Case: C.V. Raman, Etc Vs. Management Of Bank Of India And Another, Etc

These appeals raise an identical question and are as such being decided by a common judgment. Before coming to the question involved in these appeals it would be necessary to give in brief the facts of each of these cases to indicate the circumstances in which the said question arises. Civil Appeal Nos. 4291-4292 of 1984 have been preferred against the judgment dated 18th April, 1984 of the Madras High Court in Writ Appeal Nos. 561 and 562 of 1983. C.V. Raman, the appellant in these two appeals was an employee in the Bank of India which is a Nationalised Bank. He was dismissed from service in pursuance of disciplinary action for certain charges framed against him. Aggrieved, he preferred an appeal under Section 41(2) ofthe Tamil Nadu Shops and Establishments Act, 1947 (hereinafter referred to as the Tamil Nadu Shops Act). A preliminary objection was raised on behalf of the Bank of India to the effect that t he Tamil Nadu Shops Act was not applicable to the Bank in view of the provisions contained in Section 4(1)(c) thereof which exempted inter alia an establishment under the Central Government from the purview of that Act. The Appellate Authority, however, took the view that it was a case where the preliminary objection may be decided along with the appeal. The Bank of India thereupon filed two writ petitions in the High Court being Writ Petition Nos. 2013 and 2014 of 1979. The prayer contained in Writ Petition No. 2013 of 1979 was for the issue of a writ of mandamus directing the Appellate Authority to dispose of the preliminary objection before taking up the appeal for hearing on merits. In Writ Petition No. 2014 of 1979 on the other hand a prayer was made for the issue of a writ of prohibition directing the Appellate Authority not to proceed with the appeal. Both these writ petitions were allowed by a learned Single Judge of the Madras High Court accepting the plea raised by the Bank of India that it was an establishment under the Central Government and consequently the provisions of the Tamil Nadu Shops Act were not applicable to it in view of the exemption contained in this behalf in Section 4(1)(c). The two writ appeals referred to above were filed by the appellant against the decision in the aforesaid writ petitions which, however, were dismissed by a Division Bench of the High Court by the judgment which is under appeal in these tw o civil appeals. By the same judgment a Division Bench of the High Court also dismissed Writ Petition No. 1550 of 1981. The petitioners of the said writ petition who were employees of the State Bank of India made an application under Section 51 of the Tamil Nadu Shops Act before the Commissioner of Labour with a request to hold that all the provisions of that Act would apply to them as persons employed in the State Bank of India. A preliminary objection was raised on behalf of the Stat e Bank of India that it was an establishment under the Central Government within the meaning of Section 4(1)(c) of the Tamil Nadu Shops Act and consequently the provisions of that Act were not applicable to it. The Commissioner of Labour, however, rejected the plea of the State Bank of India and held that the provisions of the Act were applicable to it. It is this order of the Commissioner of Labour which was sought to be quashed by a writ of certiorari in Writ Petition No. 1550 o f 1981. On the view that the State Bank of India was also an establishment under the Central Government the writ petition was allowed. Civil Appeal No. 4329 of 1984 has been preferred against the said judgment by the State Banks Staff Union whereas Civil Appeal No. 4735 of 1984 has been preferred by the employees concerned.Civil Appeal No. 1120 of 1976 has been preferred against the judgment of the Andhra Pradesh High Court dated 3rd February, 1976 in Writ Appeal No. 268 of 1 975 upholding the order of a learned Single Judge dated 14th November, 1974 in Writ Petition No. 5973 of 1973. S. Rama Moorthy who is Respondent No. 3 in this appeal was an employee of the appellant, Syndicate Bank which is a Nationalised Bank . His services were terminated and an appeal was preferred by Respondent No. 3 before the Labour Officer under the Andhra Pradesh Shops and Establishment Act, 1966 (hereinafter referred to as the Andhra Pradesh Shops Act). The Labour office r allowed the said appeal which was confirmed in a second appeal by the Labour Court. Aggrieved by these orders the appellant-Bank filed writ petition No. 5973 or 1973 for quashing of these orders. One of the pleas raised in the writ petition by the appellant was that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf and consequently the orders passed in the appeals by the Labour officer and the Labour Court were without jurisdiction. This plea, however, did not find favour with the learned Single Judge who decided the writ petition and the writ petition was