Tata
Memorial Hospital Workers Union Vs. Tata Memporial Centre & ANR. [2010] INSC
588 (9 August 2010)
Judgment
IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.6394 OF
2010 (ARISING OUT OF SPECIAL LEAVE PETITION (Civil) NO. 7230 of 2009) Tata
Memorial Hospital Workers Union ...Appellant Versus Tata Memorial Centre and
Another ...Respondents
Gokhale
J.
1.
Leave granted.
2.
This appeal is directed against the judgment and order of a
Division Bench of the Bombay High Court dated 10.2.2009 in Appeal No.133 of
2002 arising out of Writ Petition No. 2148 of 2001, whereby the Division Bench
has held that for the first respondent establishment, the Central Government
was the `appropriate government' for the purposes of application of Section
2(3) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair
Labour Practices Act 1971 (hereinafter referred to as the M.R.T.U. and P.U.L.P.
Act) read with Section 2(a) of the Industrial Disputes Act 1947 (hereinafter
referred to as the I.D. Act). The Division Bench has held that the State
Government was not the `appropriate 2 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, registered under the Trade Unions
Act 1926 and the employees of the first respondent are its members. It is
already registered under Chapter III of the above referred MRTU and PULP Act as
the recognized union for the employees under the first respondent by an order
passed way back on 2.12.1985 by the Industrial Court, Mumbai. Respondent No.2
`Tata Memorial Hospital Kamgar Sanghatana' (i.e. workers association) is
another trade union functioning under the first respondent. By filing
Application MRTU No. 15 of 1994 before the Industrial Court, Mumbai, the
respondent No. 2 sought cancellation of the recognition of the appellant union
under Section 13 of the MRTU and PULP 3 Act. Thereafter by filing another
Application MRTU No.16 of 1994, the second respondent sought its own
recognition in place of the appellant union under Section 14 of the MRTU and
PULP Act. Both these Applications Nos. 15 and 16 of 1994 were heard together.
Oral and documentary evidence was led by parties. The report of the Investigating
officer appointed for the verification of the membership of the two trade
unions was considered. The first respondent in its written statement raised an
objection to the maintainability of these proceedings under MRTU and PULP Act
by submitting that the `appropriate government' for the first respondent was
the Central Government and not the State Government, and hence, the proceedings
under the MRTU and PULP, were not maintainable.
4.
The Application (MRTU) 15 of 1994 had been filed on the footing that
the registration of the appellant as a trade union itself had been cancelled by
the Registrar of Trade Unions under the Trade Union Act, 1926. The appellant
pointed out to the Industrial Court that the order of cancellation was
misconceived and had in fact been stayed by the Bombay High Court by its order
passed in the Writ Petition No. 452 of 1994. Thereupon, the second respondent
conceded this position and filed a pursis (memo) that Application (MRTU) No. 15
of 1994 be allowed to be withdrawn. The Industrial Court disposed of the two
proceedings by its common judgment and order dated 29.6.2001. In that order it
recorded that Application MRTU No. 15 of 1994 was being disposed of for want of
prosecution. As far as the Application No. 16 of 1994 is concerned, the
Industrial Court accepted the report of the Investigating Officer whereunder he
had held that during the relevant period for 4 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 & Ors. vs. National
Union Waterfront Workers & Ors. (2001) 7 SCC 1 (which had been rendered in
the meanwhile on 30.8.2001). This order of the Single Judge has come to be
reversed by the impugned judgment and order passed by the Division Bench. The
Division Bench has held that the Governing Council of the first respondent was
managing the institution as a delegate of the Central Government.
This was
also on basis of its consideration of the judgment in Steel Authority of India
& Ors. (supra). The Division Bench held that the Central Government was the
5 appropriate government for the first respondent and allowed the appeal.
Consequently,
it set aside the orders passed by the Single Judge as well as by the Industrial
Court.
6.
Being aggrieved by this judgment and order of the Division Bench
the present appeal by special leave has been filed. The appeal raises the
question as to whether the Division Bench correctly applied the law laid down
by this Court in Steel Authority of India (Supra) to the facts of the present
case. Though the second respondent has been described as a proforma respondent,
notices were issued to both the respondents and the affidavit of service with
proof has been filed by the appellant with respect to both of them. The
petition has been opposed by the first respondent by filing an exhaustive
counter and the appellant has filed a rejoinder thereto. Mr. Colin Gonsalves,
learned Senior Counsel has addressed us on behalf of the appellant, whereas Mr.
Soli J.Sorabjee, learned Senior Counsel, has defended the order of the Division
Bench. Both the parties have submitted their written submissions and we have
considered the same also.
7.
Necessary Relevant Facts Before dealing with the rival submissions
on the issue before the Court, viz. as to whether in the facts of the present
case the central government or the state government is the `appropriate
government,' it will be desirable to refer to the necessary relevant facts. The
trustees of a public charitable trust known as Sir Dorabji Tata Trust,
established sometime in the year 1940, a hospital in Mumbai, 6 named as the
Tata Memorial Hospital for the Treatment and Cure of Cancer and Allied
Diseases. The hospital was then being maintained out of the funds of the trust
and also from the grant made available from time to time by the Central
Government and by the then Government of Bombay.
