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TMI Blog1983 (8) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1913, and it had been carrying on business of manufacture and sale of weighing machines, looms, machine tools, etc. The Central Government by an order dated November 25, 1972, under section 18Aof the Industries (Development and Regulation) Act, 1951, had authorised the chairman and the two members nominated by it to take over the management and control of the said undertaking, namely, India Machinery Co. Ltd. for a period of five years subject to the conditions set out in the said order. The Government of India by another notification dated August 24, 1977, had authorised the Industrial Reconstruction Corporation of India Ltd. to take over the management of the said company. The effect of the said notification has been extended from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice and also offered to pay them their other dues subject to adjustment of advances taken by them. On November 26, 1982, the petitioners moved this court under article 226 and obtained the present rule. Mr. Susanta Chatterjee, advocate, who appeared on behalf of the petitioners, has submitted that respondent No. 1 company, whose management and control has been assumed by the Central Government under section 18A of the Industries (Development and Regulation) Act, 1951, is an instrumentality of the State and, as such, is an authority within the meaning of article 12 of the Constitution. Mr. Chatterjee has further submitted that the respondents have acted arbitrarily and unreasonably by terminating the services of the two petitioners by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itutional mandate of article 12 of the Constitution in the matter of termination of the services of the two petitioners. It is now settled law that for determining whether a juridicial person is an authority under article 12 of the Constitution it is immaterial whether the same was created by statute or under statute, vide the case of Ajay Hasia v. Khalid Mujib Sheravardi, AIR 1981 SC 487, paragraphs 11 and 12. Therefore, it is not very pertinent that respondent No. 1 was incorporated as a limited company under the Indian Companies Act, 1913. In order to decide whether respondent No. 1, whose management and control has been assumed under section 18A of the Industries (Development and Regulation) Act, 1951, is an instrumentality, a prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No. 1, as already stated, was incorporated as a limited company and there was no question of any department of the Government being transferred to respondent No.1. Thus, four out of five tests indicated in the aforesaid two cases decided by the Supreme Court arc absent .in the instant case. Therefore, it remains only to consider whether the State control under section 18A of the Industries (Development and Regulation) Act, 1951, is sufficiently "deep and pervasive" to support an inference that respondent. No. 1 is an agency or instrumentality of the Government. On November 25, 1972, in exercise of the powers conferred by subsection (1) of section 18A of the Industries (Development and Regulation) Act, 1951, the Government of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be authorised to take into their custody and control all property, effects and actionable claims of the industrial undertaking whose control or management is taken over under section 18A of the Act. They would also exercise the powers of the directors of the undertaking (vide clauses ( a ) to ( c ) of sub-section (1) of section 18B of the said Act). The person or body of persons who have been authorised under section 18A of the Act to take over management would be required to take necessary steps for efficiently managing the business subject to the provisions of the Act and the control of the Central Government. Subject to the provisions contained in subsection (1) of section 18E and also subject to the exceptions as the Central Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the indicia for constituting such an undertaking an agency or instrumentality of the State is present and merely because its control and management has been temporarily taken over under section 18A of the Act, respondent No. 1 is not an authority within the meaning of article 12 of the Constitution. Therefore, the petitioners cannot apply under article 226 of the Constitution complaining that respondent No. 1 by terminating their services had infringed article 14 of the Constitution. I do not, therefore, decide the further question whether or not termination of the petitioners' services was wrongful and whether or not they are entitled to any relief or reliefs in civil court. Therefore, the order on this writ application would be witho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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