Praga Tools Corporation V/s. Shri C. A. Imanual & Ors.

 PRAGA TOOLS CORPORATION Vs SHRI C. A. IMANUAL & ORS DATE OF JUDGMENT SHELAT J.M SHELAT J.M BHARGAVA VISHISHTHA 1969 AIR 1306 1969 SCR 773 1969 SCC 585 CITATOR INFO RF 1970 SC1150 and s 18(1) of the Industrial Disputes Act 1947 and were to be in force as aforesaid until July 1 1964. On December 20 1963 however the company entered into another agreement with the said union. The effect of this agreement was to enable the company notwithstanding the two earlier settlements to carry out retrenchment of 92 of the workmen with effect from January 1 1964. Some of the affected workmen filed a writ petition under Art. 226 of the Constitution praying for a writ of mandamus against the company restraining it from giving effect to the said agree ment. The Single Judge dismissed the petition on merits In appeal the Division Bench held that the company being one registered under the Companies Act and not having any statutory duty or function to perform was not one against which a writ petition for mandamus or any other writ could lie. No such petition could also lie against the conciliation officer who had signed the agreement as on the facts of the case it was not he who sought to implement the agreement. The Division Bench however held that though the writ petition was not maintainable it could grant a declaration in favour of three of the petitioners that the impugned agreement was illegal and void. The competency of the High Court to make such a declaration was challenged by the company in appeal before this Court HELD : " The condition precedent to the issue of a mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus is in form a command directed to a person corporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is however not necessary that the person or authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue for instance to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purposes of fulfilling public responsibilities.S.C.R. 738 Regina v Industrial Court & Ors. 1 Q.B. 377 R. v. Lewisham Union 1 Q.B. 498 501 Mc. Clelland v. Northern Ireland General Health Services Boards 1 W.L.R. 594 Ridge v. Baldwin A.C. 40 Short v. Poole Corporation Ch. 66 at pp. 90 to 91 and Attorney General V. St. Ives R.D.C.1 Q.B. 366 referred to ii)The High Court was however in error in granting the declaration in favour of the three workmen.Supp. 1 S.C.R. 381 and A. B Abdulkadir v. State of Kerala Supp. 2 S.C.R. 741 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6166 Appeal by special leave from the judgment and order dated April 16 1965 of the Andhra Pradesh High Court in Writ Appeal No. 364 S. V. Gupte and R. Thiagarajan for the appellant Janardan Sharma for respondents Nos. 1 and 3 The Judgment of the Court was delivered by Shelat J. The Praga Tools Corporationis a company incorporated under the Indian Companies Act 1913. At the material time however the Union Government and the Government of Andhra Pradesh between them held 56% and 32% of its shares respectively and the balance of 12% shares were held by private individuals Being the largest shareholder the Union Government had the power to nominate the company’s directors. Even so being registered under the Companies Act and governed by the provisions of that Act the company is a separate legal entity and cannot be said to be either a Government corporation or an industry run by or under the authority of the Union Government At the material time there were two rival workmen’s unions in the company the Praga Tools Employees Union and the Praga Tools Corporation Mazdoor Sabhaand 18(1) of the Industrial Disputes Act 1947 and were to be in force as aforesaid until July 1 1964. On December 20 1963 however the company entered into an agreement with the said union to which the said sabha was not a party. The agreement recited that there were several disputes between the company and the union and that some of them were the subject matter of conciliation proceedings and some were pending arbitration or adjudication. Clause provided that the said agreements dated July 1 1961 and December 10 1962 to the extent that they were inconsistent with this agreement would stand automatically repealed or modified by this agreement. Clause stated that there was an immediate unavoidable need for reducing substantially the overhead expenditure of the company and for effecting economy and therefore notwithstanding the agreement dated December’ 10 1962 "both the parties have prepared a list of the categories and persons who would be retrenched after careful consideration". The said list was attached to the agreement as annexure VI. Clausealso provided that the agreement dated December 10 1962 stood modified so as to allow the said retrenchment to take place immediately in accordance with law. The clause further provided that in order to mitigate the consequences of the proposed retrenchment the company bad evolved a scheme of voluntary retirement with terminal benefits superior to those provided under the Industrial Tribunals Act but the scheme of voluntary retirement would be available to the workmen only for a period of 10 days from the date of the agreement. It that the company and the said union had agreed that an attempt would be made to rehabilitate the retrenched persons by helping them to obtain alternative employment and the company bad for that purpose contacted public sector and other industries and in particular the Heavy Engineering Corporation Ranchi for absorption as far as possible of the retrenched personnel. The effect of this agreement was to enable the company notwithstanding the two earlier settlements to carry out retrenchment of 92 workmen mentioned in annexure VI thereto with effect from January 1 Respondent 1 and 40 other workmen thereupon filed a writ petition under Art. 226 in the High Court of Andhra Pradesh challenging the validity of the said agreement impleading therein the company the said union and the Regional Assistant Commissioner as respondents. The petition claimed a writ of mandamus or an order in the nature of mandamus or any other order or direction restraining the respondents to implement or enforce the said agreement. The writ petition was in the first instance heard by a