8.
The Government of India 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 the Board. Three of them
were to be nominated by the Government of India and three by Sir Dorabji Tata
Trust. The 7 Superintendent of the Hospital was to be the ex-officio seventh
member of the Governing Board and its Secretary. Clause (3) of this agreement
provided as follows:
"The
Trustees of Sir Dorabji Tata Trust shall convey, assign, transfer and deliver
to the Government of India the immoveable properties and moveable properties
and assets of the hospital including the Cancer Infirmary Fund and the assets
of the Indian Cancer Research Centre and the three plots refereed to
above" (i.e. plots 107, 108 & 109 of Scheme No.60, Naigaum
Estate,Mumbai).
10.
The Trustees accordingly, filed a suit being suit No. 568 of 1957
in the Bombay City Civil Court for framing a Scheme and for giving effect to
and incorporating the said agreement dated 4.2.1957. The City Civil Court
passed a decree on 22.3.1957 and sanctioned the scheme as annexed to the
schedule. The relevant part of the court's order recorded that the properties
to be conveyed, transferred or assigned by the trustees to the government being
immovable properties described in schedule `B' thereto are hereby vested in the
government.
The
administrative control of the Tata Memorial Hospital and the Indian Cancer
Research Centre was thereafter transferred to the Government of India. It first
came under the Ministry of Health and thereafter under the Department of Atomic
Energy with effect from 1.2.1962.
11.
The Tata Memorial Centre has come to be specifically mentioned in
the rules for allocation of business of Government of India framed under
Article 77 of the Constitution of India. The President of India in exercise of
his powers under Article 77, has framed by order dated 14.1.1961, the Rules for
allocation of business of the Government of India. Rule 2 thereof deals with
the allocation of business and 8 it states that the business of the government
shall be transacted in the Ministries, Departments and Secretariats, as
specified in the first schedule to these rules (all of which are referred to as
the departments). Item 22 of the first schedule to the said rules, deals with
the Department of Atomic Energy and item 10 of the annexure to the schedule
concerning Department of Atomic Energy reads as followed:
"10.
All matters relating the Tata Memorial Centre, Bombay."
12.
Subsequently, an agreement 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 Trustees of the Sir Dorabji Tata Trust;
(c) The
Director of the Centre (ex-officio) The Director, TMH and the Director, CRI will
be permanent Invitees to the meetings of the Council. PROVIDED that, to
represent other interests, not more than two additional members may be co-opted
by the Council, for such periods as the Council may decide with the concurrence
of the Government of India and the Trustees of the Sir Dorabji Tata Trust.
13.
The question for our consideration is whether the first respondent
functions under the authority of the Central Government as its delegate as held
by the Division Bench or is functioning as an independent entity. This will
enable us to decide as to whether the Central Government or the State
Government is the "appropriate government" for the first respondent.
We have also to keep in mind that we have to decide this issue in the context
of determination of an application for recognition of a trade union.
Statutory
Framework
14.
As stated earlier, the two Applications filed before the
Industrial Court, Mumbai which had led to the present Special Leave Petition
were filed under Sections 13 & 14 of the MRTU and PULP Act 1971. These
Sections 13 & 14 appear in Chapter-III of the MRTU & PULP Act which
Chapter deals with Recognition of unions. Section 13 deals with Cancellation of
recognition and suspension of rights of a recognized union on the conditions stipulated
therein. Section 14 deals with Recognition of other union in place of a union
already registered as a recognized 1 union and conditions therefor. As the
preamble of this Act lays down, one of the objectives of this Act is to provide
for the recognition of trade unions for facilitating collective bargaining for
certain undertakings, to state their rights and obligations;
and to
confer certain powers on unrecognized unions. The other objective of this Act
is to prevent unfair practices with which, we are not directly concerned in the
present matter.
15.
Since the question raised in the matter is whether the two
applications filed under Sections 13 and 14 of MRTU and PULP Act were
maintainable or not, the same will depend upon as to whether the State
Government is the `appropriate government' for the first respondent. Section 2
of the MRTU and PULP Act is relevant in this behalf. It deals with the extent,
commencement and application of the Act. We are concerned 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 1 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 admittedly not covered under the Bombay Industrial
Relations Act 1946. The question is whether in relation to any industrial
dispute concerning the first respondent, the State Government is the
`appropriate government' under the Industrial Disputes Act 1947.
17.
It, therefore, becomes necessary to look into the definition of
`appropriate government' under the Industrial Disputes Act 1947. Under Section 2(a) of the Industrial Disputes Act
1947 `appropriate government' means;
(i) in
relation to any industrial dispute concerning an industry carried on by or
under the authority of the Central Government, (or concerning, industries
specifically mentioned in this sub- section starting from a railway company
upto a major port), the Central Government; and (ii) in relation to any other
industrial dispute, the State Government.
