Case: Tata Memorial Hospital Workers Union Vs. Tata Memorial Centre &amp; Another

2. This appeal is directed against the judgment and order of a Division Bench of the Bombay High Court dated 10.2.2009 in Appeal No.133 of 2002 arising out of Writ Petition No. 2148 of 2001, whereby the Division Bench has held that for the first respondent establishment, the Central Government was the `appropriate government for the purposes of application of Section 2(3) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 (hereinafter referred to as the M.R.T.U. and P.U.L.P. Act) read with Section 2(a) of the Industrial Disputes Act 1947 (hereinafter referred to as the I.D. Act). The Division Bench has held that the State Government was not the `appropriate government for this purpose. Consequently the Applications concerned in the present matter filed under the MRTU and PULP Act, namely the Application of the second respondent for cancellation of the status of the applicant as the recognized union under respondent No. 1, and Application for substitution of second respondent in place of the appellant, as the recognized union, were held to beThe appellant is aggrieved by the finding that the State Government is not the appropriate government and that the MRTU and PULP Act has no application to the first respondent establishment. It will result into automatic denial of its status as the recognized union under the MRTU and PULP Act and also into denial of the remedies available to the appellant and to the employees, of the first respondent, (against unfair labour practices, if any) and hence this appeal by special leave. The right of the appellant to represent the employees of the first respondent (numbering over 1300) is thus, at stake.3. The appellant is a Trade Union, registered under the Trade Unions Act 1926 and the employees of the first respondent are its members. It is already registered under Chapter III of the above referred MRTU and PULP Act as the recognized union for the employees under the first respondent by an order passed way back on 2.12.1985 by the Industrial Court, Mumbai. Respondent No.2 `Tata Memorial Hospital Kamgar Sanghatana (i.e. workers association) is another trade union functioning under the first respondent. By filing Application MRTU No. 15 of 1994 before the Industrial Court, Mumbai, the respondent No. 2 sought cancellation of the recognition of the appellant union under Section 13 of the MRTU and PULP Act. Thereafter by filing another Application MRTU No.16 of 1994, the second respondent sought its own recognition in place of the appellant union under Section 14 of the MRTU and PULP Act. Both these Applications Nos. 15 and 16 of 1994 were heard together. Oral and documentary evidence was led by parties. The report of the Investigating officer appointed for the verification of the membership of the two trade unions was considered. The first respondent in its written statement raised an objection to the maintainability of these proceedings under MRTU and PULP Act by submitting that the `appropriate government for the first respondent was the Central Government and not the State Government, and hence, the proceedings under the MRTU and PULP, were not maintainable.4. The Application (MRTU) 15 of 1994 had been filed on the footing that the registration of the appellant as a trade union itself had been cancelled by the Registrar of Trade Unions under the Trade Union Act, 1926. The appellant pointed out to the Industrial Court that the order of cancellation was misconceived and had in fact been stayed by the Bombay High Court by its order passed in the Writ Petition No. 452 of 1994. Thereupon, the second respondent conceded this position and filed a pursis (memo) that Application (MRTU) No. 15 of 1994 be allowed to be withdrawn. The Industrial Court disposed of the two proceedings by its common judgment and order dated 29.6.2001. In that order it recorded that Application MRTU No. 15 of 1994 was being disposed of for want of prosecution. As far as the Application No. 16 of 1994 is concerned, the Industrial Court accepted the report of the Investigating Officer whereunder he had held that during the relevant period for consideration of the Application under section 14 of the MRTU & PULP Act, the valid membership of the appellant union was more than that of the second respondent union. While deciding so, it examined the material on record, considered the rival submissions and held that the `appropriate government for the first respondent was the State Government. Therefore, although the two Applications were held to be maintainable under the MRTU and PULP Act, the Application No. 16 of 1994 was dismissed on merits.5. The first respondent filed Writ Petition No. 2148 of 2001 to challenge this judgment and order. The petition came to be dismissed by a Single Judge of the High Court by holding that the first respondent is an autonomous body and though the Central Government was funding the first respondent partially, it had only a partial control thereof. The Single Judge accepted the findings of the Industrial Court on the issue of appropriate government to be just, legal and proper and, therefore, dismissed the Writ Petition, by his order dated 29.10.2001. This was on consideration of the judgment of this court in Steel Authority of India & Ors. vs. National Union Waterfront Workers & Ors. (2001) 7 SCC 1 ( which had been rendered in the meanwhile on 30.8.2001). This order of the Single Judge has come to be reversed by the impugned judgment and order passed by the Division Bench. The Division Bench has held that the Governing Council of the first respondent was managing the institution as a delegate of the Central Government. This was also on basis of its consideration of the judgment in Steel Authority of India & Ors. (supra). The Division Bench held that the Central Government was the appropriate government for the first respondent and allowed the appeal. Consequently, it set aside the orders passed by the Single Judge as well as by the Industrial Court.6. Being aggrieved by this judgment and order of the Division Bench the present appeal by special leave has been filed. The appeal raises the question as to whether the Division Bench correctly applied the law laid down by this Court in Steel Authority of India (Supra) to the facts of the present case. Though the second respondent has