learned Single Judge of the High Court before whom the workmen raised the following contentions :that the said agreement dated December 20 1963 was invalid as it was entered into by the union in collusion with the company and was in violation of the said two earlier settlements that there could be no industrial dispute within the meaning of s. 2(k) of the Act as the said two earlier settlements not having been terminated under s. 19(2) were in force that therefore there could not be a valid conciliation under S. 12 and accordingly the fact of the conciliation officer having signed the impugned agreement gave no binding force to it 3) that the retrenchment of the 92 work men was illegal and void as it was in breach of s. 25(F) inasmuch as no notice thereof was given to the appropriate Government and that since the dispute relating to the company’s right to retrenchment was already settled under s. 18(1) by the said supplementary settlement of December 10 1962 no industrial dispute could be said to exist or arise until the said settlement was duly terminated under S. 19(2) that therefore there could be no valid conciliation proceedings in respect of the question of retrenchment and that the impugned agreement permitting the company to retrench though it bore the signature of the conciliation officer was not a valid agreement that so long as the earlier settlements were not terminated they held the field andthat the said letter dated April 5 1963 relied on by the learned Single Judge as having raised an industrial dispute regarding retrenchment did not in fact contain or raise any such question. The Division Bench held that the said letter raised only the question of revision of wage structure and other demands but not the question of retrenchment. The letter of July 29 1963 of the conciliation office to the company relied on by the company also referred to the demands contained in the said letter of April 5 1963 namely the revision of wage structure dear ness allowance promotion and other matters but not the question of the company’s right of retrenchment. The Division Bench therefore held that there was nothing on record to show that retrenchment was the subject matter of any conciliation before the conciliation officer and therefore any agreement conferring on the company the right to retrench so long as the said earlier settlements were not terminated was invalid in spite of the conciliation officer having given his assent to and affixed his signature on it The learned Judges however held that the company being one registered under the Companies Act and not having any statutory duty or function to perform was not one against which a writ petition for a mandamus or any other writ could lie. No such petition could also lie against the conciliation officer as on the facts of the case that officer did not have to implement the impugned agreement. The Division Bench however held that though the writ petition was not maintainable it could grant a declaration in favour of three workmen namely appellants 6 16 and 25 before it that the impugned agreement was illegal and void and dismissed the writ petition subject to the said declaration. The company challenges in this appeal by special leave the validity of this judgment making such a declaration Thus the only question which arises in this appeal is whether in the view that it took that the writ petition was not maintainable against the company the High Court could still grant the said declaration In our view the High Court was correct in holding that the writ petition filed under Art. 226 claiming against the company mandamus or an order in the nature of mandamus was misconceived and not maintainable. The writ obviously was claimed against the company and not against the conciliation officer in respect of any public or statutory duty imposed on him by the Act as it was not he but the company who sought to implement the impugned agreement. No doubt Art 226 provides that every High Court shall have power to issue to any person or authority orders and writs including writs in the nature of habeas corpus mandamus etc. or any of them for the enforcement of any of the rights conferred by Part III of the Constitution and for any other purpose But it is well understood that a mandamus lies to secure the performance of a public or statutory duty in the performance of which the one who applies for it has a sufficient legal interest. Thus an application for mandamus will not lie for an order of restatement to an office which is essentially of a private character nor can such an application be maintained to secure performance of obligations owed by a company towards its workmen or to resolve any private dispute.(1). In Regina v. Industrial Court & Ors. [1957] S.C.R. 738. [1965] 1 Q.D. 377 3) 1 Q.D. 498 501 it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus is in form a command directed to a person corporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is however not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue for ins Lance to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purposes of fulfilling public responsibilities. Vol. 11 p. 52 and The company being a non statutory body and one incorporated under the Companies Act there was neither a statutory nor a public duty imposed on it by a statute in respect of which enforcement could be sought by means of a mandamus nor was there in its workmen any corresponding legal right for enforcement of any such statutory or public duty. The High Court therefore was right in holding that no writ petition for a mandamus or an order in the nature of mandamus could lie against the company The grievance of the company however is that though the High Court held rightly that no such petition was maintainable it nevertheless granted a declaration in favour of three of the Raid workmen a declaration which it could not issue once it held that ’the said writ petition was misconceived. The argument was that such a declaration if at all could only issue against public bodies or companies or corporations set up or controlled by statutes in respect of acts done by them contrary to or in breach of the provisions of such statutes. If a public authority purports to dismiss an employee otherwise than in accordance