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TMI Blog1988 (4) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... is a Nationalised Bank. He was dismissed from service in pursuance of disciplinary action for certain charges framed against him. Aggrieved, he preferred an appeal under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (hereinafter referred to as the Tamil Nadu Shops Act). A preliminary objection was raised on behalf of the Bank of India to the effect that the Tamil Nadu Shops Act was not applicable to the Bank in view of the provisions contained in Section 4(1)(c) thereof which exempted inter alia an establishment under the Central Government from the purview of that Act. The Appellate Authority, however, took the view that it was a case where the preliminary objection may be decided along with the appeal. The Bank of India thereupon filed two writ petitions in the High Court being Writ Petition Nos. 2013 and 2014 of 1979. The prayer contained in Writ Petition No. 2013 of 1979 was for the issue of a writ of mandamus directing the Appellate Authority to dispose of the preliminary objection before taking up the appeal for hearing on merits. In Writ Petition No. 2014 of 1979 on the other hand a prayer was made for the issue of a writ of prohibition directing the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by Respondent No. 3 before the Labour Officer under the Andhra Pradesh Shops and Establishment Act, 1966 (hereinafter referred to as the Andhra Pradesh Shops Act). The Labour officer allowed the said appeal which was confirmed in a second appeal by the Labour Court. Aggrieved by these orders the appellant-Bank filed writ petition No. 5973 or 1973 for quashing of these orders. One of the pleas raised in the writ petition by the appellant was that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf and consequently the orders passed in the appeals by the Labour officer and the Labour Court were without jurisdiction. This plea, however, did not find favour with the learned Single Judge who decided the writ petition and the writ petition was consequently dismissed. The Writ Appeal No. 268 of 1975 preferred by the appellant- Bank against that judgment was dismissed by a Division Bench of the High Court by the judgment which is the subject matter of this civil appeal. Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n question which arises for consideration in all these appeals is as to whether the Nationalised Banks and the State Bank of India are establishments under the Central Government within the meaning of the Acts referred to above and consequently the provisions of the said Acts are not applicable to these Banks in view of the exemption contained in this behalf therein. In view of the definition of the term establishment read with that of commercial establishment contained in the Acts referred to above it has not been disputed even by the learned counsel for the various banks that a bank is an establishment. Consequently unless exempted the provisions of the said Acts shall apply to the State Bank of India and the nationalised banks also. Tamil Nadu Shops Act which is of the year 1947 and which really seems to be the precursor and foundation of the Kerala Shops Act and the Andhra Pradesh Shops Act which are of the years 1960 and 1966 respectively contains exemptions in Section 4. Sub-section (1) of Section 4 starts with the words Nothing contained in this Act shall apply to- . Thereafter it contains clauses (a) to (f) which describe the persons and establishments who are ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or persons having or exercising, recognising authority or command. with abstract or other subs. denoting authority or control, with or without specification of the person or persons exercising it. (The Compact Edition of the oxford English Dictionary) Under has the same significance as 'by virtue of' by or through the authority of (In Venkataramiya's Law Lixicon) The word under may be used in statute in its literal sense as indicating condition of inferiority or subservience or as meaning subject to or in conformity with, denoting curtailment or restriction of, but nevertheless agreement or congruity with, something else to which it is made applicable. Alsop v. pierce, 19 SO 2d 799, 802, 155 Fla. 184 (Words and Phrases Permanent Edition) We may now advert to the composition and constitution of the State Bank of India and the nationalised banks. The preamble of the State Bank of India Act, 1955 (hereinafter referred to as Act No. 23 of 1955) reads as under: Whereas for the extension of banking facilities on a large scale, more particularly in the rural and semi-urban areas, and for diverse other public purposes it is expedient to constitute a State Bank f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section as have been confirmed by the Central Government shall have effect or be payable or claimable. Likewise, the continued grant of the pension, allowance or other benefit, as the case may be, has been made subject to the direction of the Central Government in this behalf. Section 8 contemplates that for the persons who immediately before the appointed day were the trustees of the funds mentioned therein, there shall be substituted as trustees such persons as the Central Government may by general or special order specify. Sub-section (1) of Section 16 contemplates that the Central office of the State Bank shall be at Bombay. The Central Government, however, has been conferred with the power to provide otherwise by Notification in the official Gazette. Sub-section (5) of Section 16 provides that notwithstanding anything contained in sub-section (4) the State Bank shall establish not less than four hundred branches in addition to the branches referred to in sub- section (3) within five years of the appointed day, or such extended period as the Central Government may specify in this behalf and the places where such additional branches are to be established shall be determined i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cidental thereto. Clauses (d) and (f) of Section 2 of this Act define corresponding new banks and existing banks . First Schedule to the Act in column 1 enumerates the names of the existing banks whereas in column 2 the names of the corresponding new banks. Sections 3 and 4 indicate that the corresponding new banks which are constituted on the commencement of this Act have taken over the undertakings of the concerned existing banks. Section 6 contemplates that every existing bank shall be given by the Central Government such compensation in respect of transfer under Section 4 to the corresponding new banks of the undertakings of the existing banks as is specified against each such bank in the Second Schedule. Section 7 provides that the Head officer of each corresponding new bank shall be at such place as the Central Government may by Notification in the official Gazette specify in this behalf. The general superintendence, direction and management of the affairs and business of a corresponding new bank are to vest in a Board of Directors and it is the Central Journeymen which in consultation with the Reserve Bank has been given the power under sub-section (3) to constitute th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal, consequential and supplemental matters as may be necessary to carry out the provisions of this Act. Sub-section (4) entitles the Central Government in consultation with the Reserve Bank to make a scheme to amend or vary any scheme made under sub- section (1). Sub-section (5) inter alia contemplates that the scheme so prepared by the Central Government shall be binding on the corresponding new banks or corporation or banking institutions and also on all other persons mentioned therein. Section 10 deals with closure of accounts and disposal of profits. Sub-section (2) thereof contemplates that the remuneration payable to every auditor of a