been described as a proforma respondent, notices were issued to both the respondents and the affidavit of service with proof has been filed by the appellant with respect to both of them. The petition has been opposed by the first respondent by filing an exhaustive counter and the appellant has filed a rejoinder thereto. Mr. Colin Gonsalves, learned Senior Counsel has addressed us on behalf of the appellant, whereas Mr. Soli J.Sorabjee, learned Senior Counsel, has defended the order of the Division Bench. Both the parties have submitted their written submissions and we have considered the same also.7. Necessary Relevantdealing with the rival submissions on the issue before the Court, viz. as to whether in the facts of the present case the central government or the state government is the `appropriate government, it will be desirable to refer to the necessary relevant facts. The trustees of a public charitable trust known as Sir Dorabji Tata Trust, established sometime in the year 1940, a hospital in Mumbai, named as the Tata Memorial Hospital for the Treatment and Cure of Cancer and Allied Diseases. The hospital was then being maintained out of the funds of the trust and also from the grant made available from time to time by the Central Government and by the then Government of Bombay.8. The Government of India was desirous of establishing an Indian Cancer Research Centre forTeaching and Research in Cancer and the same was established in collaboration with the trustees of Sir Dorabji Tata Trust by an agreement dated 7.10.1953. The Government of India gave the initial grant for that Centre for setting up of a laboratory on a portion of the land belonging to the trust and also undertook to provide recurring expenditure in respect of salaries of the staff and contingencies of the management of the said Center.9. The trustees of Sir Dorabji Tata Trust subsequently decided to dedicate the hospital to the Nation with all its assets, including its funds and the plots of land. They requested the Government of India to takeover its control and management with effect from 4.2.1957. Accordingly, an agreement was entered into between the trustees and the Central Government on 4.2.1957 and under clause (1) thereof, the government agreed to takeover control and management of the hospital and to manage it at its own expenses from 1.4.1957. Under clause (2) of the agreement, the management of the hospital was to rest in the hands of the Governing Board consisting of seven members of the Board. Three of them were to be nominated by the Government of India and three by Sir Dorabji Tata Trust. The Superintendent of the Hospital was to be theseventh member of the Governing Board and its Secretary. Clause (3) of this agreement provided asTrustees of Sir Dorabji Tata Trust shall convey, assign, transfer and deliver to the Government of India the immoveable properties and moveable properties and assets of the hospital including the Cancer Infirmary Fund and the assets of the Indian Cancer Research Centre and the three plots refereed to above" (i.e. plots 107, 108 & 109 of Scheme No.60, Naigaum Estate,Mumbai).The Trustees accordingly, filed a suit being suit No. 568 of 1957 in the Bombay City Civil Court for framing a Scheme and for giving effect to and incorporating the said agreement dated 4.2.1957. The City Civil Court passed a decree on 22.3.1957 and sanctioned the scheme as annexed to the schedule. The relevant part of the courts order recorded that the properties to be conveyed, transferred or assigned by the trustees to the government being immovable properties described in schedule `B thereto are hereby vested in the government. The administrative control of the Tata Memorial Hospital and the Indian Cancer Research Centre was thereafter transferred to the Government of India. It first came under the Ministry of Health and thereafter under the Department of Atomic Energy with effect from 1.2.1962.11. The Tata Memorial Centre has come to be specifically mentioned in the rules for allocation of business of Government of India framed under Article 77 of the Constitution of India. The President of India in exercise of his powers under Article 77, has framed by order dated 14.1.1961, the Rules for allocation of business of the Government of India. Rule 2 thereof deals with the allocation of business and it states that the business of the government shall be transacted in the Ministries, Departments and Secretariats, as specified in the first schedule to these rules (all of which are referred to as the departments). Item 22 of the first schedule to the said rules, deals with the Department of Atomic Energy and item 10 of the annexure to the schedule concerning Department of Atomic Energy reads asAll matters relating the Tata Memorial Centre, Bombay.Subsequently, an agreement was entered into between the Government of India and the trustees of Sir Dorabji Tata Trust on 6.1.1966, and the two institutions viz. Tata Memorial Hospital and Indian Cancer Research Centre were amalgamated into an institution thereafter known as the Tata Memorial Centre i.e. respondent No.1 herein. The Tata Memorial Centre was registered as a Society under the Societies Registration Act 1860 and also as a Public Trust, under the Bombay Public Trust Act 1950. Under the rules and Regulations of this Society, the administration and management of the Centre vests in a Governing Council under Rule 3 thereof, and this council is the executive body of the Centre. The council is constituted under Rule 4 thereof. Rule 3 and 4 (i) of these Rules and Regulations read asAdministration and Management : Subject to these Rules and such rules as may hereafter be made from time to time, the administration and management of the Centre shall vest in the Council, which shall be the executive body of the Centre.4. Constitution of the Council:(i) The Council shall consist of:(a) Four members appointed by the Government of India;(b) Three members appointed by the Trustees of the Sir Dorabji Tata Trust;(c) The Director of the CentreDirector, TMH and the Director, CRI will be permanent Invitees to the meetings of the Council. PROVIDED that, to represent other interests, not more than two additional members may beby the Council, for such periods as the Council may decide with the concurrence of the Government of India and the Trustees of the Sir Dorabji Tata Trust.