with mandatory procedural requirements or on grounds other than those sanctioned by the statute the courts would have jurisdiction to declare its act a nullity. Thus where a Hospital Services’ Board dismissed a clerk for reasons not authorised by the relevant conditions of service a declaration was granted to the applicant by the House of Lords. (1) Even where the statutory power of dismissal is not made subject to express procedural requirements or limited to prescribed grounds courts have granted a declaration that it was invalidly exercised if the 1) 1 W.L.R. 594 rity has failed to observe rules of natural justice or has acted capriciously or in bad faith or for impliedly unauthorised purposes.and Short v Poole Corporation) (3). It is therefore fairly clear that such a declaration can be issued against a person or an authority or a corporation where the impugned act is in violation of or contrary to a statute under which it is set up or governed or a public duty or responsibility imposed on such person authority or body by such a statute The High Court however relied on two decisions of this Court as justifying it to issue the said declaration. The two decisions are Bidi Bidi Leaves’ and Tobacco Merchants Association v. The State of Bombay(4) and A. B. Abdulkadir v. The State of Kerala. But neither of these two decisions is a parallel case which could be relied on. In the first case the declaration was granted not against a company as in the present case but against the State Government and the declaration was as regards the invalidity of certain clauses of a notification issued by the Government in pursuance of power under s. 5 of the Minimum Wages Act 1948 on the ground that the said clauses were beyond the purview of that section. In the second case also certain rules made under the Cochin Tobacco Act of 1081 and the Travancore Tobacco Regulation of 1087 M.E.) were declared void ab initio. These cases were therefore not cases where writ petitions were held to be not maintainable as having been filed against a company and despite that fact a declaration of invalidity of an impugned agreement having been granted. In our view once the writ petition was held to be misconceived on the ground that it could not lie against a company which was neither a statutory company nor one having public duties or responsibilities imposed on it by a statute no relief by way of a declaration as to invalidity of an impugned agreement between it and its employees could be granted The High Court in these circumstances ought to have left the workmen to resort to the remedy available to them under the Industrial Disputes Act by raising an industrial dispute thereunder. The only course left open to the High Court was therefore to dismiss it. No such declaration against a company registered under the Companies Act and not set up under any statute or having any public duties and responsibilities to perform under such a statute could be issued in writ proceedings in respect of an agreement which was essentially of a private character between it and its workmen. The 1)A.C. 40. [1926] Ch. 66 at pp. go to 91 3)1 Q.B. 366. [1962] Supp. 1 S.C.R 381 5)[1962] Supp. 2 S.C.R. 741 High Court therefore was in error in granting the said The result is that the appeal must be allowed and the said declaration set aside. In the circumstances of the case we make no order as to costs

Summary: The company being a non-statutory body and one incorporated under the Companies Act, there was neither a statutory nor a public duty imposed on it by a statute in respect of which enforcement could be sought by means of a mandamus, nor was there in its workmen any corresponding legal right for enforcement of any such statutory or public duty.  The Praga Tools Corporation is a company incorporated under the Indian Companies Act, 1913. At the material time however, the Union Government and the Government of Andhra Pradesh between them held 56% and 32% of its shares respectively and the balance of 12% shares were held by private individuals. There were two rival workmen’s unions in the company, the Praga Tools Employees Union and the Praga Tools Corporation Mazdoor Sabha.On July 1, 1961 settlement was arrived at between the company and the union under which the workmen inter alia agreed to observe industrial truce for a period of three years and not to resort to strikes or stoppage. On December 10 1962, the company and the said union entered into a supplementary settlement under which the company agreed not to retrench or lay-off any of the workmen during the said period of truce on an assurance from the said union of cooperation and willingness of the workmen. The said two settlements were arrived at and recorded in the presence of the Commissioner of Labour under ss. 2(p) and 18(1) of the Industrial Disputes Act, 1947 and were to be in force until July 1, 1964.On December 20 1963, however, the company entered into an agreement which recited that there were several disputes between the company and the union and that some of them were the subject-matter of conciliation proceedings and some were pending arbitration or adjudication. This agreement rendered the prior two agreements repealed. Clause (6) stated that there was an immediate, unavoidable need for reducing substantially the overhead expenditure of the company and a list was prepared of persons who would be retrenched after careful consideration and also evolved a voluntary retirement scheme.The effect of this agreement was to enable the company notwithstanding the two earlier settlements to carry out retrenchment of 92 of the workmen with effect from January 1, 1964. Some of the affected workmen filed a writ petition under Art. 226 of the Constitution praying for a writ of mandamus against the company restraining it from giving effect to the said agreement. The Single Judge dismissed the petition on merits.In appeal the Division Bench held that the company being one registered under the Companies Act and not having any statutory duty or function to perform was not one against which a writ petition for mandamus or any other writ could lie. No such petition could also lie against the conciliation officer who had signed the agreement, as on the facts of the case it was not, he who