation in favour of the Administrator who is constitutionally designated as the Lieutenant Governor as well, the sanction accorded by the said authority is a valid sanction under Section 50 of POTA...."
24.The Supreme Court in its judgment in Sushil Flour Dal & Oil Mills v. Chief Commissioner reported in (2000) 10 SCC 593 held that the Administrator of the Union Territory is a delegate of the President and the notification issued by him is valid in law. In paragraphs 2 to 4, the Supreme Court observed as follows:
"2.The appellants filed a writ petition in the High Court of Punjab and Haryana challenging notifications fixing the rate under Section 5(1) of the Punjab General Sales Tax Act in relation to the Union Territory of Chandigarh. The notifications were issued by the Administrator (Chief Commissioner) of the territory. The challenge was upheld by the learned Single Judge but it failed in appeal. It is the judgment under appeal which is questioned before us.
3.The argument which found favour with the learned Single Judge was this: the impugned notifications, having been issued by a delegate of the Central Government, were bad because the Central Government could not further delegate its power to the Administrator. The learned Single Judge took the view that the Central Government having itself been delegated legislative power under the said Act, it could not further delegate it to the Administrator.
4.The Division Bench was, in our view, right in pointing out that there was no delegation of power. Under Part VIII of the Constitution the power to administer the Union Territories vested in the President and the President could exercise that power directly or through an Administrator appointed by him. An Administrator so appointed was the medium through which the President exercised the function of administering the Union Territories. Reliance was also placed by the Division Bench, and rightly, upon Section 3(8) of the General Clauses Act which provides that in relation to the administration of the Union Territories, the Central Government means the Administrator thereof acting within the scope of the authority given to him under Article 239 of the Constitution. No amplification of this position seems to be necessary."
25.While validating a reference made under Section 10(1) of the I.D. Act by the respondent Union Territory of Puducherry, a learned Judge of this court in W.P.M.P.No.30534 of 2004 and W.V.M.P.No.1642 of 2004 in W.P.No.25097 of 2004, dated 04.11.2004 in Sri Bharathi Mills, A unit of National Textiles Corporation (TN &P) Ltd. Vs.The Commissioner of Labour, Government of Pondicherry, Pondicherry and others after referring to Goa Sampling Employees' Association case (cited supra), in paragraph 8 observed as follows:
"8.Section 2-A of the Industrial Disputes Act, refers to the appropriate Government meaning one as Central Government and another as State Government. If the Government of Pondicherry cannot be considered to be a State Government as it has been held by the Apex Court, Section 2(a)(ii) relating to any other dispute as to the competent authority viz., State Government is not applicable to this case and thereby, the only appropriate authority, who is competent is the Central Government. Under Section 2(a)(i) of the Act, as the Government of Pondicherry/Union Territory is administered by the President of India under Article 239 of the Constitution of India and the exclusion of such union territory from the definition of State Government, it must be held that the Government of Pondicherry is competent to exercise the power by virtue of definition under Section 2(a)(i) of the I.D. Act."
26.Therefore, inasmuch as the Administrator had acted on behalf of the President of India in terms of Article 239 in having issued the notification, no fault can be found. The impugned notifications do not suffer from want of legislative sanction by the ESI Act. Hence the first objection stands overruled.
10.The counsel appearing for the petitioner Mr.P.John relied upon a judgment of the Allahabad High Court in M/s.Muir Mills, Kanpur Vs. Presiding Officer, Labour Court Vth, Kanpur and another reported in 2008 LLR 649 for contending that the NTC Mill is an industry carrying on by the authority of the Central Government. Therefore, the appropriate Government is the Central Government. Even this issue has been squarely covered by the judgment of the Supreme Court in SAIL Vs. National Union Waterfront Workers reported in 2001 (7) SCC 1. In that case, the Supreme Court dealt with the definition of the word "appropriate Government" found in the Contract Labour Abolition and Regulation Act, 1970. That case was referred to by the Supreme Court in Tata Memorial Hospital Workers Union Vs. Tata Memorial Centre reported in 2010 (8) SCC 480, wherein it held in paragraphs 40 to 47 as follows:
"40.The question concerning interpretation of the concept of appropriate Government in Section 2(1)(a) of the CLRA Act, 1970 and in Section 2(a) of the Industrial Disputes Act, 1947 was subsequently referred to a Constitution Bench in SAIL v. National Union Waterfront Workers1. The Constitution Bench examined the relevant provisions and the judgments including those in Ramana Dayaram Shetty212 and Ajay Hasia313. The question decided by the Constitution Bench of this Court in Ajay Hasia13 was with respect to Jammu and Kashmir Regional Engineering College, Srinagar, which was registered as a society under the Jammu and Kashmir Registration of Societies Act, 1898 and wherein it was held to be State within the meaning of Article 12 of the Constitution.
