Civil Appeal No 3796 of 1984
Appeal by Special leave from the Judgment and Order dated the 24th  27th of September 1982 of the Karnataka High Court in WP No 1089 of 1981
VC Mahajan RN Foddar  NS Das Behi for the Appellant
AK Goel for the Respondent
The Judgment of the Court was delivered by VENKATARAMIAH J
The question for consideration in this appeal by Special Leave is whether the Government of a State can be treated as the appropriate Government  under section 2a of the hereinafter referred to as the Act  in relation to any industrial dispute concerning the office of the Regional Provident Fund organisation established by the Central Government for that State under the hereinafter referred to as the Provident Funds Act 
The facts of the case are these The Government of Karnataka made a reference under section 10 of the Act referring a certain dispute between the Regional Provident Fund organisation established under the Provident Funds Act for the State of Karnataka and its employees to the Additional Industrial Tribunal Bangalore and the said reference came to be registered as AID 3 of 1979 on the file of the Tribunal
Before the Tribunal the Regional Provident Fund organisation raised among other pleas two preliminary objections to the reference viz that the activity carried on by the management was not an industry and that the State Government was not the appropriate Government under the Act in relation to the dispute between it and its employees
The Tribunal took up for consideration the two issues arising out of the above two objections first and after hearing the management and the workmen negatived both the contentions of the management
819 It held that the business carried on by the Regional Provident Fund Organisation was an industry and that the State Government was the appropriate Government under the Act
Aggrieved by the above findings of the Tribunal the management filed a writ petition under Article 226 of the Constitution before the High Court of Karnataka questioning the correctness of the said findings
Before the learned Single Judge who heard the writ petition the management did not however press its case as regards the finding that the Provident Fund organisation was an industry
The only contention urged by it was that the State Government being not the appropriate Government under the Act in so far as the dispute was concerned it could not refer the dispute under section 10 of the Act
The learned Single Judge accepting the said contention of the management quashed the reference
Aggrieved by the decision of the learned Single Judge the workmen filed an appeal before the Division Bench of the High Court
The Division Bench reversed the decision of the learned Single Judge and held that the State Government was the appropriate Government for purposes of the dispute in question
The management has filed this appeal after observing the leave of this Court under Article 136 of the Constitution against the judgment of the Division Bench
Under section 10 the Act where the appropriate Government is of opinion that any industrial dispute exists or apprehended it may at any time by order in writing refer the dispute or any matter appearing to be connected with or relevant to the dispute whether it relates to any matter specified in the Second Schedule or the Third Schedule to the Act to Tribunal for adjudication
Section 2a of the Act defines the expression appropriate Government  as in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or by the industries specified in clause i of section 2a of the Act the Central Government and in relation to any other industrial dispute the State Government
It may be stated here that the organisation under the Provident Funds Act was not one of the industries specified in section 2ai of the Act when the reference was made in this case
The contention of the management is that the industry in question falls under section 2ai of the Act as it is an industry carried on under the authority of the Central Government and hence the Central Government alone can act as the appropriate Government in relation to a dispute concerning it
820 Entry 24 of the concurrent List in the Seventh Schedule to the Constitution specifically refers to the subject employees  provident funds 
The Central Government could have if it intended to do so started a provident funds scheme for the benefit of the workers in exercise of its executive power
Before any such action was taken the subject of legislation for instituting compulsorily contributory funds in industrial undertakings was discussed several times at tripartite meetings in which representatives of the Central and State Governments and of employers and workers took part
Ultimately it was decided that the Central Government should initiate appropriate legislation in Parliament for the said purpose
Accordingly an ordinance was issued in 1951 incorporating the decisions arrived at such meetings
Later on in 1952 the Provident Funds Act came to be passed replacing the ordinance
The Provident Funds Act contemplates the administration of the Scheme framed under section 5 the Family Pension Scheme framed under section 6A and the Employees  Deposit linked Insurance Scheme under section 6C1 of that Act
The Provident Funds Act applies to the whole of India except the State of Jammu and Kashmir
Under section 5A of the Provident Funds Act the Central Board of Trustees hereinafter called the Central Board  is constituted by the Central Government to administer subject to the provisions of section 6A and section 6C the fund vested in it in such manner as may be specified in the Scheme and to perform such other functions as it may be required to perform by or under the provisions of the Scheme the Family Pension Scheme and the Insurance Scheme
Under section 5B of the Provident Funds Act the Central Government may after consultation with the Government of any State by notification in the Official Gazette constitute for that State a Board of Trustees which is for purpose of brevity referred to as the State Board in such manner as may be provided for in the Scheme
The crucial provision in section 5B which if we may say so with respect has missed the attention of the Division Bench of the High Court is sub section 2 thereof
It says that a State Board shall exercise such powers and perform such duties as the Central Government may assign to it from time to time
Under Paragraph 4 of the Scheme framed under the Provident Funds Act it is provided that until such time as a State Board is constituted for a State the Central Government may set up a Regional Committee for the State which will function under the Central Board
There are three funds which are created by the Provident Funds Act
