Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 9332-9333 OF 2010
Nashik Workers Union …Appellant(s)
Versus
Hindustan Aeronautics Limited …Respondent(s)
J U D G M E N T
Dipak Misra, J.
The present appeals are directed against the judgment
and order dated 25.06.2009 passed by the High Court of
Judicature at Bombay in Letters Patent Appeal No. 84 of
2006 whereby the Division Bench has invalidated the order
of the learned single Judge rendered in Writ Petition No.
3562 of 1997 expressing the view that the State
Government is the appropriate Government in relation to
the respondent-Company for the purpose of the
Signature Not Verified
Digitally signed by
GULSHAN KUMAR
ARORA
Date: 2016.02.26
18:12:03 IST
Reason:
Maharashtra Recognition of Trade Unions and Prevention of
2
Unfair Labour Practices Act, 1971 (for short, “the 1971
Act”).
2. The facts which are essential to be stated for
adjudication of these appeals are that the appellant, Nashik
Workers Union, filed a complaint under the 1971 Act being
Complaint (ULP) No. 35 of 1990 for reinstatement of the
trainees with continuity of services and back wages. During
the pendency of the first complaint, as further employees
were relieved, another complaint being Complaint (ULP) No.
36 of 1990 was filed. With the passage of time, two other
complaints forming the subject matter of Complaint (ULP)
Nos. 44 of 1990 and 45 of 1990 also came to be registered
before the Presiding Officer-Judge, Labour Court, Nasik.
The Labour Court appreciated the material brought on
record, declared that the employer had engaged in unfair
labour practices in terminating the services of the
employees and, accordingly, directed for reinstatement of
the employees with continuity of service and full back wages
from the date of termination till reinstatement. The said
order was to be complied with within one month from the
date of the order, that is, 08.08.1994.
3
3. The aforesaid order passed by the Labour Court came
to be assailed in Revision Application (ULP) Nos. 140 of
1994 and 28-30 of 1995 before the Industrial Court. The
Industrial Court, Maharashtra at Thane affirmed the order
passed by the Labour Court and dismissed the revision
th
applications vide order dated 8 July, 1997.
4. The orders passed by the Labour Court and Industrial
Court were assailed in Writ Petition No. 3562 of 1997
wherein a contention was raised that the “appropriate
Government” in respect of the dispute was the Central
Government and not the State Government and, therefore,
the 1971 Act would not apply and consequently, the
complaints filed by the workers’ union deserved to be
dismissed. The learned single Judge appreciating the
materials brought on record allowed the Writ Petition and
directed the employer to make an offer to some trainees as
and when regular vacancies arise for consideration and in
the event they fulfill the required qualification then to
consider them for regular job.
5. The aforesaid order was challenged by the employer by
preferring an intra-court appeal. Though the learned single
4
Judge had set aside the orders passed by the Labour Court
as well as of the Industrial Court, yet he had not accepted
the contention of the employer that in relation to it the
appropriate Government is the Central Government and,
therefore, complaint under the 1971 Act was not
maintainable. It was contended by the appellant before the
Division Bench that the Central Government is the
appropriate Government in relation to the employer
company and not the State Government and to bolster the
said submission reliance was placed on Steel Authority of
India and others v. National Union Waterfront Workers
1
and others and also on Hindustan Aeronautics Limited
& another v. Hindustan Aeronautical Canteen Kamgar
2
Sangh & others , ( HAL 2 ). That apart, inspiration was also
drawn from the order passed in Civil Appeal No. 5655 of
2008 dated 04.12.2008.
6. The Division Bench relying on the aforesaid decisions
opined that the appropriate Government for the purpose of
the Industrial Disputes Act, 1947 (for short, “the ID Act”) is
1
(2001) 7 SCC 1
2
(2007) 15 SCC 51
5
the Central Government which is the appropriate
Government in relation to the company and, accordingly,
the complaints filed by the Union against the company were
not maintainable. Being of this view, it allowed Appeal No.
84 of 2006 and set aside the finding recorded by the learned
single Judge. Be it noted, as the High Court arrived at the
said conclusion in Appeal No. 84 of 2006, it opined that the
other appeal being Appeal No. 144 of 2002 did not merit any
consideration. The aforesaid order is the subject matter of
scrutiny in these appeals.