41. In SCC para 37 of the judgment in SAIL1, this Court held that merely because the government companies, corporations and societies are instrumentalities or agencies of the Government, they do not become agents of the Central or the State Government for all purposes. The Court held as follows: (SCC p.27) 37. We wish to clear the air that the principle, while discharging public functions and duties the government companies/corporations/ societies which are instrumentalities or agencies of the Government must be subjected to the same limitations in the field of public lawconstitutional or administrative lawas the Government itself, does not lead to the inference that they become agents of the Centre/State Government for all purposes so as to bind such Government for all their acts, liabilities and obligations under various Central and/or State Acts or under private law.
42. In SCC para 38, this Court thereafter held as follows: (SAIL case1, SCC pp.27-28) 38. From the above discussion, it follows that the fact of being an instrumentality of a Central/State Government or being State within the meaning of Article 12 of the Constitution cannot be determinative of the question as to whether an industry carried on by a company/corporation or an instrumentality of the Government is by or under the authority of the Central Government for the purpose of or within the meaning of the definition of appropriate Government in the CLRA Act. Further, the definition of establishment in the CLRA Act takes in its fold purely private undertakings which cannot be brought within the meaning of Article 12 of the Constitution. In such a case, how is appropriate Government determined for the purposes of the CLRA Act or the Industrial Disputes Act? In our view, the test which is determinative is: whether the industry carried on by the establishment in question is under the authority of the Central Government. Obviously, there cannot be one test for one part of the definition of establishment and another test for another part. Thus, it is clear that the criterion is whether an undertaking/instrumentality of the Government is carrying on an industry under the authority of the Central Government and not whether the undertaking is an instrumentality or agency of the Government for purposes of Article 12 of the Constitution, be it of the Central Government or the State Government. (emphasis supplied)
43. In SCC para 39, this Court further held as follows: (SAIL case1, SCC p.28) 39. To hold that the Central Government is the appropriate Government in relation to an establishment, the court must be satisfied that the particular industry in question is carried on by or under the authority of the Central Government. If this aspect is kept in mind it would be clear that the Central Government will be the appropriate Government under the CLRA Act and the ID Act provided the industry in question is carried on by a Central Government company/an undertaking under the authority of the Central Government. Such an authority may be conferred, either by a statute or by virtue of the relationship of principal and agent or delegation of power. Where the authority, to carry on any industry for or on behalf of the Central Government, is conferred on the government company/any undertaking by the statute under which it is created, no further question arises. But, if it is not so, the question that arises is whether there is any conferment of authority on the government company/any undertaking by the Central Government to carry on the industry in question. This is a question of fact and has to be ascertained on the facts and in the circumstances of each case.
44. In para 40 of SAIL case1 the Constitution Bench states that it shall refer to the cases of this Court on this point and thereafter examines in paras 41 to 44 the earlier referred judgments in Heavy Engg. Mazdoor Union2, Hindustan Aeronautics7, Rashtriya Mill Mazdoor Sangh8 and Food Corporation of India010.
45. In para 41 of the judgment in SAIL case1, the Constitution Bench examined the judgment in Heavy Engg. Mazdoor Union case2. In Heavy Engg. Mazdoor Union2 the Court had observed that an inference that the corporation was the agent of the Government might be drawn where it was performing in substance governmental and not commercial functions. The Constitution Bench disagreed with the distinction thus made between the governmental activity and commercial function of government companies. Barring this limited disagreement, however at the end of para 41 the Constitution Bench observed that it is evident that the Court correctly posed the question whether the State Government or the Central Government was the appropriate Government and rightly answered it. In para 42, the Constitution Bench examined the judgment of Hindustan Aeronautics Ltd.7 The Constitution Bench noted that the judgment in Heavy Engg. Mazdoor Union case2 was followed in Hindustan Aeronautics7 and it had taken note of the factor that if there was any disturbance of industrial peace in Barrackpore, the appropriate Government concerned for the maintenance of internal peace was the West Bengal Government. The Court observed that the factors which weighed with the Court could not be said to be irrelevant.