Thus, it
is clear that under the Industrial
Disputes Act, the Central Government is the
`appropriate government' in relation to the industrial disputes concerning the
industries specified under Section 2 (a) (i) and for the industries carried on
by or under the authority of the Central Government. Excluding these two
categories of industries in relation to any other industrial dispute, it is the
State Government which is the `appropriate government'.
18.
Entry 22 in list III - Concurrent List to the Seventh Schedule to
the Constitution of India relates to `Trade Unions; Industrial and Labour
disputes'. Entry 23 thereunder is `social security and social insurance;
employment and unemployment'. Entry 24 is `welfare of labour including
conditions of work, provident fund, employer's liability, workmen's
compensation, invalidity and old age pensions and maternity benefits'. Subject
to the provisions contained in sub-clauses (1) and (2) in Article 246, the
Legislature of a State can also make laws on these subjects, and this is how
the MRTU and PULP Act 1971 makes provisions for recognition of trade unions for
collective bargaining, and for prevention of unfair labour practices.
It is
also in the fitness of things that the Industrial Disputes Act which is the principal Central Act for investigation and
settlement of Industrial Disputes lays down that for the industrial disputes
concerning the specified industries and for those carried on by or under the
authority of the Central Government, the Central 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 1 Engineering Mazdoor Union vs. The State of Bihar
(1969) 3 SCR, 1995, 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 Corporation Ltd., a company wholly owned by the
Central Government and its workmen for its adjudication by the Industrial
Tribunal. The appellant mazdoor union challenged the reference contending that
the `appropriate government' to refer the dispute was the Central Government
and not the State Government. The High Court rejected the contention, and hence
the matter was carried to this Court. This Court noted that the Heavy
Engineering Corporation is a Government company within the meaning of Section
617 of the Companies Act, since its entire share capital was contributed by the
Central Government and its shares were registered in the name of the President
of India and officers of the Central Government. The memorandum of association
and the articles of association of the company conferred large powers on the
Central Government including the power to give directions as regards the
functioning of the company. The wages and salaries of the employees were also
determined in accordance with these directions. The Directors of the company
were appointed by the President of India. The Company was described in its
standing orders as a Government Undertaking.
20.
It was accepted by the corporation that it could not be said to be
an `industry' carried on by the Central Government. The limited issue was
whether it could be regarded as an `industry', carried on under the authority
of the Central Government. The question was as to how to construe the phrase
`under the authority of Central Government'.
This
court held;
....There
being nothing in s. 2 (a) to the contrary, the word `authority' must be
construed according to its ordinary meaning and therefore must mean a legal
power given by one person to another to do an act. A person is said to be
authorized or to have an authority when he is in such a position that he can
act in a certain manner without incurring liability, to which he would be
exposed but for the authority, or, so as to produce the same effect as if the
person granting the authority had for himself done the act. For instance, if A
authorizes B to sell certain goods for and on his behalf and B does so, incurs
no liability for so doing in respect of such goods and confers good title on
the purchaser. There clearly arises in such a case the relationship of a
principal and an agent. The words "under the authority of"
means
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 and memorandum
of association and its articles of association. The mere fact that the entire
share 1 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 court noted that a
notice to the President of India and the officers of the Central Government,
who hold between them all the shares of the company would not be a notice to
the company nor can a suit maintainable by and in the name of the company be
sustained by or in the name of the President and the said officers.
22.
The Court noted that the extensive powers are conferred on the
Central Government including the power to give directions as to how the company
should function, the power to appoint its Director and even the power to
determine the wages and salaries payable by the company to its employees but
these powers were derived by the company's memorandum of association and the
articles of association and not by reason of the company being an agent of the
Central Government. The court thereafter observed as follows:
..... The
question whether a corporation is an agent of the State must depend on the
facts of each case. Where a statute setting up a corporation so provides, such
a corporation can easily be identified as the agent of the state as in Graham
vs. Public Works Commissioners ( [1901] 2 K.B.
781)
where Phillimore, J. said that the Crown does in certain cases establish with
the consent of Parliament certain officials or bodies who are to be treated as
agents of the Crown even though they have the power of contracting as
principals. In the absence of a statutory provision, however, a commercial
corporation acting on its own behalf, even though it is controlled wholly or
partially by a Government department, will be ordinarily presumed not to be a
servant or agent of the State. The fact that a minister appoints the members or
directors of a corporation and he is entitled to call for information, to give
directions which are binding on the directors and to supervise over the conduct
of the business of the corporation does not render the corporation an agent of
the Government. (see The State Trading Corporation of India Ltd v. The 1
Commercial Tax Officer, Visakhapatnam [1964] 4 SCR 99 at 188, and Tamlin v.
Hannaford [1950] 1 K.B. 18 at 25, 26. Such an interference that the corporation
is the agent of the Government may be drawn where it is performing in substance
governmental and non commercial functions. (cf London County Territorial and
Auxiliary forces Association v. Nichlos) [1948] 2 All E.R. 432.
(underlining
supplied)
23.
