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TMI Blog2010 (8) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... es Act, 1947 (hereinafter referred to as the I.D. Act). The Division Bench has held that the State Government was not the `appropriate government' for this purpose. Consequently the Applications concerned in the present matter filed under the MRTU and PULP Act, namely the Application of the second respondent for cancellation of the status of the applicant as the recognized union under respondent No. 1, and Application for substitution of second respondent in place of the appellant, as the recognized union, were held to be non- maintainable. The appellant is aggrieved by the finding that the State Government is not the appropriate government and that the MRTU and PULP Act has no application to the first respondent establishment. It will result into automatic denial of its status as the recognized union under the MRTU and PULP Act and also into denial of the remedies available to the appellant and to the employees, of the first respondent, (against unfair labour practices, if any) and hence this appeal by special leave. The right of the appellant to represent the employees of the first respondent (numbering over 1300) is thus, at stake. 3. The appellant is a Trade Union, registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the relevant period for consideration of the Application under Section 14 of the MRTU & PULP Act, the valid membership of the appellant union was more than that of the second respondent union. While deciding so, it examined the material on record, considered the rival submissions and held that the `appropriate government' for the first respondent was the State Government. Therefore, although the two Applications were held to be maintainable under the MRTU and PULP Act, the Application No. 16 of 1994 was dismissed on merits. 5. The first respondent filed Writ Petition No. 2148 of 2001 to challenge this judgment and order. The petition came to be dismissed by a Single Judge of the High Court by holding that the first respondent is an autonomous body and though the Central Government was funding the first respondent partially, it had only a partial control thereof. The Single Judge accepted the findings of the Industrial Court on the issue of appropriate government to be just, legal and proper and, therefore, dismissed the Writ Petition, by his order dated 29.10.2001. This was on consideration of the judgment of this Court in Steel Authority of India and Ors. v. National Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia was desirous of establishing an Indian Cancer Research Centre for Post-Graduate Teaching and Research in Cancer and the same was established in collaboration with the trustees of Sir Dorabji Tata Trust by an agreement dated 7.10.1953. The Government of India gave the initial grant for that Centre for setting up of a laboratory on a portion of the land belonging to the trust and also undertook to provide recurring expenditure in respect of salaries of the staff and contingencies of the management of the said Center. 9. The trustees of Sir Dorabji Tata Trust subsequently decided to dedicate the hospital to the Nation with all its assets, including its funds and the plots of land. They requested the Government of India to takeover its control and management with effect from 4.2.1957. Accordingly, an agreement was entered into between the trustees and the Central Government on 4.2.1957 and under Clause (1) thereof, the government agreed to takeover control and management of the hospital and to manage it at its own expenses from 1.4.1957. Under Clause (2) of the agreement, the management of the hospital was to rest in the hands of the Governing Board consisting of seven members of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement was entered into between the Government of India and the trustees of Sir Dorabji Tata Trust on 6.1.1966, and the two institutions viz. Tata Memorial Hospital and Indian Cancer Research Centre were amalgamated into an institution thereafter known as the Tata Memorial Centre i.e. respondent No. 1 herein. The Tata Memorial Centre was registered as a Society under the Societies Registration Act 1860 and also as a Public Trust, under the Bombay Public Trust Act 1950. Under the rules and Regulations of this Society, the administration and management of the Centre vests in a Governing Council under Rule 3 thereof, and this council is the executive body of the Centre. The council is constituted under Rule 4 thereof. Rule 3 and 4 (i) of these Rules and Regulations read as follows: 3. Administration and Management: Subject to these Rules and such rules as may hereafter be made from time to time, the administration and management of the Centre shall vest in the Council, which shall be the executive body of the Centre. 4. Constitution of the Council: (i) The Council shall consist of: (a) Four members appointed by the Government of India; (b) Three members appointed by the Trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned with Sub-section (3) thereof which reads as follows: (1).... (2).... (3) Except as otherwise hereinafter provided, this Act shall apply, to the industries to which the Bombay Industrial Relations Act, 1946, Bom. XI of 1947, for the time being applies, and also to any industry as defined in Clause (j) of Section 2 of the Industrial Disputes Act, 1947, XIV of 1947, and the State Government in relation to any industrial dispute concerning such industry is the appropriate Government under that Act; Provided that the State Government may by notification in the Official Gazette, direct that the provisions of this Act shall cease to apply to any such industry from such date as may be specified in the notification; and from that date, the provisions of this Act shall cease to apply to that industry and, thereupon, Section 7 of the Bombay General Clauses Act, 1904, Bom. 1 of 1904, shall apply to such cessor, as if this Act has been repealed in relation to such industry by a Maharashtra Act. 16. It is not disputed that the first respondent is an `industry' within the concept of industry as defined in Section 2(j) of the Industrial Disputes Act 1947. The respondent No. 1 is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government will be the `appropriate government', but in relation to any other industrial dispute the State Government will be the `appropriate government'. It, therefore, becomes necessary to examine the phrase `any industry carried on by or under the authority' of Central Government on this background while applying it to a particular industry and in the instant case, to the first respondent. 