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1969 (1) TMI 68 - SC - Companies LawWhether a person holds an office of profit under a Government is the amount of control which the Government exercises over that officer? Held that - The power to appoint and dismiss respondent No. 1 does not vest in the Government or in any government servant. The power to control and give directions as to the manner in which the duties of the office are to be performed by respondent No. 1 also does not vest in the Government, but in an officer of the Company. Even the power to determine the question of remuneration payable to respondent No. 1 is not vested in the Government which can only lay down rules relating to the conditions of service of the employees of the Company. Thus unable to agree that, in these circumstances, the indirect control exercisable by the Government because of its power to appoint, the Directors and to give general directions to the Company can be held to make the post of Superintendent, Safety Engineering Department, an office of profit under the Government. he principles which will apply to the Company will be on a par with those applicable to other Government Companies or Companies in which the Government holds more than 25 per cent of the share capital. The Company cannot, therefore, be treated as either being equivalent to the Government or to be an agent of the Government, so that the control exercised by its Directors or the Managing Director over respondent No. 1 cannot be held to be control exercised by the Government. Therefore, respondent No. 1 cannot be held to be holding an office of profit under the Government of Mysore and was Pot disqualified from being chosen as a member of the Assembly of the State. Appeal dismissed.
Issues Involved:
1. Disqualification under Article 191(1)(a) of the Constitution. 2. Holding an office of profit under the Government. Issue-Wise Detailed Analysis: Disqualification under Article 191(1)(a) of the Constitution The appellant, an unsuccessful candidate for the Mysore Legislative Assembly election, challenged the election of the successful candidate (respondent No. 1) on the grounds of disqualification under Article 191(1)(a) of the Constitution. The appellant argued that respondent No. 1 was disqualified because he was holding an office of profit under the Government of Mysore on the date of scrutiny. The facts established that respondent No. 1 was employed as Superintendent, Safety Engineering Department in the Mysore Iron & Steel Works Ltd., Bhadravati, a company whose shares were wholly owned by the Mysore Government. The appellant contended that respondent No. 1 continued to be a government servant even after the company took over the concern from the Government in 1962. However, the Court held that the transfer of the undertaking to the company resulted in the employees, including respondent No. 1, becoming employees of the company and ceasing to be government servants. This was supported by the application of section 25FF of the Industrial Disputes Act, which indicated that respondent No. 1, a workman at the time of the transfer, became an employee of the new employer, the company. The Court further clarified that the employees of the company were governed by the company's Standing Orders and Works Service Rules, not by the Mysore Civil Service Regulations. The inclusion of respondent No. 1's name in the Mysore Civil List did not prove his continued government service. Additionally, there was no evidence that respondent No. 1 held a lien on any government post after the transfer. Hence, the first contention of the appellant failed. Holding an Office of Profit under the Government The appellant's second contention was that respondent No. 1, even if not a government servant, held an office of profit under the Government of Mysore. The appellant relied on the principles laid down in previous judgments, particularly emphasizing the control exercised by the Government over the company. The Court examined the factors determining an office of profit under the Government, such as the power to appoint, dismiss, control, and determine remuneration. It was found that these powers vested in the company's Managing Director and not directly in the Government. The Court distinguished this case from Gurugobinda Basu v. Sankari Prasad Ghosal, where the appellant was directly controlled by the Comptroller and Auditor-General, a government servant. The Court also compared Articles 58(2) and 66(4) with Articles 102(1)(a) and 191(1)(a) of the Constitution, noting that disqualification for legislative membership does not extend to holding an office of profit under a local or other authority subject to government control. The Court emphasized that the company, despite being government-owned, was a separate legal entity, and its employees were not under direct government control. The Court further noted that Section 10 of the Representation of the Peoples' Act specifically disqualifies persons holding certain offices in companies where the government holds at least 25% share, but this did not apply to respondent No. 1's position. Therefore, respondent No. 1 was not holding an office of profit under the Government of Mysore and was not disqualified from being chosen as a member of the Assembly. Conclusion The appeal was dismissed, and the judgment of the High Court of Mysore, which had dismissed the election petition, was upheld. The appellant's contentions regarding disqualification under Article 191(1)(a) and holding an office of profit under the Government were rejected. Respondent No. 1 was found not to be disqualified from being elected to the Mysore Legislative Assembly.
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