Civil Appeal No 881 of 1974 From the Judgment and order dated 2571973 of the Andhra Pradesh High Court in Writ Petition No  3950 of 1971
K Raj
Choudhary for the Appellant
VC Mahajan CVS Rao and RP Srivastava for the Respondents
The Judgment of the Court was delivered by VENKATACHALIAH J
This appeal by Special Leave by the Andhra Pradesh State Electricity Board a corporation and constituted under The Electricity Supply Act 1948 arises out of the Judgment and order dated 2571973 of the Andhra Pradesh High Court in Writ Petition No 3950 of 1971 on its file rejecting appellant s challenge to certain proceedings for the recovery of insurance premia respecting the appellant s undertaking under the Emergency Risks Factories Insurance Act 1962  Act  culminating in the appellate order dated 1251971 of the Central Government under Section 113 of the Act affirming in turn that dated 15101969 of the Director of Emergency Risks Insurance Schemes determining the balance of the premia payable at Rs475910900
The scheme under the Act which came into force on 111963 lapsed with the termination of the emergency on 1011968
The legislation was to meet the need to provide for expeditious rehabilitation of industrial undertakings in the event of damage in times of war and the Central Government accordingly undertook to insure the factories against such war risks and to indemnify the owners in respect of loss and damage caused by enemy action so that there might be an expeditious industrial rehabilitation so vital in national interests
Sub section 3 of the Act envisages the promulgation and effectuation of the Emergency Risks Factories Insurance Scheme mandating a compulsory insurance of factories against war risks and the payment of premia in terms of and in accordance with the scheme
The Director of the Emergency Risks Insurance Scheme caused a show cause notice dated 28111968 to be issued to the appellant calling upon it as to why the balance of premia for the 219 relevant periods should not be fixed at Rs475910900 as against a much smaller sum indicated by appellant as its liability in that behalf
The cause shown by the appellant by its representation dated 2411969 against the proposed addition not having commended itself to the Director the latter by his order dated 15101969 over ruling objections of the appellant determined that a sum of Rs475910900 was due and recoverable from the appellant by way of balance of premia
Against this determination appellant carried up under Section 113 of the Act an appeal before the Central Government
The Central Government after affording an opportunity to the appellant of being heard and on a consideration of the merits dismissed the appeal by its order dated 1251971
The legality of the proceedings so culminating in the said appellate order was assailed in the Writ Petition before the High Court
We have heard Shri K Rajendra Choudhary learned counsel for the appellant and Shri VC Mahajan learned senior counsel for the Union of India respondent in the appeal
The contentions urged by Shri Choudhary in support of the appeal are substantially on the lines of those raised and urged before the High Court
They admit of being formulated thus a That the Distribution and Transmission lines cannot be said to fall within the concept of Factory  and in quantifying the extent and value of the insurable property the High Court fell into an error in including the value of the Distribution and Transmission lines b That in ascertaining the value of the insurable property depreciation had had to be granted under the relevant provisions of the Income Tax Act 1922 and that the limiting of the depreciation to that under the relevant schedules to The Electricity Supply Act 1943 was erroneous
c That the Act  was itself a piece of temporary legislation which lapsed on 1011968 and that the proceedings by the Director initiated as they have come to be pursuant to show cause notice dated 28111968 subsequent to the date of expiry of the statute itself was without the authority of law
220 d That substantial portions of the insurable properties came to vest in the Appellant Board on dates subsequent to 1111963 and that the appellant in respect of those assets was not liable to premia as appellant had not become the legal owner of those assets
We shall now proceed to examine the merits of these contentions seriatim 
Re Contention a The argument is that The Distribution and Transmission Lines did not constitute Factory  and therefore their value was not includible in the concept of insurable property  under the Act 
The fallacy in this argument lies in that it overlooks the definition of the words property insurable under this Act and also the specific language of Section 171 of the Act
The argument also over looks the express provisions of the statutory scheme  put into operation
Section 21 of the Act  which defines property insurable under the Act inter alia enables the inclusion of Such other plant machinery or material as may be specified in the Scheme also
 That apart Section 171 of the Act  enables the Central Government by notification to declare that provisions of the Act  and of the scheme promulgated thereunder shall apply to insuring of the various classes of assets specified in clauses a to d of that section
Clause d of Sub section  1 of Section 17 refers to  
The whole or a specified part of the distribution and transmission systems sub stations switch houses and transformer houses of electric supply undertakings generally or specified electric undertaking The scheme  prepared and promulgated by Notification SO 3947 which came into force with effect from 111963 provides among other things that the whole of the Distribution and Transmission Systems sub stations switch houses transformer houses etc
