1969 (4) TMI 75 - HC - Companies Law

Summary

Issues Involved:
1. Whether the Bokaro Steel Ltd. is considered "State" under Article 12 of the Constitution of India.
2. Whether the petitioners hold any office under the State and are entitled to the fundamental right of equality of opportunity in matters of appointment under Article 16 of the Constitution.
3. Whether a writ can be issued for the enforcement of a contractual right.
4. Whether the seniority lists were prepared rationally according to rules and if they infringe any rights of the petitioners.

Issue-wise Detailed Analysis:

1. Whether the Bokaro Steel Ltd. is considered "State" under Article 12 of the Constitution of India:
The primary issue was whether Bokaro Steel Ltd. is "State" within the meaning of Article 12. The petitioners argued that Bokaro Steel Ltd., being wholly owned by the Government of India and administered under the Ministry of Iron and Steel, should be considered "State." They cited the Supreme Court's interpretation in Rajasthan State Electricity Board, Jaipur v. Mohan Lal, where "other authorities" under Article 12 were interpreted to include constitutional or statutory authorities with quasi-governmental powers. However, the court noted that Bokaro Steel Ltd. is a company incorporated under the Indian Companies Act and does not have statutory powers conferred by law, distinguishing it from the Rajasthan Electricity Board case. The court referenced the Calcutta High Court decision in Sunil Kumar Debnath v. Mining and Allied Machinery Corpn. Ltd., which held that a joint-stock company is not amenable to writ jurisdiction unless it is a public utility company. The court also cited Subodh Ranjan Ghosh v. Sindri Fertilisers and Chemicals Ltd., which held that a company, even if wholly owned by the government, retains its separate legal entity and is not a department of the State. The court concluded that it could not pierce the corporate veil to declare Bokaro Steel Ltd. as "State" under Article 12.

2. Whether the petitioners hold any office under the State and are entitled to the fundamental right of equality of opportunity in matters of appointment under Article 16 of the Constitution:
The petitioners claimed that their transfer from Hindustan Steel Ltd. to Bokaro Steel Ltd. should not affect their seniority and that the seniority lists violated Article 16, which guarantees equality of opportunity in public employment. The respondents argued that Bokaro Steel Ltd. is not "State" and thus Article 16 does not apply. The court agreed with the respondents, holding that since Bokaro Steel Ltd. is not "State" under Article 12, the petitioners do not hold any office under the State. Consequently, the protections under Article 16 do not apply.

3. Whether a writ can be issued for the enforcement of a contractual right:
The court did not delve deeply into this issue, as it was rendered moot by the determination that Article 16 does not apply. The respondents had contended that the petitioners' rights were based on contract rather than statute, and thus no writ could be issued for enforcement of such rights. The court noted this contention but refrained from expressing an opinion, as it was unnecessary given the primary finding.

4. Whether the seniority lists were prepared rationally according to rules and if they infringe any rights of the petitioners:
The petitioners argued that the seniority lists were arbitrary and violated their rights. The respondents maintained that the lists were prepared rationally according to non-statutory rules framed by the directors of Bokaro Steel Ltd. The court did not address this issue in detail, as it was secondary to the primary determination regarding the applicability of Article 16. The court noted that expressing an opinion on this matter could prejudice ongoing litigation involving some of the direct recruits to Bokaro Steel Ltd.

Conclusion:
The court dismissed the petitions, holding that Bokaro Steel Ltd. is not "State" under Article 12 of the Constitution, and thus the petitioners are not entitled to protections under Article 16. Consequently, no writ could be issued in their favor. The court did not express opinions on the enforceability of contractual rights or the rationality of the seniority lists, as these issues were secondary and potentially prejudicial to ongoing litigation.