Then the Court looked into the definition 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 followed consistently
including the last relevant judgment of the Constitution Bench in Steel
Authority of India Ltd. (Supra), though with a slight divergence. The next
judgment of significance after Heavy Engineering Mazdoor Sangh, is Hindustan
Aeronautics 1 Ltd. vs. Workmen reported in (1975) 4 SCC 679. In that matter a
bench of three judges was concerned with the dispute between the management of
the Barrackpore branch of the appellant Government Company situated in West
Bengal and its employees. The appellant had challenged the Award of the Fifth
Industrial Tribunal, West Bengal and one of the challenges was to the
competence of the Government of West Bengal to make the reference of the
industrial dispute. It was contended that the Barrackpore branch was under the
direct control of the Bangalore Division of the Company and since it was a
Government Company constituted under section 617 of the Companies Act, (the
shares of which were entirely owned by the Central Government), the reference
ought to have been made either by the Central Government or by the Government
of Karnataka. This Court negatived the contention. It noted that the
Barrackpore Branch was a separate branch and for the purposes of this Act it
was an industry carried on by the Company as a separate unit. This court
followed the dicta in Heavy Engineering Mazdoor Union (supra) and observed in
para 4 as follows:
"The
workers were receiving their pay packages at Barrackpore and were under the
control of the officers of the company stationed there. If there was any
disturbance of industrial peace at Barrackpore where a considerable number of
workmen were working the appropriate government concerned in the maintenance of
the industrial peace was the West Bengal Government. The grievances of the
workmen of Barrackpore were their own and the cause of action in relation to
the industrial dispute in question arose there. The reference, therefore, for adjudication
of such a dispute by the Governor of West Bengal was good and valid.
(underlining supplied) 1
25.
In Rashtriya Mill Mazdoor Sangh, Nagpur vs. Model Mills, reported
in 1984 (Supp) SCC 443, a reference (though under the Bombay Industrial
Relations Act, 1946) of the demands of the employees for payment of bonus was
challenged on the ground that an authorized controller under the Industries
(Development and Regulation) Act, 1951 had been appointed in respect 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. vs. P.K. Sarkar AIR 1952 Calcutta
Page 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 Government does
not render the industrial undertaking an agent of the Central Government and
therefore, 1 could not be said to be an establishment engaged in an industry
carried on by or under the authority of the Central Government."
26.
The Judgment in Rashtriya Mill Mazdoor Sangh (supra) was followed
by the Judgment in Food Corporation of India Workers Union vs. Food Corporation
of India reported in (1985) 2 SCC 294. Therein, the Court was concerned with
the Writ Petition filed by the employees seeking the regularization of their
services under the Contract Labour (Regulation and Abolition) Act 1970 (for
short the CLRA Act). In that matter, inspite of the fact that FCI is a
specified industry under Section 2(a) (i) of the Industrial Disputes Act 1947, this Court referred to the definition of `appropriate
government' under the CLRA Act 1970. It referred to judgments in Heavy
Engineering Mazdoor Union and Rashtriya Mill Mazdoor Sangh (supra) with
approval, and held that for the regional offices and warehouses which were
situated in various states, the State Governments were the `appropriate
Governments' and not the Central Government.
27.
The scheme of the CLRA Act 1970 came up for consideration before a
bench of three Judges in Air India Statutory Corporation vs. United Labour
Union (1997) 9 SCC 377. The Court was concerned with the question as to whether
the Central Government was the competent appropriate government for the
purposes of the notification which it had issued under that Act to abolish the
Contract Labour system in the establishment of the appellant. The court held
that the Central Government was the appropriate government. The definition of
`appropriate government' under Section 2 (1) (a) of that Act was examined by
this Court and which reads as follows:
2
"[(a) "appropriate Government" means,- (i) in relation to an
establishment in respect of which the appropriate Government under the Industrial Disputes
Act, 1947 (14 of 1947), is the Central Government,
the Central Government.
(ii) in
relation to any other establishment, the Government of the State in which that
other establishment is situated;] A bench of three Judges, therefore, examined
the efficacy of the judgments starting from Heavy Engineering Mazdoor Union
case (supra). After examining the principles arising out of some of the leading
judgments on Article 12 of the Constitution of India, such as those in the case
of R.D. Shetty vs. International Airport Authority of India (1979) 3 SCC 489
and Ajay Hasia vs. 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 2 Industrial
Disputes Act, 1947 was subsequently referred to a
Constitution Bench in Steel Authority of India Ltd. vs. National Union
Waterfront Workers, reported in [(2001) 7 SCC 1]. The Constitution Bench
examined the relevant provisions and the judgments including those in the cases
of R.D. Shetty and Ajay Hasia (supra). The question decided by Constitution
Bench of this Court in Ajay Hasia was with respect to Jammu & Kashmir
Regional Engineering College, Srinagar, which was registered as a society under
the Jammu & Kashmir Registration of Societies Act 1898 and wherein it was
held to be a State within the meaning of Article 12 of the Constitution.
29.
In para 37 of the judgment in Steel Authority of India Ltd.