7. We have heard Mr. Colin Gonsalves, learned senior
counsel for the appellant and Mr. S. Guru Krishna Kumar,
learned senior counsel for the respondent.
8. At the very outset, we think it pertinent to state that as
the Division Bench has not dwelt on the merits of the case
and only decided the appeal on the ground of
maintainability of the complaints, we shall confine our
address to the said facet only. The issue of appropriate
Government in relation to the respondent-company has a
history which compels us to travel in a time machine. Four
decades back, Hindustan Aeronautics Limited v.
6
3
Workmen and others , ( HAL 1 ), as the facts would reveal,
the Government of West Bengal had made a reference under
Section 10(1) of the ID Act for adjudication of certain issues
between the employees and the employer. The tribunal had
granted partial relief to the workmen. Feeling grieved by the
said award, the employer had preferred an appeal by special
leave before this Court. The competence of the Government
of West Bengal to make the reference which was challenged
before the tribunal was also assailed before this Court. It
was contended that as the Central Government owns the
entire bundle of shares in the company and appoints and
removes the Board of Directors as well as the Chairman and
the Managing Director and further all matters of importance
are reserved for the decision of the President of India and
ultimately executed in accordance with his directions, it is
unmistakably clear that that the company is in control of
the Central Government in the matter of carrying on the
industry owned by the company. In that backdrop it was
urged that industrial dispute in question concerned an
industry which was carried on “under the authority of the
Central Government” within the meaning of Section 2(a)(i) of
3
(1975) 4 SCC 679
7
the ID Act and hence, the Central Government was the only
appropriate Government to make the reference under
Section 10 of the said Act. The three-Judge Bench took
note of the fact that an identical submission was advanced
in Heavy Engineering Mazdoor Union v. The State of
4
Bihar & ors which was repelled by this Court. Be it noted,
the three-Judge Bench in HAL 1 reproduced a passage from
Heavy Engineering Mazdoor Union (supra) which is to the
following effect:-
“It is true that besides the Central Government
having contributed the entire share capital,
extensive powers are conferred on it, including the
power to give directions as to how the company
should function, the power to appoint directors
and even the power to determine the wages and
salaries payable by the company to its employees.
But these powers are derived from the company’s
memorandum of association and the articles of
association and not by reason of the company
being the agent of the Central Government. The
question whether a corporation is an agent of the
State must depend on the facts of each case.
Where a statute setting up a corporation so
provides, such a corporation can easily be
identified as the agent of the State as in Graham
5
v. Public Works Commissioners where Phillimore,
J. said that the Crown does in certain cases
establish with the consent of Parliament certain
officials or bodies who are to be treated as agents
of the Crown even though they have the power of
contracting as principals. In the absence of
4
(1969) 1 SCC 765
5
(1901) 2 KB 781 : 70 LJ KB 860 : 17 TLR 540
8
statutory provision, however, a commercial
corporation acting on its own 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. The fact that a
minister appoints the members or directors of a
corporation and he is entitled to call for
information, to give directions which 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,
(see State Trading Corporation of India Ltd. v.
6
Commercial Tax Officer, Visakhapatnam and
7
Tamlin v. Hannaford ) . Such an inference that the
corporation is the agent of the Government may
be drawn where it is performing in substance
governmental and not commercial functions. (cf.
London County Territorial and Auxiliary Forces
8
Association v. Nichols ).”
9. An effort was made to distinguish the said judgment
on the ground that the case of Heavy Engineering
Mazdoor Union (supra) was such a case where the
Government company was carrying on an industry where
private sector undertakings were also operating and,
therefore, it was not an industry which the Government
alone was entitled to carry on to the exclusion of the private
operators. The Court opined that the distinction so made
was of no consequence and did not affect the ratio of the
earlier decision. The Court further proceeded to state that
6
(1964) 4 SCR 99, 188 : AIR 1963 SC 1811 Per Shah, J.
