Source: https://www.legalindia.com/judgments/bhehsss-association-bhel-vs-bhel-new-delhi-and-others-on-2-august-2000
Timestamp: 2019-04-21 20:47:43+00:00

Document:
Posted On August 2, 2000 by &filed under Andhra High Court, High Court.
1. All these writ petitions can be disposed of by a common judgment.
India. In WP Nos.30278 of 1998 and 3806 of 1998, similar reliefs were sought. The petitioners have sought for very ambitious relief, but in nut-shell their grievance is that they should be treated as the employees of the BHEL for the purpose of emoluments and for the purpose of terminal benefits and that the school should be directed to be run by the BHEL without closing down the school as welfare measure to the employees of the BHEL.
3. Other Writ Petitions are filed challenging the termination order passed by the BHEL School Committee by the BHEL Educational Society and termination order dated 25-2-2000 and for consequential relief of reinstatement into service and other benefits.
the BHEL to ensure continuity of service, gratuity, seniority etc. But, against the orders of the learned single Judge, the matter was carried in Writ Appeal Nos. 18905 of 1998 and 1828 of 1998 and there was a settlement between the parties. In view of this, writ appeals were disposed of in view of the settlement. However, it is the case of the petitioners that, the BHEL has been adopting the revengeful attitude. They developed an evil design by closing down the entire institution as the contempt proceedings were initiated against the highest officers of the company alleging that the orders of this Court were not complied with. Therefore, the management deliberately and intentionally started closing down the classes. In 1996-97 1st class was closed, in 1997-98 2nd class was closed and in 1998-99 3rd class was also closed. The admissions for class XI and XII for 1996-97 were closed. Thus the management has been closing down the classes with a principal aim of eliminating all the teachers and to close down the school once for all. The petitioners state that the ground of closing down the classes was deliberate and the assertions of the management that the students are not coming for admissions and that there is no required strength to maintain the classes was absolutely incorrect and it was only brought out for the purpose of terminating the services of the teachers. In fact there is heavy demand. Inspite of this, the management introduced voluntary retirement scheme which was accepted by some of the staff under various pressures, but there is no warrant for declaring the staff as surplus staff.
Education Society that the children are not coming for admissions, but at the same time, the children are being admitted to various other schools in BHEL complex. Therefore, the action of the respondents in closing down the classes is illegal and unwarranted.
6. The Writ Petition 9339 of 1999 and other writ petitions were filed by the teachers including the staff association challenging the orders of termination of various teachers. Apart from the averments which are made in WP No.29998 of 1998, it is stated that the action of the management in terminating the services is wholly arbitrary and offends Articles 14 and 21 of the Constitution of India. In effect, there is no depletion of strength and it has been intentionally caused by the management to see that the teachers are terminated on the ground of surplus staff. In a calculated move to close the school, such a step has been taken and therefore, the orders of termination are liable to be set aside and they are entitled for reinstatement with other benefits.
7. Separate counters have been filed by the BHEL and also the Education Society.
was study increase of the employees and consequently there was demand for schools. Initially, the school was managed by the committee and the entire short-fall between the expenditure and income was borne by the management of BHEL. The alleged ill will on account of Smt. Y. Padmavathi filing writ petition was wholly misconceived and not relevant. When the Society was constituted, a writ petition was filed and the same was disposed of with the directions against which the writ appeals were filed and there was a compromise between the petitioners and the Society. Therefore, it was closed. Hence, it is not open for them to contend that they are the employees of the BHEL. It is stated that the children of BHEL employees are at liberty to seek admission in any of the schools either in the township of BHEL or anywhere. The declining students strength is applicable to all the campus schools and it is a fact that in recent years, the availability of employees children for admission has been declining mainly due to the reason that there is no recruitment. It is also stated that large number of employees crossed the reproductivity age of 50 and most of the children are in colleges or married away apart from that number of employees have also taken voluntary retirement scheme, which worked out to 23%. Thus, there is a decline in the school going children.