(supra), this court held that merely because the government companies, corporations
and societies are instrumentalities or agencies of the Government, they do not
become agents of the Central or the State Government for all purposes. The
Court held as follows:
"37.
We wish to clear the air that the principle, while discharging public functions
and duties the government companies/corporations/societies which are
instrumentalities or agencies of the Government must be subjected to the same
limitations in the field of public law -- constitutional or administrative law
-- as the Government itself, does not lead to the inference that they become
agents of the Centre/State Government for all purposes so as to bind such
Government for all their acts, liabilities and obligations under various
Central and/or State Acts or under private law."
30.
In para 38, this Court thereafter held as follows:
"
38. From the above discussion, it follows that the fact of being an
instrumentality of a Central/State Government or being "State" within
the meaning of Article 12 of the Constitution cannot be determinative of 2 the
question as to whether an industry carried on by a company/corporation or an
instrumentality of the Government is by or under the authority of the Central
Government for the purpose of or within the meaning of the definition of "appropriate
Government" in the CLRA Act.
.................................................
Further,
the definition of "establishment" in the CLRA Act takes in its fold
purely private undertakings which cannot be brought within the meaning of
Article 12 of the Constitution. In such a case, how is "appropriate
Government" determined for the purposes of the CLRA Act or the Industrial Disputes
Act? In our view, the test which is determinative is:
whether 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 of the Central
Government. Such an authority may be conferred, either by a statute or by
virtue of the relationship of principal and agent or delegation of power. Where
the authority, to carry on any industry for or on behalf of the Central
Government, is conferred on the government company/any undertaking by the
statute under which it is created, no further question arises. But, if it is
not so, the question that arises is whether there is any conferment of
authority on the government company/any undertaking by the Central Government
to carry on the industry in question. This is a question of fact and has to be
ascertained on the facts and in the circumstances of each case."
32.
In the next para 40 the Constitution Bench states that it shall
refer to the cases of this court on this point and thereafter examines in
paragraphs 41 to 44 2 the earlier referred judgments in Heavy Engineering
Mazdoor Union, Hindustan Aeronautics, Rashtirya Mill Mazdoor Sangh and Food
Corporation of India (supra).
33.
In paragraph 41 of the judgment, the Constitution Bench examined
the Judgment in Heavy Engineering Mazdoor Union case. In Heavy Engineering
Mazdoor Union the court had observed that an inference that the corporation was
the agent of the Government might be drawn where it was performing in substance
governmental and not commercial functions. The Constitution Bench disagreed
with the distinction thus made between the Governmental activity and commercial
function of Government Companies. Barring this limited disagreement, however at
the end of para 41 the Constitution Bench observed that it is evident that the
court correctly posed the question whether the State Government or the Central
Government was the `appropriate government' and rightly answered it.
34.
In paragraph 42, the Constitution Bench examined the judgment of
Hindustan Aeronautics Ltd. (supra). The Constitution Bench noted that the
judgment in Heavy Engineering Mazdoor Union case was followed in Hindustan
Aeronautics and it had taken note of the factor that if there was any
disturbance of industrial peace in Barrackpore, the `appropriate government'
concerned for the maintenance of internal peace was the West Bengal Government.
The court observed that the factors which weighed with the Court could not be
said to be irrelevant.
35.
In para 43 the Constitution Bench examined the judgment in
Rashtriya Mill Mazdoor Sangh (supra) wherein although an authorized controller
was 2 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 Government, carrying on an industry, the criteria to
determine whether the Central Government is the appropriate Government within
the meaning of the CLRA Act, is that the industry must be carried on by or
under the authority of the Central Government and not that the
company/undertaking is an instrumentality or an agency of the Central
Government for purposes of Article 12 of the Constitution; such an authority
may be conferred either by a statute or by virtue of the relationship of
principal and agent or delegation of power and this fact has to be ascertained
on the facts and in the circumstances of each case. In view of this conclusion,
with due respect, we are unable to agree with the view expressed by the learned
Judges on interpretation of the expression "appropriate Government"
in Air India case."
(underlining
supplied) 2 Submissions on behalf of the Appellant
38.
On this background the submission on behalf of the appellant was
that way back since 1966 when the Tata Memorial Centre (T.M.C.) was constituted
into a separate society and a public trust, it has all throughout functioned as
an independent entity and it could not be considered to be a delegate of the
Central Government. It was submitted that at the inception the Tata Memorial
Hospital was set up out of the funds of Sir Dorabji Tata Trust and not of the
Central Government.
The
Government of India established the Indian Cancer Research Centre, but that was
also under an agreement dated 7.10.1953 and in collaboration with the trustees
of the Sir Dorabji Tata Trust. The Government of India did give the initial
grant and undertook to provide recurring expenses in respect of the staff and contingencies
of the management but the centre was established on the land belonging to the
Sir Dorabji Tata Trust. Later on, the Central Government did take over the
Hospital after the Trust decided to dedicate it to the nation. However, at all
material times, part of the expenses of the Hospital have been met from the
funds generated by the Hospital. After the formation of Respondent No. 1 as a
registered society in 1966 also, the internal sources generate 1/3rd, (i.e
approximately 25 crores out of 75 crores) of the funds which are utilized for
running the Hospital. Thus, the following factors approved by the Industrial
Court and the learned Single Judge were pressed into service on behalf of the
appellants, 2 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 decisions on this issue from time to time, including the
one in Steel Authority of India (supra) whether the industry is carried on by
or under the authority of the Central Government is to be decided on the facts
of each case.
