Civil Appeal No 1330 of 1969 Appeal by special leave from the Award dated the 5th March 1969 of that Fifth Industrial Tribunal
West Bengal in Case No 26 of 1967
V section Desai and R B Dater for the appellant
A K San and Sukumar Ghose for respondent No 1
C The Judgment of the Court was delivered by UNTWALIA J
This is an appeal by special leave filed by Hindustan Aeronautics Ltd from the award dated 8 3 1969 made by the Fifth Industrial Tribunal West Bengal
The Governor of West Bengal made the reference under section 101 of the Industrial Disputes Act 1947 hereinafter called the Act for adjudication on the following 5 issues 1 Allowance for the education of employees  children 2 House Building loan 3 Free conveyance or conveyance allowance 4 Revision of Lunch allowance 5 Whether the following canteen employees should be made permanent the names of 10 employees given
The Tribunal granted no relief to the workmen on issues 2 and 3 allowed their claim in part in respect of issues 1 4 and section Feeling aggrieved by the said award the appellant which is a Government company constituted under section 617 of the Companies Act the shares of which are entirely owned by the Central Government has filed this appeal
The dispute relates to about 1000 workmen working at the Barrackpore West Bengal branch of the Company s repairing workshop represented by the Hindustan Aeronautics Workers  Union Barrackpore
The competency of the Government of West Bengal to make the reference was challenged before the Tribunal as also here
Mr V section Desai learned counsel for the appellant submitted that the appropriate government within the meaning of section 2a of the Act competent to make the reference was the Central Government or if a State Government it was the Government of Karnataka where the Bangalore Divisional office of the Company is situated and under which works the Barrackpore branch
Counsel stressed the point that the Central 233 Government owned the entire bundle of shares in the company
It appoints and removes the Board of Directors as well as the Chairman and the Managing Director
All matters of importance are reserved for the decision of the President of India and ultimately executed ill accordance with his directions
The memorandum and articles of association of the company unmistakably point out the vital role and control of the Central Government in the matter of carrying on of the industry owned by the appellant
Hence counsel submitted that the industrial dispute in question concerned an industry which was carried on under the authority of the Central Government within the meaning of section 2a i of the Act and the Central Government was the only appropriate Government to make the reference under section 10
The submission so made was identical to the one made before and repelled by this Court in the case of Heavy Engineering Mazdoor Union vs The State of Bihar  ors1 wherein it has been said at page 1000 It is true that besides the Central Government having contributed the entire share capital extensive powers are conferred on it including the power to give directions as to how the company should function the power to appoint directorsand even the power to determine the wages and salaries payable by the company to its employees
But these powers are derived from the company s memorandum of association and the articles of association and not by reason of the company being the agent of the Central Government
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 v Public Works commissioners 1901 2 KB 781 where Phillimore J said that the Crown does in certain cases establish with the consent of Parliament certain officials or hodies 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 balefully 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 vs The Commercial Tax officer
Visakhapatnam 1964 4 SCR 99 at 188 per Shah J and Tamlin vs Hannaford 19501 KB 18 at 25 26
Such an inference that the corporation is the agent of the Government may be drawn where it is performing in substance govern mental and not commercial functions
London Country 234 Territorial and Auxiliary Forces Association vs Michale Mr Desai made a futile and unsubstantial attempt to distinguish the case of Heavy Engineering Mazdoor Union on the ground that was the case of a Government company carrying on an industry where Private Sector
Undertakings were also operating It was not an industry as in the instant case which the Government alone was entitled to carry on to the exception of the private operators
The distinction so made is of no consequence and does not affect the ratio of the case in the least We may also add that by amendments in the definition of appropriate Government in section 2ai from time to time certain statutory corporations were incorporated in the definition to make the Central Government an appropriate Government in relation to the industry carried on by them
But no public company even if the shares were exclusively owned by the Government was attempted to be roped in the said definition
The other leg of the argument to challenge the competency of the West Bengal Government to make the reference is also fruitless
It may be assumed that the Barrackpore branch was under the control of the Bangalore division of the company
Yet it was a separate branch engaged in an industry of repairs of air crafts or the like at Barrackpore
For the purpose of the Act and on the facts of this case the Barrackpore branch was an industry carried on by the company as a separate unit
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
The facts of the case of Ms Lipton Limited and another vs Their employees1 cited on behalf of the appellant are clearly distinguishable
The ratio of that case was pressed into service in vain on behalf of the appellant
The first demand on behalf of the workmen as respects the education allowance of the children was chiefly based upon the educational facilities said to be available to the workmen of Bangalore
On behalf of the management it was pointed out that certain educational facilities were given to the employees living in the township of Bangalore out not in the city of Bangalore
The workmen working at Barrackpore had also been provided with certain educational facilities
We however do not propose to go into the merits of the rival contentions
In our opinion the award directing the company 235 to pay Rs 12 per month to each employee to meet educational expenses of their children irrespective of the number of children a particular workman may have is beyond the scope of the issue referred for adjudication