They are i The Fund ie the Provident Fund 821 established under the Scheme ii the Family Pension Fund established under the Family Pension Scheme and iii the Insurance Fund established under the Insurance Scheme
They are not confined to ans particular State or Region
Each of them is a fund into which the amount collected under the respective Schemes is credited irrespective of the State or the Region where they are collected
Under Paragraph 54 of the Scheme all expenses relating to the administration of the fund including those incurred on Regional Committees have to be met from the Fund
For purposes of the administration of the provident Funds Act the appropriate Government in relation to an establishment belonging to or under the control of the Central Government or in relation to an establishment connected with a railway company a major port a mine or an oil field or a controlled industry or in relation to an establishment having department or branches in more than one State is the Central Government and in relation to any other establishment the State Government under section 2a of the Provident Funds Act
We are not concerned with this definition in this case as the question to be decided arises under the Act
The Provident Funds Act and the Scheme clearly show that the Central Government has the final voice in many matters including appointments to various offices referred to therein
It is not necessary to refer to then in detail here
What has got to be determined in this case is whether the activity carried on under the Provident Funds Act is being carried on by or under the authority of the Central Government as provided in section 2a of the Act or not in order to decide whether the Central Government is the appropriate authority under the Act or not
Section 2a of the Act came up for consideration by this Court in Heavy Engineering Mazdoor Union vs State of Bihar  Ors
  The Court observed in that case that there being nothing to the contrary the word authority  in section 2a of the Act 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
The words under the authority of  were construed by this Court in that case as meaning pursuant to the authority such as where an agent or a servant acts under or pursuant to the authority of his principal or master
Applying this test the Court held that a manufacturing industry carried on by a company registered under 822 the authority of the Central Government even though the entire capital of the company had been contributed by the Central Government and under Articles of Association of the company the Central Government could exercise control over the affairs of the company
The Court however proceeded to observe that the question whether a corporation is an agent of the State would depend upon the facts of each case
It referred to the decision in Graham vs Public Works Commissioner1 and said that where a statute setting up a Corporation so provided such a Corporation could be easily identified as the agent of the State and that it was possible for the Crown with the consent of Parliament to appoint or establish certain officials or bodies who were to be treated as agents of the Crown even though they had the power of contracting as principals
Merely because the officials of Government or certain bodies constituted by the Government for purposes of administration are given the garb of a statutory corporation they do not cease to be what they truly are
At this stage it is appropriate to refer to certain observations made by Mathew J in Sukhdev Singh  Ors
vs Bhagatram Sardar Singh Raghuvanshi  Anr2 on the true characteristics of public corporations established under a statute
The learned Judge observed at page 646 thus A public corporation is a legal entity established normally by Parliament and always under legal authority usually in the form of a special statute charged with the duty of carrying out specified governmental functions in the national interest those functions being confined to a comparatively restricted field and subjected to control by the executive while the corporation remains juristically an independent entity not directly responsible to parliament
A public corporation is not generally a multi purpose authority but a functional organisation created for a specific purpose
It has generally no shares or shareholders
Its responsibility generally is to Government
Its administration is in the hands of a Board appointed by the competent Minister
The employees of public corporation are not civil servants
It is in fact 823 likely that in due course a special type of training for specialized form of public service will be developed and the status of the personnel of public corporation may more and more closely approximate to that of civil service without forming part of it
In so far as public corporations fulfil public tasks on behalf government they are public authorities and as such subject to control by government In the instant case it is to be noted that the activity carried on by the Central Board or the State Boards under the Provident Funds Act is not similar to the activity carried on by any private trade or manufacturing business like the one involved in the case of the Heavy Engineering Corporation s case supra
The activity is one traceable to Article 43 of the Constitution which requires the State to endeavour to secure by suitable legislation or economic organisation or in any other way to all workers agricultural or industrial or otherwise work a living wage conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities
It is a part of the programme of every welfare State which our country is
Institutions engaged in matters of such high public interest or performing such high public functions as observed by Mathew J in Sukhdev Singh s case supra by virtue of their very nature performed governmental functions
They are truly the agents of the Government and they function under the authority of the Government as provided in the statute because the Central Government could have for the purpose of introducing the scheme of compulsory contribution to the provident fund set up an organisation or a department in absence of the corporate bodies evisaged in the Provident Funds Act
The Division Bench of the High Court was in error in observating that an examination of the organisation showed that the activities of the Provident Fund organisation are not governmental in character as they are essentially part of the activities of various industries to which the Provident Funds Act applies
 We have no doubt that the business of the Provident Funds organisation is governmental in character and does not pertain to industry to which the Provident Funds Act applies