In view
of the facts which have come on record as above, it was submitted that the
judgment of the Industrial Court could not have been faulted and since it was
on the 2 basis of the facts and circumstances placed on record, it was rightly
left undisturbed by the learned Single Judge.
40.
The judgment of the Division Bench was assailed also for laying
emphasis on recital No. 6 of the agreement dated 6.1.1966 between the trustees
of Sir Dorabji Tata Trust and Government of India and not the subsequent
clauses of that agreement. It was pointed out that in recital No. 9 of that
agreement, it was proposed to amalgamate the two institutions and to entrust
the control and management to the newly created body under the agreement. It
was emphasized that as per clause 4 of the agreement all subsequent
acquisitions shall vests in the holding trustees and clause 5 provides that the
Centre shall be under the direct management and control of the Council to be
created.
41.
It was submitted that the appellant trade union had been
recognized way-back in the year 1985 under the MRTU and PULP Act and several
proceedings had been initiated by both the parties under this Act. The first respondent
had thus in a way accepted that the said act does apply to it and now it cannot
be permitted to contend to the contrary. It was, therefore, submitted that the
Division Bench had erred in ignoring that once the society was formed and all
the activities were transferred to the society, it could no longer be
considered as a delegate of the Central Government and that the Division Bench
seriously erred in its understanding of the law laid down by this Court.
2
Submissions on behalf of the first respondent
42.
As against the submissions on behalf of the appellant, it was
submitted on behalf of the first respondent that after the Hospital was
dedicated to the nation, at all material times the first respondent functioned
under the authority of the Central Government. The Tata Memorial Hospital set
up by Sir Dorabji Tata Trust was dedicated to the nation and the control
thereof was taken over by the Government of India with effect from 1.4.1957 by
virtue of the agreement between 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 relevant portion of the Decree and the scheme;
The
recital No. 6 reads as follows:- "6. AND WHEREAS the Trustees of the Sir
Dorabji Tata Trust being desirous of dedicating this Hospital to the Nation
with all its assets including the Cancer Infirmary Fund and the Three plots
Nos. 107, 108 and 109 of scheme No. 60, Naigaum Estate, requested the
Government of India to take over the control and management of the said
Hospital with effect from the First day of April One Thousand Nine Hundred and
Fifty Seven and the Manage the same at their own expense as from the said date
onwards upon the terms and conditions set forth in the Agreement made on the
Fourth Day of February One Thousand Nine Hundred and Fifty Seven (hereinafter
called the Hospital Agreement)."
44.
The part of the decree emphasized is as follows:- AND THIS COURT
DOTH FURTHER ORDER that the properties to be conveyed, transferred and assigned
by the Trustees to the Government of India being the immovable properties
particularly described in Schedule B hereto and they are hereby vested in the
Government of India"
The
relevant part of the scheme reads thus:- "The Trustees of Sir Dorabji Tata
Trust shall hand over to the Government of India and the Government of India
shall take over the control and management of the Tata Memorial Hospital and
shall manage the same at their own expenses as and from 1st April 1957."
45.
Tests emerging for determining whether the industry is carried on
under the authority of the Central Government or the State Government Having
seen the statutory framework it is clear that when it comes to an industry
governed under the Industrial
Disputes Act 1947, to be covered under 3 the MRTU and
PULP Act, the State Government has to be the `appropriate government' in
relation to any industrial dispute concerning such industry. As provided in
Section 2 (3) of the MRTU and PULP Act, we have to fall back on the definitions
of `industry' and `appropriate government' under the Industrial Disputes Act
1947. As per the scheme of Section 2 (a) of the Industrial Disputes Act, for the industrial disputes concerning the industries
specified in sub-section (i), and for the industries which are carried on by or
under the authority of the Central Government, the Central Government is the
appropriate government. Section 2 (a) (ii) provides that `in relation to any
other industrial dispute' 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 3 disputes
and the MRTP and PULP Act 1971 is for recognition of trade unions for
facilitating collective bargaining for certain undertakings with which we are
concerned in the present matter, and for prevention of certain unfair practices
amongst other objectives. This being the position it is to be noted that the
examination of the issue as to which government is the `appropriate government'
is to be carried out in this context.
47.
