Case: Nashik Workers Union Vs. Hindustan Aeronautics Limited

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. In para 42, the Constitution Bench examined the judgment of Hindustan Aeronautics Ltd. (supra) The Constitution Bench noted that the judgment in Heavy Engg. Mazdoor Union case (supra) 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. 24. It is also necessary to note here that the three-Judge Bench referred to HAL 1 (supra) and ruled thus:- In Hindustan Aeronautics (supra) 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 (supra) the fact that the authorised 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. 25. Thus, as is evident, in Tata Memorial Hospital Workers Union (supra) the Court had analysed the propositions in SAIL (supra) and opined that the same have to be seen in the background of the facts and 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. It is further ruled that industry or undertaking has to be carried under the authority of the Central Government or the State Government and that authority may be conferred either by a statute or by virtue of a relationship of principal and agent, or delegation of power. It has also been observed therein that when it comes conferring power by statute, there is not much difficulty, however, where it is not so, whether the undertaking is functioning under authority or not is a question of fact. 26. In the case at hand, the issue which arises for consideration is whether the decision in HAL 2 (supra) can be regarded as a binding precedent. As is noticeable, HAL 2 (supra) has not taken note of earlier decision in HAL 1 (supra). It has been clearly held in HAL 1 (supra) that regard being had to the dictionary clause of the ID Act for the purpose of Hindustan Aeronautics Limited, it is the State Government which has to make the reference. In HAL 2 (supra) the Court has referred to decision in SAILs case and opined that it is undisputed that Hindustan Aeronautics Limited is an undertaking of the Central Government and it is the Central Government which exercises full control over the same and, therefore, the appropriate Government is the Central Government. This analysis runs counter to HAL 1 (supra) and as well the ratio of the decision in SAILs case. On the contrary there is no discussion either on the facts or the law. It has been opined that the facts are undisputed. In HAL 1 (supra), the three-Judge Bench had referred to the decision in Heavy Engineering Mazdoor Union (supra). As has been held in Tata Memorial Hospital Workers Union (supra), the authority in Heavy Engineering Mazdoor Union (supra) has been approved in SAIL (supra) with some divergence. The authority in SAILs case, as the conclusion would show, covers two situations - the unamended provision and the amended provision. It does not disturb the principles stated in HAL 1 (supra). Thus, two aspects, first, the HAL 2 (supra) does not take note of HAL 1 (supra) and second, it proceeds on the basis of undisputed facts which are not stated. It is to be noted that there is nothing in the order in HAL 2 (supra) to suggest that Hindustan Aeronautics Limited is an agent of the Central Government. In our considered opinion, as HAL 2 (supra) has not noticed HAL 1 (supra) which has been approved in SAILs case, it cannot be considered as a binding precedent. Therefore, we hold that HAL 1 (supra) still holds good and lays down the correct law and we are bound by it as its foundation flows from Heavy Engineering Mazdoor Union (supra) which has been approved in SAIL (supra) with some divergence as has been stated in Tata Memorial Hospital Workers Union (supra). Be it stated, that divergence really does not affect the approval. We have no hesitation in our mind that HAL 2 (supra) cannot be regarded as a binding precedent. Ergo, it is clear that the Division Bench of the High Court has not applied the ratio in SAILs case correctly and, therefore, the entire anlaysis has to be held to be fallacious. 27. The controversy does not end there. It is perceptible that the High Court has not adverted to the merits of the case and dismissed L.P.A. No. 144 of 2002 on the ground that it did not survive after dismissal of L.P.A. No. 84 of 2006. As we have set aside the order passed in L.P.A. No. 84 of 2006 and opined that the appropriate Government in relation to the respondent company is the State Government, the matter has to be remitted to the High Court for fresh adjudication on merits. 28. Consequently, the

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]26. In the case at hand, the issue which arises for consideration is whether the decision in HAL 2 (supra) can be regarded as a binding precedent. As is noticeable, HAL 2 (supra) has not taken note of earlier decision in HAL 1 (supra). It has been clearly held in HAL 1 (supra) that regard being had to the dictionary clause of the ID Act for the purpose of Hindustan Aeronautics Limited, it is the State Government which has to make the reference. In HAL 2 (supra) the Court has referred to decision in SAILs case and opined that it is undisputed that Hindustan Aeronautics Limited is an undertaking of the Central Government and it is the Central Government which exercises full control over the same and, therefore, the appropriate Government is the Central Government. This analysis runs counter to HAL 1 (supra) and as well the ratio of the decision in SAILs case. On the contrary there is no discussion either on the facts or the law. It has been opined that the facts are undisputed. In HAL 1 (supra), the three-Judge Bench had referred to the decision in Heavy Engineering Mazdoor Union (supra). As has been held in Tata Memorial Hospital Workers Union (supra), the authority in Heavy Engineering Mazdoor Union (supra) has been approved in SAIL (supra) with some divergence. The authority in SAILs case, as the conclusion would show, covers two situations - the unamended provision and the amended provision. It does not disturb the principles stated in HAL 1 (supra). Thus, two aspects, first, the HAL 2 (supra) does not take note of HAL 1 (supra) and second, it proceeds on the basis of undisputed facts which are not stated. It is to be noted that there is nothing in the order in HAL 2 (supra) to suggest that Hindustan Aeronautics Limited is an agent of the Central Government. In our considered opinion, as HAL 2 (supra) has not noticed HAL 1 (supra) which has been approved in SAILs case, it cannot be considered as a binding precedent. Therefore, we hold that HAL 1 (supra) still holds good and lays down the correct law and we are bound by it as its foundation flows from Heavy Engineering Mazdoor Union (supra) which has been approved in SAIL (supra) with some divergence as has been stated in Tata Memorial Hospital Workers Union (supra). Be it stated, that divergence really does not affect the approval. We have no hesitation in our mind that HAL 2 (supra) cannot be regarded as a binding precedent. Ergo, it is clear that the Division Bench of the High Court has not applied the ratio in SAILs case correctly and, therefore, the entire anlaysis has to be held to be fallacious27. The controversy does not end there. It is perceptible that the High Court has not adverted to the merits of the case and dismissed L.P.A. No. 144 of 2002 on the ground that it did not survive after dismissal of L.P.A. No. 84 of 2006. As we have set aside the order passed in L.P.A. No. 84 of 2006 and opined that the appropriate Government in relation to the respondent company is the State Government, the matter has to be remitted to the High Court for fresh adjudication on merits