Case: Aklu Ram Mahto Vs. Rajendra Mahto

These appeals have been filed under Section 116A of the Representation of the People Act, 1951. In January 1995 the Election Commission of India issued a notification for election, inter alia, to the Legislative Assembly of the State of Bihar. The last date for filing nomination papers for Bokaro Assembly Constituency No. 279 was 23.1.1995. The appellant and the respondents in the two appeals filed their nomination papers from the Bokaro Assembly Constituency. Scrutiny of nomination papers took place on 24.1.1995. The nominations of the respondents in the two appeals were rejected on the ground that the respondents Rajendra Mahto and Ashok Kumar Srivastava were Managing agents of Bokaro Steel Plant belonging to the Steel Authority of India Ltd. Hence they were disqualified under Section 10 of the Representation of the People Act, 19512. At the election, the appellant was elected from the Bokaro Assembly Constituency. The two respondents filed separate election petitions challenging the election of the appellant on the ground that their nomination papers were improperly rejected. They have succeeded in the election petitions before the High Court. The High Court has set aside the election of the appellant on the ground that the nomination papers of the two respondents were wrongly rejected. The appellant has filed the present appeals from the decision of the High Court in the two election petitions3. The respondent-Rajendra Mahto (in Civil Appeal No. 7538 of 1997) was working as a Khalashi in the Bokaro Steel Plant of the Steel Authority of India Ltd. at the material time. This is a Level-III post in the said plant. The respondent-Ashok Kumar Srivastava (in Civil Appeal No. 7644 of 1997) was working as a Meter Reader in the Bokaro Steel Plant of the Steel Authority of India Ltd. This is Level VII post. The Steel Authority of India Ltd. is a company in which the entire share holding is held by the Union Government. Section 10 of the Representation of the People Act, 1951 provides as follows :-Disqualification for office under Government company. - A person shall be disqualified if, and for so long as, he is a managing agent, manager or secretary of any company or corporation (other than a co-operative society) in the capital of which the appropriate Government has not less than twenty-five per cent share4. The Returning Officer for 279-Bokaro Legislative Assembly Constituency in his order has held the nomination papers filed by Rajendra Mahto and Ashok Kumar Srivastava invalid on the ground that the two respondents are employees of the Bokaro Steel Plant and they are the managing agents of the Bokaro Steel Plant. Hence they are disqualified under Section 10 of the Representation of Peoples Act, 19515. The order of the Returning Officer is, on the face of it, unsustainable. Rajendra Mahto who was at the post of a Khalashi which is at level L-III in the gradation of workers, is holding a non-executive post. Ashok Kumar Srivastava who was working as a Meter Reader was working at level L-VII. Both these posts are non-executive posts. Section 10 disqualifies only the Managing Agent, Secretary or Manager of any company, in the capital of which the appropriate Government has not less than 25% share holding. Obviously, neither of them is either Secretary or Manager. A Managing Agent is a person who has been entrusted with the management of the whole or substantially the whole of the affairs of a company. Managing agencies have been abolished with effect from 3rd of April, 1970 by reason of the Companies Act being amended by Act XVII of 1969. The Companies Act contains the following definition of a Managing Agent under Section 2(25) of the Companies Act, 1956 :-2(25) Managing agent means any individual, firm or body corporate entitled, subject to the provisions of this Act, to the management of the whole, or substantially the whole, of the affairs of a company by virtue of an agreement with the company, or by virtue of its memorandum or article of association, firm or body corporate occupying the position of a managing agent, by whatever name called;Explanation I - For the purposes of this Act, reference to managing agent shall be construed as references to any individual, firm, or body corporate who, or which, was, at any time before the 3rd day of April, 1970, the managing agent of any company;Explanation II - For the removal of doubts, it is hereby declared that notwithstanding anything contained in section 6 of the Companies (Amendment) Act, 1969, this clause shall remain, and shall be deemed always to have remained, in forceQuite clearly, neither of the respondents is in-charge of the affairs of Bokaro Steel Plant and cannot be considered as Managing Agent of the Bokaro Steel Plant. The rejection of the nominated papers of the two respondents was, therefore, wholly erroneous.

Court's reasoning:
13. The appellant, however, relied upon State of Gujarat and Anr., etc. v. Raman Lal Keshav Lal Soni and others etc., 1983(2) SCC 33 which was a decision of a Constitution Bench of this Court. This decision was not concerned with Article 191(1)(a). This Court, however, was required to decide whether ex-municipal employees who were allotted to the Panchayat Service of the State Government had the status of Government servants. The Court examined the provisions of the Gujarat Panchayats Act, 1961 and held that the panchayat service constituted under Section 203 of the Gujarat Panchayat Act is a civil service of the State and the members of the service are Government servants. We fail to see how this judgment can be applied to the facts of the present case. Â37Â3  Å14. The Bokaro Steel Plant is under the management and control of the Steel Authority of India Ltd. This is a company incorporated under the Companies Act. Undoubtedly, its shares are owned by the Central Government. The Chairman and the Board of Directors are appointed by the President of India. However, the appointment and removal of workers in Bokaro Steel Plant is under the control of the Steel Authority of India Ltd. Their remuneration is also determined by the Steel Authority of India Ltd. The functions discharged by the Steel Authority of India Ltd. or by the Bokaro Steel Plant cannot be considered as essential functions of the Government. Amongst the objects of the Steel Authority of India Ltd. set out in the Memorandum of Association are to carry on in India or elsewhere the trade or business of manufacturing, prospecting, raising, operating, buying, selling, importing, exporting, purchasing or otherwise dealing in iron and steel of all qualities, grades any types. These objects also include rendering consultancy services to promote and organise an integrated and efficient development of iron and steel industry and to act as an agent of the Government/public sector financial institutions in the manner set out in the objects clause. In this context a worker holding the post of Khalashi or a Meter Reader is not subject to the control of the Central Government nor is the power of his appointment or removal exercised by the Central Government. Control over his work is exercised not by the Government, but by the Steel Authority of India Ltd. The respondents cannot, therefore, be considered as holding an office of profit under the Central Government.