In view of this, there is no other go except to terminate the services. Therefore, prayed to dismiss the writ petitions.
10. Though the writ petition is brimming with prolixity and when the chaff is cleared the following points would emerge for consideration of this Court.
(1) Whether the BHEL Education Society is a part of BHEL Organisation, if so, writ can be issued against the management of the society?
(2) Whether the termination of the services of the teachers working in BHEL higher secondary school was legal and valid?
children in the school and the school was being run under the management constituted under the registered bye-laws of the Society.
11. Some of the facts which are not in dispute can be separated before going to the intricacies of the case.
12. The BHEL is an Government of Undertaking registered under the Companies Act. It was established at Ramachandra Puram, Medak District in” or around 1960. It is engaged in the manufacture of Steam Turbines, Generators, Gas Turbines, Heat Exchanges, Condensers, Oil Rigs etc. In the initial stages when the project was established, there were no education facilities to the children of the BHEL employees and therefore, it was decided to start the educational institution as a welfare measure to the employees of BHEL and accordingly BHEL higher secondary school was started. The management of the school was entrusted to an independent body not connected with any of the department of the BHEL. The company had taken number of welfare measures including the education of the children in BHEL town ship. It has also permitted number of other schools to establish for providing both Central (CBSE) and State syllabus. There was study increase in the employees from 1965 onwards and hence the school established by the BHEL was running with full students complement.
to the facts and circumstances of the case and also in view of the extension of the said benefit by the Corporation itself since the filing of the writ petition, the question raised in this writ appeal is more or less of academic interest. Similar question may not arise again. Having regard to the facts and circumstances of the case, we also think that the relief granted is a just one.
“Both these writ appeals arise out of the order dated 13-10-1988 passed in WP No.8428 of 1985 disposing of the writ petition. The petitioners in the writ petition and some others have filed these writ appeals. The relief sought for in the writ petition is the issuance of writ of Mandamus declaring that the petitioners are the employees of the BHEL and restrain the respondents in the writ petition from compelling the petitioners to serve as employees of BHEL Education Society.
it has to be considered, whether the Education Society is an instrumentality of the State and whether it is amenable to writ jurisdiction of this Court. As already narrated, there is no finding that the staff working in the Education Society are the employees of BHEL and the events that took place from the establishment of the institution it is managed by a separate committee. May be the committee was composed by the officers of the BHEL, the memorandum of association of the company includes that it is also under obligation to provide welfare measure to the to employees. But, it cannot be said that any welfare measure provided would form an integral part of BHEL management and the persons employed in that process will be treated as employees of BHEL. The appointment of the teachers is done by the school committee, the salaries are paid by the school committee and the service conditions are framed by the school committee and the supervision and control is also done by the school committee, except the financial flow which is given from the BHEL management. Even after the registration of the Society, the same system was followed and it is not the case that all the actions or decisions taken by the Education Society are subject to the ratification by the management of the BHEL. For all practical purposes, the Education Society is an independent establishment except the financial autonomy. Even the BHEL management accepted that the finance are being arranged by the BHEL management as a welfare measure for the children of employees. The fact that separate conditions of service have been framed and they opted to become the employees of the Education Society, it is too late in the day to contend that the petitioners are the employees of BHEL Organisation. Mere financial flow from the BHEL to the welfare activities would not be construed that the Society is an integral part of BHEL Organisation. Hence, I have to reject the contention that the Education Society is a part of BHEL Organisation.