19. Explanation of the concept of appropriate government by the Judiciary: The appeal raises the question as to whether the Division Bench has correctly applied the law laid down in Steel Authority of India (supra). The Steel Authority of India judgment however once again reiterates the law laid down way back in Heavy Engineering Mazdoor Union v. The State of Bihar (1969) 3 SCR 995, though with a little divergence. It therefore becomes necessary to examine as to how the concept of appropriate government has been explained by the judiciary in the leading decisions. That will enable us to find out as to what are the tests in this behalf which have evolved over the years. In Heavy Engineering case, the State of Bihar had referred an industrial dispute between the Heavy Engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans pursuant to the authority, such as where an agent or a servant acts under or pursuant to the authority of his principal or master. Can the respondent-company, therefore, be said to be carrying on its business pursuant to the authority of the Central Government? That obviously cannot be said of a company incorporated under the Companies Act whose constitution, powers and functions are provided for and regulated by its memorandum of association and the articles of association. (underlining supplied) 21. This Court noted that an incorporated company has a separate existence and the law recognizes it as a juristic person, separate and distinct from its members. Its rights and obligations are different from those of its shareholders. Action taken against it does not directly affect its shareholders. The company so incorporated derives its powers and functions from and by virtue of its memorandum of association and its articles of association. The mere fact that the entire share capital of the company was contributed by the Central Government and the fact that all its shares are held by the President and certain officers of the Central Government does not make any difference. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of `employer' as given in Section 2(g) of the Industrial Disputes Act. As this section provides, an employer under Clause (g) means, an employer in relation to an `industry' carried on by or under the authority of any department of the Central Government or the State Government, the Authority prescribed in that behalf, or where no such authority is prescribed, the head of the Department. No such authority was prescribed in regard to the business carried on by the respondent company. The Court observed that the definition of the `employer' under the Industrial Disputes Act on the contrary suggests that an industry carried on by or under the authority of the Government means either the industry carried on directly by a department of the Government such as the posts and telegraphs or railway, or one carried on by such department through the instrumentality of an agent. All these facts led this Court to hold that the Heavy Engineering Corporation could not be said to be an `industry' carried on under the authority of the Central Government. 24. We have referred to the Judgment in Heavy Engineering Mazdoor Union (Supra) extensively for the reason that it has been follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the industrial undertaking and since the undertaking was being run by an authorized controller under the authority of a department of the Central Government, the reference under the Bombay Industrial Relations Act, 1946 was not competent. A bench of three judges of this Court once again referred to the interpretation of the expression `under the authority of' rendered in Heavy Engineering Mazdoor Union's case. The Court noted that in reaching its conclusion in Heavy Engineering Mazdoor Union's case (supra) this Court had approved the view of Calcutta High Court in Carlsbad Mineral Water Mfg. v. P.K. Sarkar AIR 1952 Cal. 6 wherein a Division Bench that Court, had held that business which is carried on by or under the authority of the Central Government must be a Government business. The High Court had further held that in any industry to be carried on under the authority of the Central Government it must be an industry belonging to the Central Government, that is to say, its own undertaking. The Court held in para 17; The fact that the authorized controller is appointed by the Central Government and that he has to work subject to the directions of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution of India, such as those in the case of R.D. Shetty v. International Airport Authority of India (1979) 3 SCC 489 and Ajay Hasia v. Khalid Muzib Sehravardi (1981) 1 SCC 722 (a Constitution Bench Judgment), the Court held that corporations and companies controlled and held by the State Governments will be institutions of those states within the meaning of Article 12 of the Constitution. A Priori, in relation to corporations and companies held and controlled by the Central Government, the `appropriate government' will be the Central Government. In paragraph 28 the court observed: 28. From this perspective and on deeper consideration, we are of the considered view that the two Judge bench in Heavy Engineering Mazdoor Union case narrowly interpreted the words `appropriate government' on the common law principles which no longer bear any relevance when it is tested on the anvil of Article 14.... 