sought to implement the agreement. The Division Bench however held that though the writ petition was not maintainable it could-grant a declaration in favour of three of the petitioners that the impugned agreement was illegal and void. The competency of the High Court to make such a declaration was challenged by the company in appeal before this Court.The competency of the High Court to make such a declaration was challenged by the company in appeal before this Court ISSUE BEFORE THE COURT: Whether in the view that it took that the writ petition was not maintainable against the company the High Court could still grant the said declaration. RATIO OF THE COURT It was contended by workmen that the said agreement dated December 20, 1963 was invalid as it was entered into by the union in collusion with the company and was in violation of the said two earlier settlements, that there could be no industrial dispute within the meaning of s. 2(k) of the Act as the said two earlier settlements, that the retrenchment of the 92 work-men was illegal and void as it was in breach of s. 25(F).The impugned agreement was signed by the conciliation officer appointed by the State Government and was not valid and no retrenchment could validly be effected under the force of such agreement as the company is under the management of the Union Government.The learned Single Judge negated these contentions holding that the company was neither an industry run by or under the authority of the Union Government nor under its management but being a company registered under the Companies Act the appropriate Government was the State Government. He held that the letter dated April 5, 1963 raised an industrial dispute and with the consent of the company and the union was brought for conciliation and agreement having been brought in the course of the conciliation proceedings was binding on all workmen. The single judge dismissed the writ petition on merits on the basis of the aforesaid findings given by him.Division bench hearing the appeal held that since the dispute relating to the company’s right to retrenchment was already settled under s. 18(1) by the said supplementary settlement of December 10, 1962, no industrial dispute could be said to exist or arise until the said settlement was duly terminated under S. 19(2), that therefore there could be no valid conciliation proceedings in respect of the question of retrenchment and that the impugned agreement permitting the company to retrench, though it bore the signature of the conciliation officer, was not a valid agreement.The letter relied upon by the single judge did not raise any industrial dispute but only a question regarding wage structure. The bench however held that the company being one registered under the Companies Act and not having any statutory duty or function to perform was not one against which a writ petition for a mandamus or any other writ could lie but held that that the impugned agreement was illegal and void and dismissed the writ petition subject to the said declaration.The Supreme Court hearing the appeal held that the high court was right in claiming the writ petition was not maintainable. An application for mandamus will not lie for an order of restatement to an office which is essentially of a private character nor can such an application be maintained to secure performance of obligations owed by a company towards its workmen or to resolve any private dispute.The company being a non-statutory body and one incorporated under the Companies Act, there was neither a statutory nor a public duty imposed on it by a statute in respect of which enforcement could be sought by means of a mandamus, nor was there in its workmen any corresponding legal right for enforcement of any such statutory or public duty.The appeal was however against the declaration of the high court after holding the petition not maintainable. It is fairly clear that such a declaration can be issued against a person or an authority or a corporation where the impugned act is in violation of or contrary to a statute under which it is set up or governed or a public duty or responsibility imposed on such person, authority or body by such a statute.The court observed that An order of mandamus is, In form, a command directed to a person, corporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body.The High court relied upon two decisions of this court as justifying it to issue the said declaration but neither of these two decisions is a parallel case which could be relied on. These cases were not cases where writ petitions were held to be not maintainable as having been filed against a company and despite that fact a declaration of invalidity of an impugned agreement having been granted.The court believed that once the writ petition was held to be misconceived on the ground that it could not lie against a company which was neither a statutory company nor one having public duties or responsibilities imposed on it by a statute, no relief by way of a declaration as to invalidity of an impugned agreement between it and its employees could be granted.The High Court in these circumstances ought to have left the workmen to resort to the remedy available to them under the Industrial Disputes Act by raising an industrial dispute thereunder. The only course left open to the High Court was therefore to dismiss it. The high court was in error in granting the said declaration. DECISION HELD BY COURT: The High Court in these circumstances ought to have left the workmen to resort to the remedy available to them under the Industrial Disputes Act by raising an industrial dispute thereunder. The only course left open to the High Court was therefore to dismiss it. No such declaration against a company registered under the Companies Act and not set up under any statute or having any public duties and responsibilities to perform under such a statute could be issued in writ proceedings in respect of an agreement which was essentially of a private character between it and its workmen.The High Court, therefore, was in error in granting the said declaration. The result is that the appeal must be allowed and the said declaration set aside. In the circumstances of the case we make no order as to costs. Appeal allowed.