The management and workmen of industries to which the Provident Funds Act applies contribute to the funds established under that Act
The business of the statutory bodies functioning under that Act is not the business of industries whose managements and workmen 824 make contributions to the said funds
In addition to the above feature the provisions of section 5B 2 of the Provident Funds Act which reads A State Board shall exercise such powers and perform such duties as the Central Government may assign to it from time to time clearly envisage that the State Board is an agent of the Central Government
In the absence of the State Board the Regional Committee constituted under Paragraph 4 of the Scheme is required to function under the control of the Central Board
The Regional Provident Fund Commissioner who is appointed by the Central Government is also under the control of the Central Board and the Central Government
Having regard to the various provisions of the Provisions Funds Act and the nature of the business carried on by the Central Board the State Board the Regional Committee and the Regional Provident Fund Commissioner we are of the view that the Division Bench of the High Court was not right in holding that the State Government was the appropriate Govt
under section 2a of the Act in the matter of industrial disputes arising between the management and the workmen of the Regional Provident Fund organisation
It has to be mentioned here that even the learned counsel for the workmen fairly stated that the Central Government was appropriate Government under the Act in so far as the dispute in question is concerned He however submitted that the Central Government may now be directed to refer the dispute pending before the Tribunal at Bangalore to an Industrial Tribunal quickly as the case has been pending for nearly 5 years
We have no doubt that the Central Government will immediately consider the above question and take appropriate action
In the result the order of the Division Bench of the High Court is set aside and the order of the learned Single Judge is restored
The reference made by the State Government is quashed
The appeal is accordingly allowed
No costs
HSK Appeal allowed


Summary:
The Government of Karnataka State made a reference under section 10 of the hereinafter referred to as the Act  referring Certain dispute between the Regional Provident Fund Organisation established by the Central Government for that State under the Employees  Provident Fund  Miscellaneous Provisions Act 1952 and its employees to the Industrial Tribunal
The Regional Provident Fund Organisation raised two preliminary objections viz that the activity carried on by the management was not an industry and that the State Government was not the appropriate Government under the Act in relation to the dispute between it and its employees
The Tribunal negatived both the contentions
The management filed a writ petition under Article 226 of the Constitution before the High Court
The only contention urged by the management was that the State Government being not the appropriate Government under the Act is for as the dispute was concerned it could not refer the dispute under section 10 of the Act
A single Judge accepted the contention
In appeal filed by the workmen
a Division Bench of the High Court held that the State Government was the appropriate Government for purposes of the dispute in question
Hence this appeal by the management by special leave against the judgment of the Division Bench
The management contended that the industry in question fell under section 2 a i of the Act as it was an industry carried on under the authority of the Central Government and hence the Central Government alone could act as the appropriate Government in relation to the dispute concerned
817 Allowing the Appeal  HELD In order to decide whether the Central Government is the appropriate Government under the Act or not in this case it has got to be determined whether the activity carried on under the Provident Funds Act is being carried on by or under the authority of the Central Government as provided in section 2 a of the Act
The word authority in section 2a of the Act 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
The words under the authority of  means pursuant to the authority such as whether the agent or the servant act under or pursuant to the authority of his principal or master821F H Heavy Engineering Mazdoor Union vs The State of Bihar  Ors  Graham vs Public Works Commissioner and Sukhdev Singh  Ors
vs Bhagatram Sardar Singh Raghuvanshi  Anr 1975 3 SCR 619 referred to
In the instant case the activity carried on by the Central Board or the State Boards under the Provident Funds Act is one traceable to Article 43 of the constitution which requires the State to endeavour to secure by suitable legislation or economic organisation or in any other way to all workers agricultural or industrial or otherwise work a living wage conditions of work ensuring a decent standard of life and full enjoyment of leisure and cultural opportunities
It is a part of the programme of every welfare State which our country is
Institutions engaged in matters of such high public interest or performing such high public functions by virtue of their very nature performed governmental functions
They are truly the agents of the Government and they function under the authority of the Government as provided in the statute because the Central Government could have for the purpose of introducing the scheme of compulsory contribution to the Provident fund set up an organisation or a department in the absence of the corporate bodies envisaged in the Provident Funds Act
823C F The provisions of section 5B 2 of the Provident Funds Act which reads A State Board shall exercise such powers and perform such duties as the Central Government may assign to it from time to time clearly envisage that the State Board is an agent of the Central Government
In the absence of the State Board the Regional Committee constitute under Paragraph 4 of the Scheme is required to function under the control of the Central Board
The Regional Provident Fund Commissioner who is appointed by the Central Government is also under the control of the Central Board and the Central Government
824B C Having regard to the various of the Provident Funds Act and the nature of the business carried on by the Central Board the State Board the Regional Committee and the Regional Provident Fund Commissioner this Court is of the view that the Division Bench of the High Court was not right in holding that the State Government was the appropriate Government under 818 section 2 a of the Act in the matter of industrial disputes arising between the management and the workmen of the Regional Provident Fund organisation
854D E