Court's reasoning:
46. It is also material to note that this exercise is to be done basically in the context of an industrial dispute to find out as to whether in relation to any industrial dispute concerning that industry, Central Government is the `appropriate government or the State Government is the `appropriate government. Oxford dictionary defines word `concerning as `involving or `about. The word `concerning, according to Websters Dictionary means `relating to, `regarding or `respecting proximate, intimate and real connection with the establishment. It is to be noted that the Industrial Dispute Act is an act for investigation and settlement of industrial disputes and the MRTP and PULP Act 1971 is for recognition of trade unions for facilitating collective bargaining for certain undertakings with which we are concerned in the present matter, and for prevention of certain unfair practices amongst other objectives. This being the position it is to be noted that the examination of the issue as to which government is the `appropriate government is to be carried out in this context.How is the property of the first respondentcan be seen from the facts, which have come on record, the Tata Memorial Hospital was set up by Sir Dorabji Tata Trust. It was being maintained out of the funds of the Trust itself as well as from the grants made over by the Central Government as well as by the State Government. The Indian Cancer Research Centre was set up by the joint collaboration of Sir Dorabji Tata Trust and the Central Government by an agreement dated 07.10.1953. The initial grant for the Center was given by the Central Government and it was meeting the expenses of the Centre though it was set up on the land belonging to the Trust. In 1957 Sir Dorabji Tata Trust decided to dedicate to the nation the property on which the Tata Memorial Centre stands. An agreement was entered in that year between the trustees and the Central Government. The control and the management of the hospital was transferred to the Central Government and a vesting order was passed in the same year to that effect by the City Civil Court in appropriate proceedings. In the year 1966, the Central Government and the Dorabji Tata Trust entered into an agreement by virtue of which Tata Memorial Hospital and the Indian Cancer Research Centre were amalgamated and the first respondent society was created and the administration and the management of the Centre was vested in the Governing Council of the said Society. The first respondentCentre was registered as a Society under the Societies Registration Act, 1860 as well as under the Bombay Public Trust Act, 1950.53. The first respondent heavily relied upon the test of vesting of the property as the main criterion for ascertaining as to who controls the first respondent for the purpose of deciding as to which Government is the Appropriate Government. It was emphasized that under the agreement of 1957, the Dorabji Tata Trust handed over the property to the Central Government and that vesting had been continued in the agreement of 1966 also. It is, however, to be noted that as per this very agreement, the future acquisitions were to vest in the Governing Council of the Society.In this behalf, we must keep in mind, the raison detre of the above referred to Section5 that once a trust is established and a society is registered for the administration of the trust, the statute contemplates that the society should be fully autonomous and that the lack of actual transfer of property of the trust should not prevent the governing body in its administration. Law recognizes that it would be proper to regard that as done which ought to have been done. The deeming provision creates a fictional vesting in favour of the Governing Council and not in favour of the Society or the Trust. This is also for the reason that society is not a body corporate which has also been held by this Court in the Board of Trustees, Ayurvedic and Unani Tibia College, Delhi Vs. The State of Delhi and Another [AIR 1962 SC 458 ] and reiterated in Illachi Devi (D) by L.Rs. and Others Vs. Jain Society, Protection of Orphans India and Others [AIR 2003 SC 3397 ]. Since the society cannot hold the property in its name, vesting of the property in the trustees is likely to hinder the administration of the trust property, particularly, where the trustees themselves or their legal representatives claim adversely to the trust. It is for this reason that the law vests the property belonging to the society in its Governing Body.56. The phrase `property belonging to a person has two general meanings (1) ownership, (2) the absolute right of user (per Martin B in Att. Gen. vs. Oxford & C. Railway Co. 31 L.J. (1862) 218 at 227) `Belonging connotes either ownership or absolute right of user ( Wills J in The Governors of St. Thomas, St. Bartholomews, and Bridewell Hospital vs. Hudgell (1901) 1 KB 381. The Centre has an absolute right of user over its immovable properties which it has been exclusively exercising all throughout. Section 5 of the Societies Registration Act clearly declares that the property belonging to the society, meaning under its user, if not vested in the trustees shall be deemed to be vested in the Governing Council of the society. In the present case, it is nobodys case that the property remains vested in the Trustees of the Dorabji Tata Trust. It has been canvassed on behalf of the first respondent