corresponding new bank shall be such as the Reserve Bank may fix in consultation with the Central Government. Under subsection (4) every auditor of a corresponding new bank has to make a report to the Central Government upon the annual balance sheet and accounts and such report shall contain what is provided for in clauses (a) to (e). Sub-section (7) contemplates that after making provision for monies specified therein a corresponding new bank shall transfer the balance of profits to the Central Government. Sub- section (7A) makes it obligato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being owned by the Central Government. We find it difficult to agree with this submission. We shall shortly deal with the legal position with regard to an autonomous corporation having distinct juristic entity with a corporate structure. Suffice it to say at this place that to uphold the submission of learned counsel for the employees the word under will have to be substituted by the word of in the relevant subsection. It is obvious that the word under 'cannot be taken to have the same meaning as word of which may bring in the notion of ownership. Had that been the intention of the Legislature we find no cogent reason as to why the word of was not used in place of the word under in the relevant sub-section. Indeed the concept of under can be relevant only when there are two entities one of which may be under the other. A department of the Government strictly speaking is a part of the Government and can only loosely be termed as under the Government. Consequently the mere fact that the State Bank of India and the nationalised banks are different entities as corporate bodies for certain purposes cannot by itself be a circumstance from which it may be deduced tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been increasingly utilised by the Government for setting up and running public enterprises and carrying out other public functions. Today with increasing assumption by the government of commercial ventures and economic projects, the corporation has become an effective legal contrivance in the hands of the Government for carrying out its activities, for it is found that this legal facility of corporate instrument provides considerable flexibility and elasticity and facilitates proper and efficient management with professional skills and on business principles and it is blissfully free from departmental rigidity, slow motion procedure and hierarchy of officers . The government in many of its commercial ventures and public enterprises is resorting to more and more frequently to this resourceful legal contrivance of a corporation because it has many practical advantages and at the same time does not involve the slightest diminution in its ownership and control of the undertaking. In such cases the true owner is the State, the real operator is the State and the effective controllorate is the State and accountability for its actions to the community and to Parliament is of the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the various banks referred to above are carried on under the authority of the Central Government. The question, as seen above, which falls in these cases for consideration is whether in view of the existence of deep and pervasive control of the Central Government over these banks they are establishments under the Central Government for purposes of the Acts aforesaid dealing with Shops and Commercial Establishments. Reliance was also placed by learned counsel on Hindustan Aeronautics Ltd. v. The Workmen and Ors., [1976] 1 S.C.R. 231 where again in the context of the Industrial Disputes Act the same view was taken relying on the earlier decision in the case of Heavy Engineering Mazdoor Union (supra). In this connection it may be noticed that even in the case of Heavy Engineering Mazdoor Union (supra) it was observed that the question whether a corporation is an agent of the State would depend upon the facts of each case. After referring to the decision in Graham v. Public Works Commissioner, [1901] 2 KB 781 it was observed that where a State setting up a corporation so provided such a corporation could be easily identified as the agent of the State. This distinction w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1951. It was pointed out that the consequence of such a notified order being issued is to divert the management from the present managers and to vest it in the authorised Controller. It could not be said that on the issue of such an order the industrial undertaking is engaged in the industry carried on under the authority of the department of the Central Government inasmuch as the expression under the authority of any department of the Central Government in ordinary parlance means that the department is directly responsible for the management of the industrial undertaking. It was further pointed out that the power to regulate the management or control the management is entirely distinguishable from the power to run the industry under the authority of the department of the Central Government. As seen above, no such question arises in the instant cases while determining the point as to whether the banks referred to above are establishments under the Central Government. Union of India and others v. N. Hargopal and others, [1987] 1 L.L.J. Page 545 on which reliance was next placed was a case where the question arose as to whether establishments in public sector were covered by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to hold and acquire property and have almost full freedom in the matter of day to dayadministration (3) Even though in the relevant clause containing exemption the Reserve Bank of India had been mentioned there was no such mention with regard to nationalised banks. As regards the first reason referred to above we have already pointed out that even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein referred to above particularly with regard to deep and pervasive control are relevant for deciding the point in issue. As regards the second reason referred to above suffice it to point out that for holding that the State Bank of India and the nationalised banks are establishments under the Central Government which have a corporate structure and have freedom in the matter of day to day administration it is not necessary that these banks should be owned by the Central Government or be under its absolute control in the sense of a department of the Government. With regard to the last reason namely the circumstance that even though Reserve Bank of India is mentioned specifically in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... radesh Shops Act are set aside. Civil Appeal No. 1042 of 1979 is also allowed and the judgment of the Andhra Pradesh High Court dated 24th January, 1979 in Writ Petition No. 86 of 1979 as also orders passed by the first and second appellate authorities in the apeals preferred by Respondent No. 3 and the bank respectively under the Andhra Pradesh Shops Act are set aside. Civil Appeal No. 837 of 1984 is also allowed and the judgment of Kerala High Court in Writ Petition No. 1419 of 1978 is set aside. The preliminary objection raised on behalf of the bank before the Appellate Authority in the appeal filed by Respondent No. 1 under Section 18 of the Kerala Shops Act to the effect that the said appeal was not maintainable is upheld. With the result that if the said appeal is still pending it shall be disposed of as not maintainable and in case it has been decided the said decision shall be treated as without jurisdiction. The various employees whose appeals preferred under the Kerala Shops Act or the Andhra Pradesh Shops Act preferred to above have been hold to be not maintainable and the orders passed therein have been set aside shall be at liberty to take recourse to such other remedi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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