Case: Mohammad Sadiq and Ors Vs. State of Uttar Pradesh and Ors

Background facts in a nutshell are as follows:Retrenched employees of Institute of Engineering and Rural Technology (for short IERT), 105 in number, filed a writ petition against the State of U.P. and its functionaries as well as the IERT praying for quashing the order dated 24.3.1999 by which it was decided that the Training-cum-Production Centre of IERT was to be closed down w.e.f. 31.3.1999 and the workmen employed were to be retrenched after paying compensationWhile allowing the writ petition the learned Single Judge gave directions which essentially read as follow:-The respondents are directed to prepare a list of the employees who were appointed prior to 1.10.1986 in the production-cum-training Centre of IERT, and were working continuously till the date of their retrenchment i.e. 31.3.1999 by excluding those who have retired, or have not given their option for absorption, to be absorbed in the vacancies in other polytechnics of the State of Government, which are recognized and funded or in any other technical institution, or any post which it may deem to be fit, in accordance with their eligibility and after relaxing age and other terms and conditions of recruitment. As and when petitioners are offered absorption on any equivalent post, they will vacate the quarters occupies by some of them in the premises of IERT. Since petitioners have accepted retrenchment compensation, no direction with regard to payment of salary is required to be given. The State Government is directed to draw the list, prepare the scheme and to offer appointment by absorption, preferably within a period of four months. There is no order as costThe present respondents questioned correctness of the order by filing special appeal before the High Court. By the impugned judgment the High Court allowed the special appeal. It held that IERT is not an instrumentality of the State and/or could not be termed to be State Government or a public Corporation. It was held that the finding of learned Single Judge that IERT is wholly owned, controlled and managed by the State Government is not correct.

Court's reasoning:
9. A bare reading of the provisions makes the positions clear that in order to bring application of the Rules the public corporation has to be a body corporate established or constituted by or under any Uttar Pradesh Actfundamental requirement is that the corporation should have been constituted by or under any Uttar Pradesh Act. Undisputedly, the Societies Act is a Central Act.