As far as an industry `carried on by the Central Government' is
concerned, there need not be much controversy inasmuch as it would mean the
industries such as the Railways or Post and Telegraph, which are carried on
departmentally by the Central Government itself. The difficulty arises while
deciding the industry which is carried on, not by but `under the authority of
the Central Government'. Now, as has been noted above, in the Constitution
Bench Judgment in Steel Authority of India Limited (supra), the approach of the
different Benches in four earlier judgments has been specifically approved and
the view expressed in Air India (supra) has been disagreed with. The phrase
`under the authority' has been interpreted in Heavy Engineering (Supra), to
mean `pursuant to the authority' such as where an agent or servant acts under
authority of his principal or master. That obviously cannot be said of a
company incorporated under the Companies Act, as laid down in Heavy Engineering
Mazdoor Union case (supra).
However,
where a statute setting up a corporation so provides specifically, it can
easily be identified as an agent of the State. The Judgment in Heavy
Engineering Mazdoor Sangh observed that the inference that a corporation was an
agent of the 3 Government might also be drawn where it was performing in
substance governmental and non commercial function. The Constitution Bench in
Steel Authority case (supra) has disagreed with this view in para 41 of its judgment.
Hence,
even a corporation which is carrying on commercial activities can also be an
agent of the state in a given situation. Heavy Engineering Judgment is
otherwise completely approved wherein, it is made clear that the fact that the
members or directors of corporation and he is entitled to call for information,
to give directions regarding functioning which are binding on the directors and
to supervise over the conduct of the business of the corporation does not
render the corporation an agent of the Government. The fact that entire capital
is 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 3 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 Act had arisen.
50.
The propositions in Steel Authority are to be seen on this
background viz. that merely because the government companies / corporations and
societies are discharging public functions and duties that does not by itself
make them agents of the Central or the State Government. The industry or
undertaking has to be carried under the authority of the Central Government or
the State Government. That authority may be conferred either by a statute or by
virtue of a relationship of principle and agent, or delegation of power. When it
comes to conferring power by statute, there is not much difficulty. However,
where it is not so, and whether the undertaking is functioning under authority
it is a question of fact. It is to be decided on the facts and circumstances of
each case.
51.
Application of these tests to the facts of the present case.
As far as
the facts of the present case are concerned, as can be seen from the
submissions of the parties, the determination of the question as to which
Government is the appropriate Government for the first respondent -
establishment, will depend upon two issues - (1) How is the property of the
first respondent vested? and (2) Whether the control and management of the
Hospital and the Research Centre is independently with the first respondent? 3
52.
How is the property of the first respondent vested.
As can be
seen from the facts, which have come on record, the Tata Memorial Hospital was
set up by Sir Dorabji Tata Trust. It was being maintained out of the funds of
the Trust itself as well as from the grants made over by the Central Government
as well as by the State Government. The Indian Cancer Research Centre was set
up by the joint collaboration of Sir Dorabji Tata Trust and the Central
Government by an agreement dated 07.10.1953. The initial grant for the Center
was given by the Central Government and it was meeting the expenses of the
Centre though it was set up on the land belonging to the Trust. In 1957 Sir
Dorabji Tata Trust decided to dedicate to the nation the property on which the
Tata Memorial Centre stands. An agreement was entered in that year between the
trustees and the Central Government. The control and the management of the
hospital was transferred to the Central Government and a vesting order was
passed in the same year to that effect by the City Civil Court in appropriate
proceedings. In 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
Centre (except the immovable properties as specified) vest in the council:
"26.
Properties and Funds vested in the Council: Except the existing immovable
properties of the Centre and such immovable properties as may be vested in the
Holding Trustees, all the other properties of the Centre shall vest in the
Council and more particularly the following:
(a)
recurring and non-recurring grants made by Government;
(b) other
grants, donations and gifts (periodical or otherwise), other than those
intended to form the corpus of the property and funds of the Centre or held for
the benefit of the Centre by the Holding Trustees.;
(c) the
income derived from the immovable properties and the income of the funds vested
in the Holding Trustees and income of the funds vested in the Council and also
fees, subscription and other annual receipts; and (d) all plant and machinery,
equipment and instruments (whether medical, surgical, laboratory, workshop or
of any other kind), books and journals, furniture, furnishings and fixtures
belonging to the Centre."
54.
However, even when it comes to the immovable properties, Section -
5 of the Societies
Registration Act provides for deemed vesting of the
properties 3 belonging to a society into the Governing Body of such society.
Section - 5 of the Societies Registration Act
reads as follows:
"5.Property
of society how vested - The property, movable or immovable, belonging to a
society registered under this Act, if not vested in trustees, shall be deemed
to be vested, for the time being, in the governing body of such society, and in
all proceedings, civil and criminal, may be described as the property of the
governing body of such society by their proper title."
55.
In this behalf, we must keep in mind, the raison d'etre of the
above referred to Section - 5 that once a trust is established and a society is
registered for the administration of the trust, the statute contemplates that
the society should be fully autonomous and that the lack of actual transfer of
property of the trust should not prevent the governing body in its
administration. Law recognizes that it would be proper to regard that as done
which ought to have been done. The deeming provision creates a fictional
vesting in favour of the Governing Council and not in favour of the Society or
the Trust. This is also for the reason that society is not a body corporate
which has also been held by this Court in the Board of Trustees, Another [AIR
1962 SC 458] and reiterated in Illachi Devi (D) by L.Rs. and 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. vs. Oxford & C. Railway Co. 31 L.J. (1862) 218 at 227) `Belonging'
connotes either ownership or absolute right of user ( Wills J in The Governors
of St. Thomas', St. Bartholomew's, and Bridewell Hospital vs. 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 declares that the property
belonging to the society, meaning under its user, if not vested in the trustees
shall be deemed to be vested in the Governing Council of the society. In the
present case, it is nobody's case that the property remains vested in the
Trustees of the Dorabji Tata Trust. It has been canvassed on behalf of the
first respondent that the property is vested in the Central Government.