7
(1950) 1 KB 18, 25, 26
8
(1948) 2 All ER 432
9
though Section 2(a)(i) of the ID Act has been amended from
time to time to incorporate certain statutory corporations to
make the Central Government an 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 roped in the said
definitions. Be it noted that the other limb of argument to
challenge the competence of the West Bengal Government
was that the dispute arose at Barrackpore branch which
was under the control of the Bangalore division of the
company. The said submission was not accepted. We are
really not concerned with the second aspect of the case. As
is demonstrable, the three-Judge Bench ruled that in
relation to Hindustan Aeronautics Limited, the State
Government is the appropriate Government.
10. From the aforesaid analysis made by the Court in the
said case, as we notice the Court has been guided by the
principles stated in Heavy Engineering Mazdoor Union
(supra) and the provision contained in Section 2(a)(i) of the
ID Act which though had incorporated certain definitions to
make the Central Government the “appropriate
10
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 brought
within the ambit and sweep of that said definitions.
11. In the instant case, it is perceivable that the Division
Bench has dislodged the finding of the learned single Judge
on the basis of the decision of the Constitution Bench in
SAIL’s case . One of the reasons the matter was placed
before the Constitution Bench was that a two-Judge Bench
in Food Corpn. of India v. Transport & Dock Workers
9
Union had noticed the conflict of opinion between different
Benches including two three-Judge Benches of the Court on
the interpretation of the expression “appropriate
Government” in Section 2(1)(a) of the Contract Labour
(Regulation and Abolition) Act, 1970 (for short, “CLRA Act”)
and in Section 2(a) of the ID Act. The larger Bench had
posed three issues for determination and one of them was –
“what is the true and correct import of the expression
“appropriate Government” as defined in clause (a) of
sub-section (1) of Section 2 of the CLRA Act?” Adverting to
9
(1999) 7 SCC 59
11
the said point, the learned Solicitor General had conceded
that the State Government is the appropriate Government in
respect of the establishment of the Central Government
companies in question. The counter stand was that in view
of the amended definition of the “appropriate Government”
in the CLRA Act with effect from 28.01.1986, the Central
Government would be the “appropriate Government”. It was
contended by the Food Corporation of India that the
“appropriate Government” before and after the notification
issued by the Central Government on 28.01.1986, was the
Central Government.
12. The Constitution Bench referred to sub-section (1) of
Section 2 of CLRA Act, which reads as follows:-
“2. (1) In this Act, unless the context otherwise
requires,-
( a ) ‘appropriate Government’ means—
( i ) in relation to an establishment in respect
of which the appropriate Government under the
Industrial Disputes Act, 1947 (14 of 1947), is the
Central Government, the Central Government;
( ii ) in relation to any other establishment,
the Government of the State in which that other
establishment is situate;”
12
The Court also took note of the unamended definition of
“appropriate Government” contained in Section 2(1)(a). The
said unamended provision reads 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 oilfield, 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;”
13. Referring to the unamended provision, it has been
observed thus:-
“A plain reading of the unamended definition
shows that the Central Government will be the
appropriate Government if the establishment in
question answers the description given in
sub-clauses ( i ) to ( iii ). And in relation to any other
establishment, the Government of the State, in
which the establishment in question is situated,
will be the appropriate Government. So far as
sub-clauses ( ii ) and ( iii ) are concerned, they
present no difficulty. The discussion has centred
round sub-clause ( i ). It may be seen that
sub-clause ( i ) has two limbs. The first limb takes
in an establishment pertaining to any industry
carried on by or under the authority of the Central
13
Government and the second limb embraces such
controlled industries as may be specified in that
behalf by the Central Government.”
14. After so stating, the Court referred to the authorities
in Ramana Dayaram Shetty v. International Airport
10
of India & others and Managing Director, U.P.
11
Warehousing Corpn. v. Vijay Narayan Vajpayee and
many others and opined thus:-
“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 law —
constitutional or administrative law — as 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.
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. Take
10
(1979) 3 SCC 489
11
(1980) 3 SCC 459
14
the case of a State Government
corporation/company/undertaking set up and
owned by the State Government which is an
instrumentality or agency of the State
Government and is engaged in carrying on an
industry, can it be assumed that the industry is
carried on under the authority of the Central
Government, and in relation to any industrial
dispute concerning the industry, can it be said
that the appropriate Government is the Central
Government? We think the answer must be in
the negative. …”
And again:-
“There cannot be any dispute that all the Central
Government companies with which we are
dealing here are not and cannot be equated to the
Central Government though they may be “State”
within the meaning of Article 12 of the
Constitution. We have held above that being the
instrumentality or agency of the Central
Government would not by itself amount to having
the authority of the Central Government to carry
on that particular industry. Therefore, it will be
incorrect to say that in relation to any
establishment of a Central Government
company/undertaking, the appropriate
Government will be the Central Government. 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
15
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.”