shall constitute insurable property and that the Act  and the scheme shall be applied to them
221 6
It is thus clear that the inhibitions of the limited import of the expression Factory  do not limit the identity of the insurable property  which will have to be ascertained and determined in accordance with the provisions of the scheme
The view of the High Court is in our opinion fully justified
There is no merit in this contention
Contention a is accordingly held against the appellant
Re Contention b In determining the value of the insurable property the scheme by its clause 7 envisages due allowance for the depreciation being made
The question is whether depreciation allowed in accordance with the schedules to the  in preference to the rates of depreciation provided for in the Indian Income Tax Act 1922 claimed by the appellant is incorrect in principle
The High Court noticed that the provisions of the  related to the electricity undertakings themselves and that further appellant had itself made up its books in regard to valuation of various properties assets etc
adopting the depreciation based on the provisions of the 
The argument of Shri Rajendra Choudhary learned counsel is that where two alternative bases for the determination of the depreciation were available appellant was entitled to opt for the more beneficial and less disadvantageous of the two
There is again a fallacy in this approach
The Act  or the Scheme  does not specify any bases for the computation of depreciation
It would appear that there were some administrative instructions to the effect that wherever the matter was governed by specific statutory provisions those provisions be applied and wherever statutory provisions regulating the matter were not available then the provisions of the Income Tax Act be taken into account
These instructions have no statutory force
But even to the extent they go it was not as if two alternative methods were open
Indeed the two methods were mutually exclusive and not alternative
That apart the provisions as to depreciation in a taxing law like the Income Tax Act contain elements of incentives and are also informed by considerations of policy of the tax and do not reflect purely economic criteria relevant to the determination of the depreciation
The High Court on the point held 
When once it is found that the Electricity Board Supply Act itself provides a formula for working out the 222 allowance of depreciation and the Electricity Board has been adopting that formula and writing down the allowance of depreciation in its books we fail to see how if that method is taken into account it can be said to be inconsistent with clause 7 of the Insurance Scheme
Both the Tribunals therefore in our opinion rightly accepted that as the allowance for depreciation and permitted the same
The contention that the statutory depreciation should have been disregarded and instead the depreciation worked out under the Income Tax Act should have been made applicable has no force because no rule or provision of law sustains any such contention   There is no error in principle committed by the High Court in applying the principles contained in the schedules to the 
We do not find legal support for the insistence by the appellant on the adoption of the standards of depreciation contained in the provisions of Income Tax Act 1922
The finding of the High Court in this behalf does not also call for interference
Contention b is also accordingly answered against the appellant
Re Contention c The assumption basic to the argument is that the Act  is a temporary statute which expired by efflux of time on 1011968 and that the proceedings subsequently commenced on 29111968 were without jurisdiction
Section 6 of the general clauses Act is held in applicable to a case of expiry of a temporary statute on the view that Section 6 is attracted wherever there is a repeal and that the case of expiry of a statute by efflux of time is not a case of repeal
Whatever be the principles of construction of temporary statutes and the effect on the rights and obligations under them of the expiry of the statute itself the Act  in the present case contains specific provisions preserving the rights and obligations
The Act  invokes the provisions of Section 6 of the General Clauses Act
The matter is placed beyond controversy by the pronouncement of this court in Amadalavalasa Cooperative Agricultural  Industrial Society Ltd  Anr
vs Union of India  Anr
 See  at 738 
Therefore if under section 5 of the Factories Act  or under section 7 of the Goods Act  the liability to pay the premia on full insurable value was incurred before the expiry 223 of the Act section 6 of the General Clauses Act would enable the ascertainment of the extent of liability for the evaded premia by an officer who was authorised when the Act was in force or by an officer authorised after the expiry of the Act
The principle behind section 6 of the General Clauses Act is that all the provisions of the Acts would continue in force for purposes of enforcing the liability incurred when the Acts were in force and any investigation legal proceeding remedy may be instituted continued or enforced as if the Acts had not expired   Contention c is accordingly also held and answered against the appellant
Re Contention d The argument is that though the Appellant Board was constituted on 141959 the properties of the erstwhile electricity undertaking of the State Government were transferred to and became the property of the Appellant Board by notifications issued on various dates subsequent to 1111963 and that accordingly during the relevant periods during which the legal ownership of the property did not vest in the appellant it was not liable for the premia
