SAKHRULLAH KHAN Vs. STATE INDUSTRIAL COURT

JUDGEMENT

(1.) THE petitioner Sakhrullah Khan was employed as a driver by the Heavy Electricals (India) Ltd., Bhopal, which is a Government Company. On 12th April 1966, the petitioner met with an accident while he was working in the Factory. A wooden box fell on the toe of the petitioner's right foot with the result that the toe was injured. The petitioner was given first aid in the medical block of the factory. The petitioner was then removed on the same day to the Company's hospital at Govindpura. The Medical Officer of the Company's hospital found that the injury was minor and advised rest for one day. The petitioner next day, i.e. on 13th April, went to his residence in the city of Bhopal. The petitioner absented from duty till 31st May 1966. The petitioner applied for joining duty on 1st June 1956, but he was not permitted to do so. The petitioner was served with an order of the same date that in accordance with Standing Order 42 (10) it was presumed that he terminated his service by his own conduct, i.e. by remaining absent for more than 30 days without leave. The petitioner was also asked by the same order to pay to the Company one month's notice -pay amounting to Rs. 197/ - for failure to give notice. The petitioner moved the Labour Court under the Madhya Pradesh Industrial Relations Act, 1960, challenging the termination of his employment. The Labour Court dismissed the petitioner's application by its order dated 18th Match 1971. The petitioner then filed a revision to the Industrial Court which was dismissed by order dated 24th April 1972. The petitioner then filed the present petition under Articles 226 and 227 of the Constitution for passing the orders of the Labour Court and Industrial Court.

(2.) STANDING Order 42 (10) under which the action was taken by the Company reads as follows: -

(3.) THE first argument in support of the aforesaid contention is that the Company is not an undertaking under the control of the Central Government and therefore after the enactment of the 1959 State Act, the Central Act ceased to be applicable to the Company on the subject of the standing orders and that for the same reason the amendment of the Central Act by Act 39 of 1963 had not the effect of making the 1961 State Act inapplicable to the Company. It is not disputed before us that the Company is not an undertaking carried on by or under the authority of the Central Government on this question the ruling of the Supreme Court in H.E.M. Union vs. State of Bihar, AIR 1970 SC 82 is clear and there is no scope for any doubt. The only controversy before us is whether the undertaking of the Company is an undertaking under the control of the Central Government. It is the admitted position that the Company is a Private Limited Company whose share capital is wholly subscribed by the Central Government. There are only three share -holders. The President of India holds three shares; the Joint Secretary, Department of Heavy Engineering, Ministry of Industry and Supply and the Additional Secretary, Ministry of Finance, each holds one share. The Articles of Association make it clear that the Chairman, Deputy Chairman, Resident Director etc. are all appointed by the President. The Central Government has also power of appointment of auditors and of giving directions in the matter of maintenance of account and audit. The articles enjoin upon the Chairman to reserve for the decision of the Central Government any proposal or decision of the Board of Directors which raises an important issue, and no decision on an important issue can be taken in absence of the Chairman appointed by the President. The articles further authorise the Central Government to give directions to the Company as to the exercise and performance of its functions in matters involving the national security or substantial public interest and to ensure that the Company gives effect to such directions. Above all, Article 116 of the Articles provides that the President may, from time to time, issue such directive as he may consider necessary in regard to the conduct of the business and affairs of the Company or Directors thereof and in like manner may vary and annul any such directive. It is further provided that the Directors shall give immediate effect to directives so issued. In face of the above provisions in the Articles it is difficult to accept the argument that the Company's undertaking is not under the control of the Central Government. It is clear that the President holds the shares in the Company not in his personal capacity but as head of the Central Government. Similarly, it is also clear that the Control vested in him under the Articles is in tile same capacity. In our opinion, full control of the Company's affairs is vested in the Central Government and so the Company's undertaking is under the control of the Central Government. in Learned counsel for the petitioner, however argues that the control vested the Central Government under the Articles is qua share -holder and not as Government and that such a control does not make the Company under the control of the Central Government in our opinion the word "control" as used in section 1(3) of the 1959 State Act or section 1(4) of the Central Act 20 of 1946 (as amended by Act 39 of 1963) must mean legal control irrespective of the source from or the capacity in which it arises. Looking at it from this point of view, there can be no doubt that the Company's undertaking is under the control of the Central Government. In Sindri Worker's Union vs. Labour Commr. AIR 1959 Patna 36, a Division Bench of the Patna High Court held that the Sindri Fertilizers and Chemicals Ltd., which is also a Government of India undertaking like the Company with which we are concerned here, was under the control of the Central Government within the meaning of that expression as used in section 2(b) of the Central Act 20 of 1946. It was observed that the test of finding out whether an industrial establishment is controlled by the Central Government is a realistic test namely, whether the Central Government has control over the industrial establishment under the Articles of Association in the case of a private limited company or by the provisions of the special statute in the case of a public corporation. We are in respectful agreement with this view which supports the conclusion reached by us above. In H.E.M. Union vs. State of Bihar (supra) the Supreme Court was dealing with the Heavy Engineering Corporation Limited, another Government of India undertaking. After referring to the extensive powers exercised by the Central Government, their Lordships observed that "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." These observations show that although the undertaking of the Company was not held to be carried on by or under the authority of the Central Government, it was held that the Company was under the control of the Central Government. This ruling thus also indirectly supports our conclusion.