[Emphasis supplied]
15. After so stating, the Court adverted to the amended
definition of “appropriate Government” which bears the
same meaning as given in clause (a) of Section 2 of the ID
Act. After referring to the decision in the amended
provision, it was noted that it is evident that the phrase
“any industry carried on by or under the authority of the
Central Government” is a common factor in both the
unamended as well as the amended definition. While
adverting to the various aspects, the larger Bench referred
to the decision in Heavy Engineering Mazdoor Union
(supra) and in that context, after appreciating the reasons
in the said decision, it has observed thus:-
“… A two-Judge Bench of this Court elaborately
dealt with the question of appropriate
Government and concluded that the mere fact
16
that the entire share capital was contributed by
the Central Government and the fact that all its
shares were held by the President of India and
certain officers of the Central Government, would
not make any difference. It was held that in the
absence of a statutory provision, a commercial
corporation acting on its own behalf, even though
it was controlled, wholly or partially, by a
government department would be ordinarily
presumed not to be a servant or agent of the
State. It was, however, clarified 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. It must be mentioned here
that in the light of the judgments of this Court,
referred to above, it is difficult to agree with the
distinction between a governmental activity and
commercial function of government companies
set up and owned by the Government, insofar as
their function in the realm of public law is
concerned. …”
16. After referring to the said decision, the Court adverted
to the decision in HAL 1 and opined thus:-
“… Having regard to the definitions of the terms
“appropriate Government” and “establishment”
in Section 2 of the CLRA Act, it cannot be said
that the factors which weighed with the Court
were irrelevant. It was also pointed out therein
that from time to time certain statutory
corporations were included in the definition but
no public company of which the shares were
exclusively owned by the Government, was roped
in the definition. What we have expressed above
about Heavy Engg. Case (supra) will equally
apply here.”
17
17. Be it noted, the Court referred to the authorities in
12
Rashtriya Mill Mazdoor Sangh v. Model Mills and Food
Corpn. of India Workers’ Union v. Food Corpn. of India
13
& others and proceeded to state what has been stated in
Air India Statutory Corpn. & others v. United Labour
14
Union and others , that is, from the inception of the CLRA
Act, the “appropriate Government” was the Central
Government and thereafter, opined that:-
“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 case
(supra). Point ( i ) is answered accordingly.”
12
1984 Supp. SCC 443
13
(1985) 2 SCC 294
14
(1997) 9 SCC 377
18
18. While summing up the conclusions in respect of the
aforesaid facet, it has been ruled as follows:-
“(1)( a ) Before 28-1-1986, the determination of the
question whether the Central Government or the
State Government is the appropriate Government
in relation to an establishment, will depend, in
view of the definition of the expression
“appropriate Government” as stood in the CLRA
Act, on the answer to a further question, is the
industry under consideration carried on by or
under the authority of the Central Government or
does it pertain to any specified controlled
industry, or the establishment of any railway,
cantonment board, major port, mine or oilfield or
the establishment of banking or insurance
company? If the answer is in the affirmative, the
Central Government will be the appropriate
Government; otherwise in relation to any other
establishment the Government of the State in
which the establishment was situated, would be
the appropriate Government;
( b ) After the said date in view of the new
definition of that expression, the answer to the
question referred to above, has to be found in
clause ( a ) of Section 2 of the Industrial Disputes
Act; if ( i ) the Central Government
company/undertaking concerned or any
undertaking concerned is included therein eo
nomine, or ( ii ) any industry is carried on ( a ) by or
under the authority of the Central Government,
or ( b ) by a railway company; or ( c ) by a specified
controlled industry, then the Central Government
will be the appropriate Government; otherwise in
relation to any other establishment, the
Government of the State in which that other
establishment is situated, will be the appropriate
Government.”