consequently dismissed. The Writ Appeal No. 268 of 1975 preferred by the appellant Bank against that judgment was dismissed by a Division Bench of the High Court by the judgment which is the subject matter of this civil appealCivil Appeal No. 1042 of 1979 has been preferred against the judgment of the Andhra Pradesh High Court dated 24th January, 1979 in Writ Petition No. 86 of 1979. N. Satyanarayan Murthy who is Respondent No. 3 in this appeal was an employee of the appellant- Syndicate Bank which is a Nationalised bank and was dismissed after being found guilty of certain changes in disciplinary proceedings initiated against him. He preferred an appeal which was allowed. The Bank preferred a second appeal before the Labour Court which was dismissed. Thereafter the appellant-Bank filed the aforesaid Writ Petition No. 86 of 1979 before the High Court and urged that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act the provisions of that Act were not applicable to it in view of the exemption contained in this behalf. Relying on the judgment in Writ Appeal No. 268 of 1975 which is the subject-matter of Civil Appeal No. 1120 of 1976 this writ petition was dismissed by the judgment which is under appeal in this civil appeal.Civil Appeal No. 837 of 1984 has been preferred against the judgment dated 8.4.1981 of the Kerala High Court in a writ petition being original Petition No. 1419 of 1978. P.A. Stalin, Respondent No. 1 in this appeal who was an employee of the Bank of India, a Nationalised Bank, preferred an appeal under Section 18 of the Kerala Shops and Commercial Establishments Act, 1960 (hereinafter referred to as the Kerala Shops Act) against an order passed by the Bank discharging him from service after conducting a domestic inquiry. A preliminary objection was raised by the appellant-Bank with regard to the maintainability of the appeal on the ground that it being an establishment under the Central Government within the meaning of Section 3(1)(c) of that Act, the provisions thereof including Section 18 under which the appeal had been preferred were not applicable to it. This objection was, however, overruled by the Appellate Authority and original Petition No. 1419 of 1978 was filed by the Bank in the High Court challenging the order of the Appellate Authority. The High Court did not agree with the contention of the appellant-Bank and dismissed the original Petition aforesaid by its judgment dated 8.4.1981 and it is this judgment which is under appeal, as seen above, in this civil appealCivil Appeal No. 1042 of 1979 has been preferred against the judgment of the Andhra Pradesh High Court dated 24th January, 1979 in Writ Petition No. 86 of 1979. N. Satyanarayan Murthy who is Respondent No. 3 in this appeal was an employee of the appellant- Syndicate Bank which is a Nationalised bank and was dismissed after being found guilty of certain changes in disciplinary proceedings initiated against him. He preferred an appeal which was allowed. The Bank preferred a second appeal before the Labour Court which was dismissed. Thereafter the appellant-Bank filed the aforesaid Writ Petition No. 86 of 1979 before the High Court and urged that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act the provisions of that Act were not applicable to it in view of the exemption contained in this behalf. Relying on the judgment in Writ Appeal No. 268 of 1975 which is the subject-matter of Civil Appeal No. 1120 of 1976 this writ petition was dismissed by the judgment which is under appeal in this civil appeal.Civil Appeal No. 837 of 1984 has been preferred against the judgment dated 8.4.1981 of the Kerala High Court in a writ petition being original Petition No. 1419 of 1978. P.A. Stalin, Respondent No. 1 in this appeal who was an employee of the Bank of India, a Nationalised Bank, preferred an appeal under Section 18 of the Kerala Shops and Commercial Establishments Act, 1960 (hereinafter referred to as the Kerala Shops Act) against an order passed by the Bank discharging him from service after conducting a domestic inquiry. A preliminary objection was raised by the appellant-Bank with regard to the maintainability of the appeal on the ground that it being an establishment under the Central Government within the meaning of Section 3(1)(c) of that Act, the provisions thereof including Section 18 under which the appeal had been preferred were not applicable to it. This objection was, however, overruled by the Appellate Authority and original Petition No. 1419 of 1978 was filed by the Bank in the High Court challenging the order of the Appellate Authority. The High Court did not agree with the contention of the appellant-Bank and dismissed the original Petition aforesaid by its judgment dated 8.4.1981 and it is this judgment which is under appeal, as seen above, in this civil

Reasoning:
In the instant cases we are not concerned with the question as to whether the various banks referred to above are carried on "under the authority of" the Central Government. The question, as seen above, which falls in these cases for consideration is whether in view of the existence of deep and pervasive control of the Central Government over these banks the y are establishments under the Central Government for purposes of the Acts aforesaid dealing with Shops and Commercial Establishments. Reliance was also placed by learned counsel on Hindustan Aeronautics Ltd. v. The Workmen and Ors., [1976] 1 S .C.R. 231 where again in the context of the Industrial Disputes Act the same view was taken relying on the earlier decision in the case of Heavy Engineering Mazdoor Union (supra). In this connection it may be noticed that even in the case of Heavy Engineering Mazdoor Union (supra) it was observed that the question whether a corporation is an agent of the State would depend upon the facts of each case. After referring to the decision inGraham v. Public Works Commissioner, [1901] 2 KB 781it was observed that where a State setting up a corporation so provided such a corporation could be easily identified as the agent of the State. This distinction was noticed in a subsequent decision of this Court in Regional Provident F und Commissioner, Karnataka v. Workmen represented by the General Secretary, Karnataka, [1984] II L.L.J. Page 503 Provident Fund Employees Union and Another. Reliance was then placed by learned counsel for the employees on the following observations in the case of Western Coalfields Ltd. v. Special Area Development Authority, Korba and Anr., [1982] 2 S.C.R. Pagee third contention of the Attorney General flows from the provisions of article 285(1) of the Constitution which says that the property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State. Section 127A(2) of the Madhya Pradesh Municipalities Act and Section 136 of the Madhya Pradesh Municipal Corporation Act also provide that the property tax shall not be leviable, inter alia, on "buildings and lands owned by or vesting in the Union Government". Relying on these provisions, it is contended by the Attorney General that since the appellant companies are wholly owned by th e Government of India, the lands and buildings owned by the companies cannot be subjected to property tax. The short answer to this contention is that even though the entire share capital of the appellant companies has been subscribed by the Government of India, it cannot be predicated that the companies themselves are owned by the Government of India. The companies, which are incorporated under the Companies Act, have a corporate personality of their own, distinct from that of the Government of India. The lands and buildings are vested in and owned by the companies; the Government of India only owns the share capital."In our opinion this decision too is hardly of any assistance inasmuch as in the instant cases the Banks are not asserting that they are owned by the Central Government. The other case on which the learned counsel for the employees relied on is Rashtriya Mill Mazdoor Sangh, Nagpur v. The Modal Mills, Nagpur and another, [1985] 1 S.C.R. Page 751. That case again is distinguishable. The question which came up for consideration in that case was with regard to the consequence that ensued on the issue of a notified order appointing authorised Controller under Section 18A of the Industries (Development &Regulation) Act, 1951. It was pointed out that the consequence of such a notified order being issued is to divert the management from the present managers and to vest it in the authorised Controller. It could not be said that on the issue of such an order the industrial undertaking is engaged in the industry carried on under the authority of the department of the Central Government inasmuch as the expression "under the authority of any department of the Central Government" in ordinary parlance means that the department is directly responsible for the management of the industrial undertaking. It was further pointed out that the power to regulate the management or control the management is entirely distinguishable from the power to run the industry under the authority of the department of the Central Government. As seen above, no such question arises in the instant cases while determining the point as to whether the banks referred to above are establishments under the Central Government. Union of India and others v. N. Hargopal and others, [1987] 1 L.L.J. Page 545 on which reliance was next placed was a case where the question arose as to whether establishments in public sector were covered by the provisions of the Employment Exchange (Compulsory Notification of Vacancies) Act, 1959. In the context of certain executive instructions issued by the Government of India it was held that while the Government was at perfect liberty to issue instructions to its own departments and organisations provided the instructions do not contravene