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TMI Blog1967 (5) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... er on the merits. This was done, and we have heard the matter on the merits. The facts which have emerged are as follows : In the application, there were three petitioners, who are now the appellants before us. The respondent is the Mining and Allied Machinery Corporation Limited, Durgapur. In 1962, the Heavy Engineering Corporation Limited, a Government company, in its coal mining machinery project started recruiting candidates with a view to meet the initial requirements of trained and experienced workers/operators in the plant when it went into production. Accordingly, 122 candidates were recruited. The way that the recruitment was done was as follows : An offer was made by the administrative officer on behalf of the coal mining machinery project of the Heavy Engineering Corporation Limited of the nature set out in annexure ''A" to the petition, copy whereof is set out at pages 9 to 12 of the paper book. Candidates who accepted the offer, executed bonds of the nature as set out in annexure "B" to the petition, copy whereof is set out at pages 21 to 22 of the paper book. The workers recruited were given different scales of pay depending on their qualification, experience and perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty namely, to refund to the Corporation on demand the moneys paid to him or expended on his training, travelling expenses etc. upto an amount not exceeding Rs. 10,000 with interest. On or about the 19th January, 1956, a promotion list had been drawn up, in which 32 of the workmen were shown as being entitled to promotion to different posts, on higher scales. This was based on proper consideration of merit, qualification and performance of the worker concerned. In January, 1966, demand for justice was served and on 16th February, 1966, an application was made under article 226 of the Constitution. The nature of the petition was as follows : It was stated that the absorption list made prior to 1965 by the coal mining machinery project of the Heavy Engineering Corporation Limited was made arbitrarily, as well as the promotion list dated 19th January, 1966, by the respondent. It is stated that these were done in violation of the rules of natural justice and were discriminatory and violative of article 16 of the Constitution and the prayer is that the said absorption list and the promotion list should be quashed by a writ of certiorari and a writ of mandamus should be issued directing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been effected and any order made in the writ jurisdiction would violently upset the entire administration of the company concerned. Hence such applications should not be entertained in the writ jurisdiction. On facts, we are of the opinion that there arises no question of discrimination, either under article 14 (which has not been distinctly mentioned) or under article 16 of the Constitution. The workers were recruited for being given training and they were absorbed in different posts bearing different scales of pay according to their efficiency and attainments. Nothing has been shown why it should be otherwise, and how there has either been a violation of the rules of natural justice or discrimination violative of articles 14, 15 or 16 of the Constitution. This again would be quite sufficient to dispose of this application but since a point has been raised and argued before us I will proceed to consider, whether in the circumstances of the case, an application under article 226 should at all be entertained. In Sohanlal v. Union of India AIR 1957 SC 529, 532 Imam, J. said as follows : "Normally, a writ of mandamus does not issue to or an order in the nature of mandamus is not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Bombay High Court in Corporation of the City of Nagpur v. Nagpur Electric Light and Power Company Ltd. AIR 1958 Bom. 498". In the present case, the respondent is a "Government company" as defined in section 617 of the Indian Companies Act. "A Government company" means any company in which not less than 50% of paid-up share capital is held by the Central Government or any State Government or partly by the Central Government and partly by one or more State Governments and includes a company which is subsidiary of a Government company as thus denned. When a company which is a "Government company", is formed, a number of restrictions is imposed upon it by law. For example, it cannot employ a managing agent (section 618). The auditor is appointed by the Central Government on the advice of the Comptroller and Auditor-General of India (section 619). The Central Government has a duty to make an annual report which should be placed before both the Houses of Parliament, together with a copy of the audit report and the comments made by the Comptroller and Auditor-General of India (section 619). As stated above, the respondent-company is a "Government company" of which the sharehold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He considered a large number of cases, and divided them into separate groups. The first case to be noticed was a decision of the Patna High Court in Subodh Ranjan Ghosh v. Sindri Fertilisers and Chemicals Ltd. AIR 1957 Pat. 10. In that case, the petitioner was employed by the respondent-company which was a private limited company, completely owned by the Government of India and the management of which was entrusted to a board of directors nominated by the President of India. Ramaswami C.J. (as he then was) held that in the eye of law, the company was a separate legal entity and had separate legal existence and was different person altogether from the subscribers to the memorandum, namely, the President or the Secretary to the Government of India. The learned Chief Justice discussed the question of ownership, control and management of the company and held that though they were completely vested in the President of India, yet the court was not entitled to pierce the veil of corporate entity and to examine the reality beneath. The learned Chief Justice followed the well known English case, Tamlin v. Hannaford [1950] 1 KB 18, where it was held that an employee of the British Transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive authority over the company. Even then it was held that these features would not make any difference to the jural character of the company and that it still remained a limited liability company. No writ of certiorari was allowed to run against such a company in that case. On an analysis and review of these different types of State enterprises I do not think it is possible to come to any uniform general formula to hold that in no cases where there is a statutory corporation governed by a statute or in no case of Government companies can there be a civil post or a post under the State within the meaning of article 311 of the Constitution." The learned judge, however, did not come to a final decision with regard to "Government companies". He proceeded to say as follows : "In this case I would not rest my decision on the point that the petitioners were not Government servants or holding civil posts under the State. In an appropriate case in future it may be necessary to re-examine and thoroughly consider how far the doctrine of incorporation making the company a legal entity, creates a veil that cannot be pierced and extends to prevent service under such a company from being a se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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