19
19. Relying on the aforesaid deliberations, it is submitted
by Mr. Gonsalves, learned senior counsel for the appellant
that as far as the respondent company is concerned,
factually it is not carried on by the Central Government nor
it is authorized on behalf of the Central Government to run
the industry and the said reasoning, has neither been
over-turned nor altered by the Constitution bench. On the
contrary, it is urged by Mr. Gonsalves that the view
expressed in HAL 1 (supra) has been affirmed by the
Constitution Bench. It is propounded by him that the
amended provision does not change the nature and
character of Hindustan Aeronautics Limited as the
definition does not take within its ambit and sweep such a
corporation.
20. Learned counsel for the respondent has drawn
inspiration from the authority in HAL 2 (supra). In the said
case it has been held thus:-
“The question that arises for consideration in this
case is, whether the High Court was justified in
holding that the State Government is the
“appropriate Government” under the provisions of
the relevant Act. The Constitution Bench recently
has considered the relevant provisions of the
20
Contract Labour Regulation Act in SAIL v.
National Union Waterfront Workers (supra) and
has come to the conclusion that the “appropriate
government” will be the government which
exercises control and authority over the
organisation concerned. It is undisputed that
Hindustan Aeronautics Ltd. is an undertaking of
the Central Government and it is the Central
Government which exercises full control over the
same. Issuance of licence by the State
Government is no criteria to come to a conclusion
that the State Government would be the
“appropriate government”. The impugned
judgment of the High Court therefore is, on the
face of it, erroneous in view of the Constitution
Bench decision of this Court referred to earlier.
We, therefore, set aside the impugned judgment
of the High Court and hold that the Central
Government is the “appropriate government”.”
21. As we find, the aforesaid decision arrives at the
conclusion that Hindustan Aeronautics Limited is an
undertaking of the Central Government and it is the Central
Government which exercises full control over the same and,
therefore, the Central Government would be the
“appropriate government”. The stand of the respondent
company is that it carries on sovereign functions under the
permission of the Central Government and certain crucial
aspects were not considered in HAL 1 (supra) and the
analysis made in HAL 2 (supra) is the correct and legally
justified. Relying heavily on the decision in SAIL’s case , it
21
is put forth that the respondent company carries its
operation under the authority of the Central Government
due to specific conferment of power and permission granted
by the Central Government to it and, therefore, it is to be
deemed that the permission had been granted by the
Central Government to the respondent company.
Elucidating further that the respondent company is under
the control of the Central Government, reference has been
made to Section 2 of the Industries (Development and
Regulation) Act, 1951 which declares that regard being had
to expediency of control by the Union, it is expedient in the
public interest that the Union should take under its control
the industries specified in the First Schedule. Learned
senior counsel for the respondent has drawn our attention
to Entry 7(1) of the First Schedule which deals with ‘Aircraft’
and Entry 37 which deals with ‘Defence Industries – Arms
and Ammunition’ and, on that basis submits that the
respondent company being the exclusive manufacturer it
has to be treated as one under the control of the Central
Government. Learned senior counsel for the respondent had
urged that in HAL 1 (supra), the Court did not consider the
22
fact that the respondent company carried on by virtue of,
and pursuant to, conferment of, grant of, or delegation of
power or permission by the Central Government, and,
therefore, the said decision does not state the correct
proposition of law. It is argued that the Division Bench of
the High Court has correctly applied the test stipulated in
SAIL (supra) and hence, it is absolutely impeccable.
Highlighting the said facet, it is contended that decision in
HAL 1 (supra) is per incuriam .