28. The question concerning interpretation of the concept of `appropriate government' in Section 2(1)(a) of the CLRA Act 1970 and in Section 2(a) of the Industrial Disputes Act, 1947 was subsequently referred to a Constitution Bench in Steel Authority of India Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the industry carried on by the establishment in question is under the authority of the Central Government. Obviously, there cannot be one test for one part of the definition of "establishment" and another test for another part. Thus, it is clear that the criterion is whether an undertaking/instrumentality of the Government is carrying on an industry under the authority of the Central Government and not whether the undertaking is an instrumentality or agency of the Government for purposes of Article 12 of the Constitution, be it of the Central Government or the State Government. (underlining supplied) 31. In para 39, this Court further held as follows: 39. To hold that the Central Government is "the appropriate Government" in relation to an establishment, the court must be satisfied that the particular industry in question is carried on by or under the authority of the Central Government. If this aspect is kept in mind it would be clear that the Central Government will be the "appropriate Government" under the CLRA Act and the ID Act provided the industry in question is carried on by a Central Government company/an undertaking under the authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ya Mill Mazdoor Sangh (supra) wherein although an authorized controller was appointed to replace the management of the respondent Model Mill, the Rashtriya Mill Mazdoor Sangh judgment had held that the undertaking could not be held to be carried on under the authority of the Central Government. The Constitution Bench quoted the observations from the judgment with approval. 36. In para 44 the Constitution Bench referred to the FCI case (supra). It noted that the FCI judgment had followed the judgments in Heavy Engineering Mazdoor Union and Rashtriya Mazdoor Mill Sangh (supra) to hold that the State Government was the `appropriate government' pertaining to the regional offices and warehouses of the FCI under the CLRA Act. At the end of this para the Constitution Bench concluded "we find no illegality either in the approach or in the conclusion arrived at by the court in these cases. (underlining supplied) 37. In paragraphs 45 and 46, thereafter once again the Constitution Bench turned to the judgment in Air India case and in para 46 it concluded as follows: We have held above that in the case of a Central Government company/undertaking, an instrumentality of the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, i) In its inception the entire share capital and assets of T.M.C. were not solely owned or contributed by the Government of India in view of the donation by Dorabji Trust; ii) T.M.C is not wholly run by the funds of Government of India. Its internal sources are generating 1/3rd fund which is utilized for running the hospital. iii) Its governing Council has the direct control over the activities of T.M.C. The T.M.C is functioning under its own byelaws which suggest that the deep and intensive control is by the Governing Council. iv) The T.M.C. employees are not the Government servants; 39. It was pointed out on behalf of the appellants that Mr. Muthuswamy the Chief Administrative officer of the first respondent had admitted in his evidence that there was no interference from the Central Government in the day-to-day activities of the first respondent and they were looked after by the Directors of the T.M.C. itself. The labour categories of the employees were employed either by the Directors or by the Officers of the council. He admitted that as far as functioning and administration was concerned, the first respondent was an autonomous body. As laid down in the leading dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the two dated 4.2.1957. After the decree was passed by the City Civil Court on 27.3.1957 and the scheme was approved, all the properties of the Hospital came to be vested in the Government of India. The Tata Memorial Centre finds a specific place in the rules of allocation of business framed by the President of India and it is stated to be under the Department of Atomic Energy. In the treatment of the disease of cancer radiation and Isotopes produced by the Bhaba Atomic Research Centre are required to be used and they are made available by the Department of Atomic Energy. Although the society is created to run the administration of the first respondent, under Clause 4 of the agreement dated 6.1.1966, the properties of the Tata Memorial Hospital and Research Centre which were vested in the Government by decree dated 22.3.1957 continue to be vested in the Government of India. It is therefore, submitted that the Division Bench was correct in the view taken by it that the first respondent society continued to function as the delegate of the Central Government. 43. The first respondent and the Division Bench emphasized the recital No. 6 of the agreement dated 6.1.1966 and the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Government is the `appropriate government'. Therefore in an industrial disputes concerning industries, other than specified industries it becomes necessary to examine whether the industry is carried on by or under the authority of the Central Government. When it does not fall under either of the two categories, the State Government will be the appropriate government. 46. It is also material to note that this exercise is to be done basically in the context of an industrial dispute to find out as to whether in relation to any industrial dispute concerning that industry, Central Government is the `appropriate government' or the State Government is the `appropriate government'. Oxford dictionary defines word `concerning' as `involving' or `about'. The word `concerning', according to Webster's Dictionary means `relating to', `regarding' or `respecting' proximate, intimate and real connection with the establishment. It is to be noted that the Industrial Dispute Act is an act for investigation and settlement of industrial disputes and the MRTP and PULP Act 1971 is for recognition of trade unions for facilitating collective bargaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contributed by the Central Government and wages and salaries are determined by it, was also held to be not relevant. 