46. In para 43 of SAIL case1 the Constitution Bench examined the judgment in Rashtriya Mill Mazdoor Sangh8 wherein although an authorised Controller was appointed to replace the management of the respondent Model Mill, Rashtriya Mill Mazdoor Sangh8 judgment had held that the undertaking could not be held to be carried on under the authority of the Central Government. The Constitution Bench quoted the observations from the judgment with approval. In para 44 the Constitution Bench referred to the Food Corporation of India case010. It noted that Food Corporation of India10 judgment had followed the judgments in Heavy Engg. Mazdoor Union2 and Rashtriya Mazdoor Mill Sangh8 to hold that the State Government was the appropriate Government pertaining to the regional offices and warehouses of FCI under the CLRA Act. At the end of this para the Constitution Bench concluded we find no illegality either in the approach or in the conclusion arrived at by the court in these cases. (emphasis supplied)
47. In paras 45 and 46, thereafter once again the Constitution Bench turned to the judgment in Air India case111 and in SCC para 46 it concluded as follows: (SAIL case1, SCC pp.32-33) 46. We have held above that in the case of a Central Government company/undertaking, an instrumentality of the Government, carrying on an industry, the criteria to determine whether the Central Government is the appropriate Government within the meaning of the CLRA Act, is that the industry must be carried on by or under the authority of the Central Government and not that the company/undertaking is an instrumentality or an agency of the Central Government for purposes of Article 12 of the Constitution; such an authority may be conferred either by a statute or by virtue of the relationship of principal and agent or delegation of power and this fact has to be ascertained on the facts and in the circumstances of each case. In view of this conclusion, with due respect, we are unable to agree with the view expressed by the learned Judges on interpretation of the expression appropriate Government in Air India case111. (emphasis supplied)
11.After referring to various judgments on the above issue, the Supreme Court in the same judgment in paragraphs 59 to 63 held as follows:
"59.As far as an industry carried on by the Central Government is concerned, there need not be much controversy inasmuch as it would mean the industries such as the Railways or the Posts and Telegraphs, which are carried on departmentally by the Central Government itself. The difficulty arises while deciding the industry which is carried on, not by but under the authority of the Central Government. Now, as has been noted above, in the Constitution Bench judgment in SAIL1, the approach of the different Benches in the four earlier judgments has been specifically approved and the view expressed in Air India111 has been disagreed with. The phrase under the authority has been interpreted in Heavy Engg.2 to mean pursuant to the authority such as where an agent or servant acts under authority of his principal or master. That obviously cannot be said of a company incorporated under the Companies Act, as laid down in Heavy Engg. Mazdoor Union case2. However, where a statute setting up a corporation so provides specifically, it can easily be identified as an agent of the State.
60.The judgment in Heavy Engg. Mazdoor Union2 observed that the inference that a corporation was an agent of the Government might also be drawn where it was performing in substance governmental and non-commercial functions. The Constitution Bench in SAIL case1 has disagreed with this view in para 41 of its judgment. Hence, even a corporation which is carrying on commercial activities can also be an agent of the State in a given situation. Heavy Engg.2 judgment is otherwise completely approved, wherein it is made clear that the fact that the members or Directors of corporation and he is entitled to call for information, to give directions regarding functioning which are 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. The fact that entire capital is contributed by the Central Government and wages and salaries are determined by it, was also held to be not relevant.
61.In Hindustan Aeronautics7 the fact that the industrial dispute had arisen in West Bengal and that the appropriate Government in the instant case for maintaining industrial peace was West Bengal was held to be relevant for the Governor of West Bengal to refer the dispute for adjudication. In Rashtriya Mill Mazdoor case8 the fact that the authorised Controller was appointed by the Central Government to supervise the undertaking was held as not making any difference. The fact that he was to work under the directions of the Central Government was held not to render the industrial undertaking an agent of the Central Government.
62.In Food Corporation of India010 in spite of the fact that FCI is a specified industry under Section 2(a)(i) of the ID Act, 1947, this Court considered the definition of appropriate Government in the CLRA Act, 1970, and the State Governments were held to be the appropriate Governments for the regional offices and the warehouses situated in various States wherein the demand for regularisation of the services under the CLRA Act had arisen.
63.The propositions in SAIL1 are to be seen on this background viz. that merely because the government companies/corporations and societies are discharging public functions and duties that does not by itself make them agents of the Central or the State Government. The industry or undertaking has to be carried under the authority of the Central Government or the State Government. That authority may be conferred either by a statute or by virtue of a relationship of principal and agent, or delegation of power. When it comes to conferring power by statute, there is not much difficulty. However, where it is not so, and whether the undertaking is functioning under authority is a question of fact. It is to be decided on the facts and circumstances of each case."
In the light of the above, the second objection raised by the petitioner does not merit acceptance.
12.For the third objection raised by the petitioner, it must be noted that in the light of Sections 13 and 14 of the Payment of Gratuity Act, the petitioner cannot deduct any amounts from the gratuity payable on account of there being due under some other heads as the gratuity is not liable for attachment even in case of Civil Court decree and any undertaking to receive less gratuity than what is legally payable is overridden of Section 14 of the Payment of Gratuity Act.
13.In the light of the above, all the three writ petitions will stand dismissed. However, there will be no order as to costs. In the last two writ petitions, if moneys were already deposited with the appellate authority, the contesting respondents are at liberty to withdraw the same.
14.In respect of the first writ petition, only an order regarding the preliminary objection is alone under challenge. Though this court has held against the petitioner, the petitioner need not be driven to go before the authority for a further trial on the merits of the case, as it will be unnecessary and time consuming. Since the issues raised on other points have also been answered in relation to other two cases, it is suffice if the petitioner management is directed to compute the gratuity payable in accordance with law and pay it to the contesting respondent. In that WP, a direction to that effect will also be issued to the petitioner. Consequently, connected miscellaneous petitions stand closed.
vvk To
1.The Appellate Authority under the Payment of Gratuity Act, 1972, Labour Department Complex (II) Floor, Vazhudavur Road, Gandhi Nagar, Puducherry.
2.The Controlling Authority for Mahe under the Payment of Gratuity Act, 1972 and Labour Officer, Karaikal