22. Our attention has also been drawn to Tata Memorial
Hospital Workers Union v. Tata Memorial Centre and
15
another by the learned counsel for the appellant. In the
said case, it has been held that for the first
respondent-establishment therein the Central Government
was the appropriate Government for the purposes
application of Section 2(3) of the 1971 Act. After adverting to
the necessary and relevant provisions of 1971 Act, the
three-Judge Bench referred to Section 2(1) of ID Act and
observed that from the definition it is clear that under the
ID Act the Central Government is the “appropriate
15
(2010) 8 SCC 480
23
Government” in relation to the industrial disputes
concerning the industries specified under Section 2(a)(i) and
for the industries carried on by or under the authority of the
Central Government. Excluding these two categories of
industries in relation to any other industrial dispute, it is
the State Government which is the “appropriate
Government”. The Court adverted to the phrase “any
industry carried on by or under the authority” of the Central
Government. The Court posed the question – whether the
Division Bench of the High Court has correctly applied the
law laid down in SAIL’s case . The Court noticed that
judgment in SAIL’s case has reiterated the law laid down
in Heavy Engineering Mazdoor Union (supra) though with
a little divergence and thought it appropriate to examine as
to how the concept of “appropriate Government” has been
explained by the Courts in the later leading decisions. The
Court analysed the principles stated in Heavy Engineering
Mazdoor Union (supra) at length and HAL 1 (supra). It also
referred to the authority in Rashtriya Mill Mazdoor Sangh
(supra) and various authorities, including the one in Air
India Statutory Corpn. (supra). The Court thereafter
24
referred to paragraphs 37 to 41, 43, 45 and 46 of SAIL’s
case and noted the submissions of the learned counsel for
the parties and came to hold thus:-
“57. Having seen the statutory framework it is
clear that when it comes to an industry governed
under the Industrial Disputes Act, 1947, to be
covered under the MRTU Act, the State
Government has to be the “appropriate
Government” in relation to any industrial dispute
concerning such industry. As provided in Section
2(3) of the MRTU Act, we have to fall back on the
definitions of “industry” and “appropriate
Government” under the Industrial Disputes Act,
1947. As per the scheme of Section 2( a ) of the
Industrial Disputes Act, for the industrial
disputes concerning the industries specified in
sub-section ( i ), and for the industries which are
carried on by or under the authority of the
Central Government, the Central Government is
the appropriate Government. Section 2( a )( ii )
provides that “in relation to any other industrial
dispute” the State Government is the
“appropriate Government”. Therefore in an
industrial disputes concerning industries, other
than specified industries it becomes necessary to
examine whether the industry is carried on by or
under the authority of the Central Government.
When it does not fall under either of the two
categories, the State Government will be the
appropriate Government.
x x x x x
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
25
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 SAIL (supra), the approach of the
different Benches in the four earlier judgments
has been specifically approved and the view
expressed in Air India (supra) has been disagreed
with. The phrase “under the authority” has been
interpreted in Heavy Engg . (supra) 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 case (supra). 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 Union
(supra) 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 case
(supra) 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 . (supra) 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
26
wages and salaries are determined by it, was also
held to be not relevant.”
23. At this stage, we may note with profit that the
three-Judge Bench has stated that the Constitution Bench
in SAIL (supra) has agreed with the view expressed in
Heavy Engineering Mazdoor Union (supra) with little
divergence. The same has been explained in the following
manner:-
“45. In para 41 of the judgment in SAIL case
(supra), the Constitution Bench examined the
judgment in Heavy Engg. Mazdoor Union case
(supra). In Heavy Engg. Mazdoor Union (supra)
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. (supra) The
Constitution Bench noted that the judgment in
Heavy Engg. Mazdoor Union case (supra) was
followed in Hindustan Aeronautics 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
27
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.”
24. It is also necessary to note here that the three-Judge
Bench referred to HAL 1 (supra) and ruled thus:-
“In Hindustan Aeronautics (supra) 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 case
(supra) 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.”
25. Thus, as is evident, in Tata Memorial Hospital
Workers Union (supra) the Court had analysed the
propositions in SAIL (supra) and opined that the same have
to be seen in the background of the facts and 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. It is further ruled that industry or
28
undertaking has to be carried under the authority of the
Central Government or the State Government and that
authority may be conferred either by a statute or by virtue
of a relationship of principal and agent, or delegation of
power. It has also been observed therein that when it
comes conferring power by statute, there is not much
difficulty, however, where it is not so, whether the
undertaking is functioning under authority or not is a
question of fact.