However,
the Central Government has never claimed any title to the property adverse to
the first respondent - Tata Memorial Centre. It is true that the property
dedicated to the Tata Memorial Centre has not been transferred to the Society
by the Central Government. But the fact is that it is the Governing Council of
the first respondent which has been administering and controlling the day to
day affairs of Tata Memorial Centre and its property funds, employment of its staff
and their conditions of service. Hence, in view of the above referred to
factual as well as legal scenario the first issue will have to be decided that
the property dedicated to the first respondent will be deemed to be vested in
the Governing Council of the first respondent - Society.
57.
Whether the Control and Management of the Hospital and the
Research Centre is independently with the first respondent.
As far as
the control and management are concerned, it is clear from the facts referred
to above that the Central Government has the power to appoint four nominees on
the Governing Council of the first respondent. We have already seen, as held in
Heavy Engineering Mazdoor Union Case (Supra), mere power to appoint the
Directors does not warrant a conclusion that the particular undertaking is a
Central Government Undertaking. The question is whether the undertaking is
functioning as the agent of the Central Government. In the instant case, the
society was created to entrust the control and management of the Hospital and
the Research Centre to the Society. Recital No.9 of the agreement of the 1966
specifically states as follows:
"9)
AND WHEREAS the Government of India and the Trustees of the Sir Dorabji Tata
Trust are now desirous of amalgamating the two institutions and entrusting
their control and management to a society."
58.
Consequently, Rule - 3 of the Society, which has been referred to
earlier, also lays down that the administration and the management vests in the
Governing Council. 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".
3 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, etc. are on the pattern of the Mumbai
Municipal Corporation, and which are fixed by the decisions of the Governing
Council of the first respondent. The material and the evidence as referred to
above clearly show that the entrustment of the management and control of the
Hospital and the Research Centre to the Society was complete and it has been so
functioning thereafter.
60.
Besides, as observed in Heavy Engineering Mazdoor Union Case
(supra), if we look to the definition of `employer' under the Industrial Disputes
Act, in a case where an industry is carried on by or
under the authority of the Government, the employer is defined as the authority
prescribed in this behalf or Head of the Department. In the instant case, no
such authority has been prescribed, nor any head of the department notified by
the Central Government. On the contrary, right from the time the society was
created, its administration and management is completely under its Governing
Council and it is functioning 4 independently. No contrary evidence has been
produced. The evidence of Mr. Muthusamy, the Chief Administrative Officer of
the Tata Memorial Centre establishes the independent functioning of the first
respondent under its Governing Council. It is the Governing Council which has
been exercising the executive powers of the employer.
61.
It was then submitted that mentioning of the Tata Memorial Centre
in the Rules for Allocation of Business of Government of India is a pointer to
the control of the Central Government. Insofar as the Rules of business of the
Government of India are concerned, they are for the purpose of allocation of
business between various departments of Government of India whenever the
Government of India has to take a decision. As rightly held by a Division Bench
of Verma reported in 1997 (75) Indian Factories and Labour Reports Page -4 mere
allocation of business under any department would not in any manner decide the
issue as raised in the present case as to whether a particular industry is
under the control of the Central Government. The business rules cannot be
conclusive to show that any institution or organization listed under the
allocation of business, would be part of any department of the Government of
India. Besides, as noted in Heavy Engineering Mazdoor Union (supra) even if a
Minister appoints the directors, gives directions, 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 recognized under the Act right from 1985.
64.
In view of all these factors, it is not possible for us to sustain
the judgment of the Division Bench of the Bombay High Court. The Division Bench
has clearly erred in its consideration of the judgment in the Steel Authority
of India Case. The first respondent cannot be held to be functioning under the
authority of the Central Government. The State Government is therefore the
appropriate Government for the respondent No. 1 for the purposes of ID Act and
MRTU and PULP Act. The two Applications filed by respondent No. 2 will have to
be held as 4 maintainable under MRTU and PULP Act. The order of the Industrial
Court holding them to be maintainable but dismissing them on merits is held to
be correct. In the circumstances, the appeal is allowed. The order passed by
the Division Bench of the Bombay High Court is set aside and the order passed
by the Industrial Court as confirmed by the learned Single Judge, is restored.
The Appeal No. 133/2002 filed by the 1st Respondent in the High Court shall
stand dismissed.
65.
Parties will bear their own costs.
...................................J. (Altamas Kabir)
....................................J. (Cyriac Joseph)
...................................J.
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