The Tribunal while discussing this issue felt constrained to think that strictly speaking claim for allowance for the education of employees  children could not form a subject matter of industry
dispute
Really it was a matter to be taken into consideration at the time of fixing their wages
In substance and in effect the directions given by the Tribunal is by way of revision of the pay structure of the Barrackpore employees
No such reference was either asked for or made
The Tribunal therefore had no jurisdiction to change the wage structure in the garb of allowing educational expenses for the employees  children
We may add that on behalf of the appellant it was stated before us that the latest revised wage structure has taken the matter of education of the employees  children into consideration while Mr A K San appearing for the workmen did not accept it to be so
If necessary and advisable a proper industrial 1 dispute may be raised in that regard in future but the award as it stands cannot be upheld
Apropos issue No 4 it was stated on behalf of the appellant that all staff and not only the supervisory staff were getting Rs 150 as lunch allowance under circumstances similar to the ones under which the employees belonging to the supervisory staff were getting Rs 150 as lunch allowance
The award of the tribunal therefore was unnecessary and superfluous in that regard
If that be so the award may be a surplusage as it is conceded on behalf of the appellant that under the existing service conditions every employee eligible to get a lunch allowance was getting at the rate of Rs 150 
The 10 workmen sought to be made permanent under issue No 5 were casual workmen before 4 1 1967 within the meaning of clause b d of Standing order I headed Classification of workmen
They were appointed as temporary workmen within the meaning of clause bb of Standing order I on and from 4 1 1967
The Tribunal s direction to make them permanent on and from 411968 treating them as probationers appointed in permanent vacancies was not justified
The Tribunal did not go into the question as to whether more permanent workmen were necessary to be appointed in the canteen over and above the existing permanent strength to justify the making of the of workmen as permanent in the canteen where they II were working
No direction of creation of new posts was given
the evidence as adduced before tic Tribunal and on the basis of the 236 findings recorded by it it is plain that the 10 workmen or ally of them could be made permanent only against the permanent vacancies and not otherwise
On behalf of the appellant it was stated before us that all of them have been made permanent against such vacancies while on behalf of the workmen the assertion was that none of them has been made permanent so far
The management has no objection 13 in absorbing the 10 workmen concerned in permanent vacancies as and when they occur if any of the has not been already absorbed
The workmen want nothing more than this
In the result the appeal is allowed and substantially the award of the Tribunal is set aside but subject to the clarifications and observations made above
In the circumstances there will be no order as to costs
VPS Appeal allowed


Summary:
The Government of West Bengal referred under section 101 of the  five issued for adjudication by the Industrial Tribunal
The dispute was between the respondents workmen working at the Barkeeper branch of the appellant company s workshop
All the shares of the appellant are owned by the Central Government
and its Memorandum and Articles of Association point out the vital role and control of the Central Government in the matter et carrying on of the industry
The Tribunal granted relief with respect to three issues
In appeal to this Court the competency of the Government to make the reference was challenged on the ground that the appropriate Government to make the reference was either the Central Government because the industry was under the authority of the Central Government or the State of Karnataka since the works of the Barkeeper branch is under the Banglore Divisional office of the Company
Rejecting the contention but allowing the appeal to this Court on merits  HELD l a the submission regarding the competency of the Central Government is identical to the one made before this Court and repelled by this Court in the case of Heavy Engineering Mazdoor Union vs The Sate of Bihar 233C b The fact that the Government company in the Heavy Engineering Mazdoor Union ease was carrying on an industry where Private Sector Undertakings were also operating whereas in the instant case the Government alone was entitled to carry on to the exclusion of private operators
would not make any difference
234B c The definition of appropriate Government in section 2a1 of the his been amended from time to time and certain statutory corporations were incorporated in the definition to make the Central Government the appropriate Government  in relation to the industry carried on by them
But no public company even if the shares were exclusively owned by the Government was brought within the definition
234C 2 Assuming that the Barkeeper branch was under the control of the Bangalore Division of the Company it was a separate branch working as a separate unit
The workers were receiving their pay at Barkeeper were under the control of the officers of the Company stationed there their grievances were their own and the cause of action in relation to the industrial dispute arose there
If there was any disturbance of industrial peace at Barrackpore the appropriate Government concerned in its maintenance was the West Bengal Government 234D F Ms Lipton Limited and another vs Their employees  distinguished
3 On the first issue relating to allowance for the education l employees  children the Tribunal directed the appellant to pay Rs 12 per month to each employees to meet the educational expenses of his children
This direction is in elect a revision of the pay structure of the Barrackpore employees and the Tribunal had no jurisdiction to change the ware structure in the garb of allowing educational expenses 235A C 232 4 On the issue regarding revision of lunch allowance the award of the Tribunal was unnecessary because all members of the staff were getting such lunch allowance
235E F 5 As regards the directions of the Tribunal that certain canteen employees should be made permanent
it was not justified because those workman were casual workmen appointed temporarily
The workmen could be made permanent only against permanent vacancies and not otherwise and there was no direction by the Tribunal for the creation of any new post
235 H