that the property is vested in the Central Government. However, the Central Government has never claimed any title to the property adverse to the first respondentSociety.57. Whether the Control and Management of the Hospital and the Research Centre is independently with the first respondent. As far as the control and management are concerned, it is clear from the facts referred to above that the Central Government has the power to appoint four nominees on the Governing Council of the first respondent. We have already seen, as held in Heavy Engineering Mazdoor Union Case (Supra), mere power to appoint the Directors does not warrant a conclusion that the particular undertaking is a Central Government Undertaking. The question is whether the undertaking is functioning as the agent of the Central Government. In the instant case, the society was created to entrust the control and management of the Hospital and the Research Centre to the Society.3 of the Society, which has been referred to earlier, also lays down that the administration and the management vests in the Governing Council. It is also to be noted that as per Rules and Regulation Nos.3 and 4 which have been quoted earlier, the administration and management of the Centre is vested in the Council which is declared to be an executive body of the center.It has clearly come in the evidence of Mr.Muthusamy, the Chief Administrative Officer of the first respondent that there was no interference of the Central Government in the day to day activities of the first respondent. The decisions were taken by the directors of the first respondent itself. As can be seen from theof the first respondent, the appointments and the service conditions were modelled on the pattern of Department of Atomic Energy, but the pay, allowances and pension, etc. are on the pattern of the Mumbai Municipal Corporation, and which are fixed by the decisions of the Governing Council of the first respondent. The material and the evidence as referred to above clearly show that the entrustment of the management and control of the Hospital and the Research Centre to the Society was complete and it has been so functioning thereafter.60. Besides, as observed in Heavy Engineering Mazdoor Union Case (supra), if we look to the definition of `employer under the Industrial Disputes Act, in a case where an industry is carried on by or under the authority of the Government, the employer is defined as the authority prescribed in this behalf or Head of the Department. In the instant case, no such authority has been prescribed, nor any head of the department notified by the Central Government. On the contrary, right from the time the society was created, its administration and management is completely under its Governing Council and it is functioning independently. No contrary evidence has been produced. The evidence of Mr. Muthusamy, the Chief Administrative Officer of the Tata Memorial Centre establishes the independent functioning of the first respondent under its Governing Council. It is the Governing Council which has been exercising the executive powers of the employer.61. It was then submitted that mentioning of the Tata Memorial Centre in the Rules for Allocation of Business of Government of India is a pointer to the control of the Central Government. Insofar as the Rules of business of the Government of India are concerned, they are for the purpose of allocation of business between various departments of Government of India whenever the Government of India has to take a decision. As rightly held by a Division Bench of Bombay High Court in their own case in Tata Memorial Centre Vs. Sanjay Verma reported in 1997 (75) Indian Factories and Labour Reports Page4 mere allocation of business under any department would not in any manner decide the issue as raised in the present case as to whether a particular industry is under the control of the Central Government. The business rules cannot be conclusive to show that any institution or organization listed under the allocation of business, would be part of any department of the Government of India. Besides, as noted in Heavy Engineering Mazdoor Union (supra) even if a Minister appoints the directors, gives directions, calls information or supervises business, that will not make the industry an agent of the Government.62. Hence we have to conclude that even on the test of control and management of the Hospital and the Centre, they are functioning independently under the 1st respondent Society. They cannot be said to be `under the control, of the Central Government. In the circumstances the State Government shall have to be held as the appropriate government for the 1st respondent for the purpose of I.D. Act consequently the MRTU & PULP Act.63. It is material to note that until the present litigation, neither the Central Government nor the Dorabji Tata Trust or even the Governing Council of the first respondent ever disputed the application of the MRTU and PULP Act to the first respondent establishment. Prior to the Applications leading to the present appeal, the respondent1 has also filed Complaints under the MRTU and PULP Act. Neither the appellant nor the second respondentrival union ever disputed the application of the Act. In fact, the first respondent has in a way, by its own conduct acquiesced into the application of the Act, and the appellantUnion has been recognized under the Act right from 1985.