48. In Hindustan Aeronautics the fact that the industrial dispute had arisen in West Bengal and that the `appropriate government' in the instant case for maintaining industrial peace was West Bengal was held to be relevant for the Governor of West Bengal to refer the dispute for adjudication. In Rashtriya Mill Mazdoor case the fact that the authorized controller was appointed by the Central Government to supervise the undertaking was, held as not making any difference. The fact that he was to work under the directions of the Central Government was held not to render the industrial undertaking an agent of the Central Government. 49. In Food Corporation of India (supra), inspite of the fact that FCI is a specified industry under Section 2(i)(a) of the ID Act 1947, this Court considered the definition of `appropriate government' in CLRA Act 1970, and the State Governments were held to be the `appropriate governments' for the regional offices and the warehouses situated in various states wherein the demand for regularization of the services under the CLRA A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the year 1966, the Central Government and the Dorabji Tata Trust entered into an agreement by virtue of which Tata Memorial Hospital and the Indian Cancer Research Centre were amalgamated and the first respondent society was created and the administration and the management of the Centre was vested in the Governing Council of the said Society. The first respondent - Centre was registered as a Society under the Societies Registration Act, 1860 as well as under the Bombay Public Trust Act, 1950. 53. The first respondent heavily relied upon the test of vesting of the property as the main criterion for ascertaining as to who controls the first respondent for the purpose of deciding as to which Government is the Appropriate Government. It was emphasized that under the agreement of 1957, the Dorabji Tata Trust handed over the property to the Central Government and that vesting had been continued in the agreement of 1966 also. It is, however, to be noted that as per this very agreement, the future acquisitions were to vest in the Governing Council of the Society. Rule - 26 of the Rules and Regulations of the first respondent - Society provides that all properties and funds of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also been held by this Court in the Board of Trustees, Ayurvedic and Unani Tibia College, Delhi v. The State of Delhi and Anr. AIR 1962 SC 458 and reiterated in Illachi Devi (D) by L.Rs. and Ors. v. Jain Society, Protection of Orphans India and Ors. AIR 2003 SC 3397. Since the society cannot hold the property in its name, vesting of the property in the trustees is likely to hinder the administration of the trust property, particularly, where the trustees themselves or their legal representatives claim adversely to the trust. It is for this reason that the law vests the property belonging to the society in its Governing Body. 56. The phrase `property belonging to a person' has two general meanings (1) ownership, (2) the absolute right of user (per Martin B in Att. Gen. v. Oxford & C. Railway Co. 31 L.J. (1862) 218 `Belonging' connotes either ownership or absolute right of user ( Wills J in The Governors of St. Thomas', St. Bartholomew's, and Bridewell Hospital v. Hudgell (1901) 1 KB 381. The Centre has an absolute right of user over its immovable properties which it has been exclusively exercising all throughout. Section 5 of the Societies Registration Act clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cil. It is also to be noted that as per Rules and Regulation Nos. 3 and 4 which have been quoted earlier, the administration and management of the Centre is vested in the Council which is declared to be an executive body of the center. As per the foreword to the bye-laws of the Tata Memorial Centre - the final decision on the extent of applicability of these rules to all Tata Memorial Centre employees rests with the Tata Memorial Governing Council. Its decision on the interpretation of these rules adopted for Tata Memorial Centre employees will be final. Thus, as per the Rules and Regulations, the entire administration and management of Tata Memorial Centre is with the Governing Council. 59. It has clearly come in the evidence of Mr. Muthusamy, the Chief Administrative Officer of the first respondent that there was no interference of the Central Government in the day to day activities of the first respondent. The decisions were taken by the directors of the first respondent itself. As can be seen from the bye-laws of the first respondent, the appointments and the service conditions were modelled on the pattern of Department of Atomic Energy, but the pay, allowances and pension, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rections, calls information or supervises business, that will not make the industry an agent of the Government. 62. Hence we have to conclude that even on the test of control and management of the Hospital and the Centre, they are functioning independently under the 1st respondent Society. They cannot be said to be `under the control', of the Central Government. In the circumstances the State Government shall have to be held as the appropriate government for the 1st respondent for the purpose of I.D. Act consequently the MRTU & PULP Act. 63. It is material to note that until the present litigation, neither the Central Government nor the Dorabji Tata Trust or even the Governing Council of the first respondent ever disputed the application of the MRTU and PULP Act to the first respondent establishment. Prior to the Applications leading to the present appeal, the respondent - 1 has also filed Complaints under the MRTU and PULP Act. Neither the appellant nor the second respondent - rival union ever disputed the application of the Act. In fact, the first respondent has in a way, by its own conduct acquiesced into the application of the Act, and the appellant - Union has been recog ..... X X X X Extracts X X X X X X X X Extracts X X X X
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