26. In the case at hand, the issue which arises for
consideration is whether the decision in HAL 2 (supra) can
be regarded as a binding precedent. As is noticeable, HAL
2 (supra) has not taken note of earlier decision in HAL 1
(supra). It has been clearly held in HAL 1 (supra) that
regard being had to the dictionary clause of the ID Act for
the purpose of Hindustan Aeronautics Limited, it is the
State Government which has to make the reference. In
HAL 2 (supra) the Court has referred to decision in
SAIL’s case and opined that it is undisputed that
Hindustan Aeronautics Limited is an undertaking of the
Central Government and it is the Central Government which
29
exercises full control over the same and, therefore, the
appropriate Government is the Central Government. This
analysis runs counter to HAL 1 (supra) and as well the ratio
of the decision in SAIL’s case . On the contrary there is no
discussion either on the facts or the law. It has been opined
that the facts are “undisputed”. In HAL 1 (supra), the
three-Judge Bench had referred to the decision in Heavy
Engineering Mazdoor Union (supra). As has been held in
Tata Memorial Hospital Workers Union (supra), the
authority in Heavy Engineering Mazdoor Union (supra)
has been approved in SAIL (supra) with some divergence.
The authority in SAIL’s case , as the conclusion would
show, covers two situations – the unamended provision and
the amended provision. It does not disturb the principles
stated in HAL 1 (supra). Thus, two aspects, first, the HAL
2 (supra) does not take note of HAL 1 (supra) and second, it
proceeds on the basis of undisputed facts which are not
stated. It is to be noted that there is nothing in the order in
HAL 2 (supra) to suggest that Hindustan Aeronautics
Limited is an agent of the Central Government. In our
considered opinion, as HAL 2 (supra) has not noticed
30
HAL 1 (supra) which has been approved in SAIL’s case , it
cannot be considered as a binding precedent. Therefore, we
hold that HAL 1 (supra) still holds good and lays down the
correct law and we are bound by it as its foundation flows
from Heavy Engineering Mazdoor Union (supra) which
has been approved in SAIL (supra) with some divergence as
has been stated in Tata Memorial Hospital Workers
Union (supra). Be it stated, that divergence really does not
affect the approval. We have no hesitation in our mind that
HAL 2 (supra) cannot be regarded as a binding precedent.
Ergo, it is clear that the Division Bench of the High Court
has not applied the ratio in SAIL’s case correctly and,
therefore, the entire anlaysis has to be held to be fallacious.
27. The controversy does not end there. It is perceptible
that the High Court has not adverted to the merits of the
case and dismissed L.P.A. No. 144 of 2002 on the ground
that it did not survive after dismissal of L.P.A. No. 84 of
2006. As we have set aside the order passed in L.P.A. No.
84 of 2006 and opined that the “appropriate Government” in
relation to the respondent company is the State
31
Government, the matter has to be remitted to the High
Court for fresh adjudication on merits.
28. Consequently, the appeals are allowed and the
impugned order is set aside and L.P.A. No. 144 of 2002 is
remitted to the High Court to be adjudicated on merits. We
request the High Court to dispose of the matter within six
months hence. There shall be no order as to costs.
.................................J.
[Dipak Misra]
................................J.
[Prafulla C. Pant]
New Delhi;
February 26, 2016
ITEM NO.1 COURT NO.4 SECTION XV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 9332-9333/2010
NASHIK WORKERS UNION Appellant(s)
VERSUS
HINDUSTAN AERONAUTICS LIMITED Respondent(s)
Date : 26/02/2016 These appeals were called on for judgment today
For Appellant(s) Mr. Colin Gonslves, Sr. Adv.
Mr. Kamlesh Kumar Mishra, Adv.
Ms. Jyoti Mendiratta, AOR
For Respondent(s) Mr. S. Guru Krishna Kumar, Sr. Adv.
Mr. Dhananjay Baijal, Adv.
Mr. N. Sai, Vinod, Adv.
Mr. Nikhil Nayyar, AOR
Hon'ble Mr. Justice Dipak Misra pronounced the judgment of the
Bench consisting His Lordship and Hon'ble Mr. Jutice Prafulla C.
Pant.
The appeals are allowed and the impugned order is set aside
and L.P.A. No.144 of 2002 is remitted to the High Court to be
adjudicated on merits in terms of the signed reportable judgment.
There shall be no order as to costs.
(Gulshan Kumar Arora) (H.S. Parasher)
Court Master Court Master
(Signed reportable judgment is placed on the file)