It is relevant to mention here that the period for which the demands were raised was between 111963 and 10 11968
Appellant s contention in this behalf was repelled in the statutory appeal on the ground that though formally the notifications came to be issued on various dates subsequent to 141959 the assets had in fact been transferred to and were acknowledged and treated by the appellant as its own in its Balance Sheets
Before the authorities it would appear this point had not been seriously disputed by the appellant
In a letter dated 2411969 the Secretary of the Appellant Board wrote to the Director 
We may mention that we are accepting your stand that the properties transferred to the Board by the Government become the properties of the Board as and from the dates of original transfer   The Director in his order dated 15101969 observed 224 
The assets had in fact been transferred by the State Government to the Board from the 1st April 1959 and the same had been shown as their own assets by the Board is their balance sheets since then
If for certain reasons the State Government issued the notifications long after the expiry of the two months period ie on 5101964 28101966 and 14121966 etc
it was only a sort of formality particularly in view of the fact that the said notifications referred to the assets as having been transferred to the Board as on 141959
The Board correctly became owner of such assets right from 141959
This point was conceded by the Board in its letter dated 24th January 1969 and was also not pressed in the discussions that I had with them on the 26th and 27th July 1969
underlining supplied In view of this nothing survives of contention d either
It is accordingly held against the appellant
In the result for the foregoing reasons this appeal fails and is dismissed
In the circumstances of the case the parties are how ever left to bear and pay their own costs in the appeal
RSS Appeal dismissed


Summary:
The President of India by order dated July 25 1981 accorded sanction to treat all employees of canteens established ia Defence Industrial Installations under section 46 of the  as Government employees
The order was given effect from 22121980
The petitioners were working in the canteens of the three Defence establishments at Kanpur forming part of the Defence Department of the Union of India
On their retirement after 22101980 the petitioners claimed that the period of service rendered by them prior to 22101980 canteens be counted towards their qualifying service for the purposes of pension
Their claim was not accepted
The respondents  contention was that prior to 22101980 the canteens in Ordnance factories were supervised and controlled by the Canteen Managing Committee consisting of equal number of elected representatives of the factory workers and nominees of management and these Committees were the appointing authority of the Canteen workers and paid their salaries
Allowing the petitions it was HELD 1 It was admitted by the respondents that by the letter dated 2451965 of the Ministry of Defence provision had been made for subsidising the canteens maintained in Defence Industrial Installations under section 4th of the Act
The letter also contained directions regarding pay scales conditions of service etc
of the employees
The cost of supervisory and clerical staff and cooks etc
was to be reimbursed by the Government and the canteen buildings formed part of the industrial establishment concerned
595A B 2 The expression occupier  of a factory is defined in section 2 n of the as the person who has ultimate control over the affairs of the factory
Under PG NO 590 PG NO 591 cause iii of section 2n in the case of a factory owned or controlled by the Central Government the person or persons appointed to manage the affairs of the factory by the Central Government shall be deemed to be the occupier
596CF 3 A canteen is an integral part of the Defence establishment belonging to the Union of India
There cannot be a canteen without sufficient number of workers working in the canteen
They have to be appointed by the occupier
Otherwise he would not be fully complying with section 46 of the 
The Managing Committee cannot be the employer of those workmen in the true sense of the terms
The Managing Committee constituted under section 46 of the Act which is not an incorporated body and whose financial position is un certain cannot be considered to be the employer who has to bear the legal responsibilities under the several labour laws in force in India
597C D 4 The basic requirements of the canteen such as Buildings utensils crockery cutlery furniture etc
are to be supplied by the occupier
597B C 5 In this situation it is difficult to hold that the employees in canteens established under section 46 of the Act would not be employees of the occupier even though for purposes of management a Canteen Managing Committee whose functions are advisory has to be constituted under the Rules
l597F 6 It is also not shown that the workers in the canteens becoming the Government employees on 22101980
They were paid by the previous management namely the Managing Committee constituted under rule 68 of the UP Factories Rules 1950 any compensation in lieu of services rendered by them prior to 22101980
597F G 7 It is therefore difficult to hold that the employees working in such canteens were not employees of the factories in which the canteen had been established
If they are employees of the factories in which the canteen is established the service rendered by them in these factories should be counted as part of the qualifying service for pension
597G H