any constitutional provision or any statute, these instructions cannot bind other bodies which are created by statute and which function under the authority of a statute. This decision also obviously is of no assistance in deciding the point which ha s been raised in the instant cases.Learned counsel for the employees also referred to the decision of this Court in Thote Bhaskara Rao v. The A.P. Public Service Commission and others, Judgment Today 1987 (4) S.C.C. Page 464 where it was held that employees in Hindustan Shipyard which was a Government owned undertaking could not be equated with the employees of the Government. Since in the instant cases the employees of the State Bank of India or the nationalised banks are not as ked to be treated as employees of the Central Government this decision too is of no assistance. As pointed out by this Court in Bihari Lal Dobray v. Roshan Lal Dobray AIR 1984 SC 385 the true test of determination of the question whether a statutory corporation is independent of the Government depends upon the degree of control. In this view of the matter we are of opinion that no exception can be taken to the view of the Madras High Court in its judgments which are the subject- matter of Civil Appeal Nos. 4291-4292 of 1984, 4735 of 1984 and 4329 of 1984. As regards the judgment of the Full Bench of the Kerala High Court which is the subject-matter of Civil Appeal No. 837 of 1984 and the judgments of the Andhra Pradesh High Court which are the subject-matter of Civil Appeal Nos. 1042 of 1979 and 1120 of 1976 it may be pointed out that what has weighed with the learned Judges who decided these cases is:(1) that the decisions dealing with the term "other authorities" within the meaning of Article 12 of the Constitution were not of much assistance;(2) that the Central Government exercises control over the nationalised banks only to a limited extent and that there was nothing to enable such banks to identify with the Central Government particularly when as a legal person these banks have got a right to hold and acquire property and have almost full freedom in the matter of day to dayadministration(3) Even though in the relevant clause containing exemption the Reserve Bank of India had been mentioned there was no such mention with regard to nationalised banksAs regards the first reason referred to above we have already pointed out that even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein referred to above particularly with regard to deep and pervasive control are relevant for deciding the point in issue. As regards the second reason referred to above suffice it to point out that for holding that the State Bank of India and the nationalised bank s are establishments under the Central Government which have a corporate structure and have freedom in the matter of day to day administration it is not necessary that these banks should be owned by the Central Government or be under its absolute control in the sense of a department of the Government. With regard to the last reason namely the circumstance that even though Reserve Bank of India is mentioned specifically in the relevant clause containing exemption neither State Bank of India n or the nationalised banks are so mentioned, it may be pointed out that the Reserve Bank of India was established as Shareholders Bank under Act 2 of 1934. As seen above, the Kerala Shops Act and the Andhra Pradesh Shops Act which are of the years 1960 and 1966 respectively were modelled almost on the pattern of the Tamil Nadu Shops Act which is of the year 1947. When Section 4(1)(c) of this Act referred to the Reserve bank of India in 1947 it obviously referred to it as Shareholders Bank. The Reserve Bank Transfer to Public Ownership Act (Act 82 of 1948) came into force on 1st January, 1949 and it was thereafter that the shares in the capital of the Reserve Bank came to belong to the Central Government. In this background no undue emphasis can be placed on the circumstance that the State Bank of India or the nationalised banks did not find mention in the provision containing exemption even though Reserve Bank of India was specifically mentioned therein. For the reasons stated above the aforesaid decisions of the Kerala High Court and the Andhra Pradesh High Court deserve to be set aside.On the view which we have taken namely that the State Bank of India and the nationalised banks are establishments under the Central Government we do not find it necessary to consider the question as to whether these banks are establishments which not being factories within the meaning ofthe Factories Act, 1948 are, in respect of matters dealt with in the Tamil Nadu Shops Act governed by a separate law far the time being in force in the State so as to be entitled to claim exemption under clause (f) of sub-section (1) of Section 4 of the said Act or of the corresponding provisions in the Kerala Shops Act and the Andhra Pradesh Shops Act.