14. The question that falls for consideration is whether BHEL Education Society is an instrumentality of the State of an Agency of the Government. Whether a particular Corporation or a Society or a Company falls under the definition of ‘instrumentality of the State has been the subject matter of number of cases before Supreme Court. I need not refer to all these cases for the purpose of deciding the case on hand. The learned Counsel for the petitioner, however, strenuously relied on Ajay Hasia v. Khalid Mujib, , say that a society registered under the Societies Registration Act is an ‘authority’ within the meaning of Article 12 of the Constitution of India and, therefore, writ lies against the said Education Society. But before reaching Ajay Hasia ‘s case (supra), let University also consider other decisions rendered by the Supreme Court previous to this case.
was not an authority for the proposition that a Society registered under the Societies Registration Act, 1860 can never be regarded as an authority within the meaning of Article 12 of the Constitution of India. The Supreme Court further observed that having regard to the various features enumerated in the judgment in Sabhajit Tewary’s case (supra), the conclusion was reached that the CSIR was not an agency of the Government, but the Court did not rest its conclusion on the sole ground that CSIR was a Society registered under the Societies Registration Act, 1860.
the Corporation being an instrumentality or agency of Government”.
agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a Corporation created by a statute but is equally applicable to a company or society, and in a given case it would have to be decided, on ‘a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come-within the meaning of the expression “authority” in Article 12″.
17. There are other cases where the Corporations were registered under the Companies Act. In P.K. Ramachandra Iyer v. Union of India, , the issue was whether Indian Council of Agricultural Research (ICAR) an instrumentality of or the agency of the State. The Supreme Court held that the ICAR falls under the category of ‘authority’ on the ground that prior to constitution of ICAR, it was a department of the Government and after the constitution, it continued to discharge the same functions as that were discharged when it was a part of the Government. On this analogy, it was held that it was a ‘State’. It was held that the authorities were constituted under the provisions of the Statute and that such Corporations and the authorities would fall under the definition of ‘State’. But here in this case, we are only concerned with the Statutes of the society registered under the provisions of the Societies Registration Act.
and partly by gifts and donations from Indian and foreign agencies. The first President of the Society was the then Speaker of the Lok Sabha. Out of the five Vice-Presidents three were the then Central Ministers; the other two were the then Chief Justice of India and the Attorney-General. The objects of the Society were to provide for constitutional and Parliamentary studies, promotion of research in constitutional law, setting up of legislative research and reference service for the benefit of the Legislators, organisation of training programmes in matters of Parliamentary interest and importance and publication of a journal. The Supreme Court found that the ICPS was born as a voluntary organisation and though it receives substantial financial contribution from the State Government, but its objects were not governmental business. Thus, it was held that it was not a ‘State’.
19. In Sheela Barse v. Secretary, Children Aid Society, , the question arose was whether the Children Aid Society is a ‘State’ within the meaning of Article 12 of the Constitution of India. The Supreme Court observed that it is a Society registered under the Societies Registration Act and is treated as a public trust. It receives grants from the State and it was held that it falls within the meaning of Article 12 of the Constitution of India as it was undoubtedly an instrumentality of the State on the basis of the test laid down in various cases. It was also observed that the Society has to regulate its activities not only in accordance with the statutory requirements but also act in a manner satisfying the requirements of the Constitutional provisions in Articles 21 and 24 as also the Directive Principles of the State Policy.
Society was a ‘State’. The Supreme Court observed that the Sainik Schools Society was entirely funded by the State and the Central Governments and the over all control vested with the Governmental authority. The main object of the society was to run schools and prepare students for the purpose of feeding the National Defence Academy. The defence of the country was one of the regal functions of the State. Therefore, it was held that the society was a ‘State’ within the meaning of Article 12 of the Constitution of India and Article 14 of the Constitution of India was attracted.
“State” within the meaning of Article 12 of the Constitution. (See : (i) P.K. Ramachaudra Iyer v. Union of India, ; (ii) Central Inland Water Transport Corporation v. Brojonath Gangoli, ; and (iii) Tekraj Vasandhi alias K.L. Basandhi v. Union of India, )”.
The NCBRT was a Society registered under the Societies Registration Act. It has Memorandum of Association and Rules of internal management. Under clause 3.1 of the Memorandum of Association, the object of the Council was to assist and advise the Ministry of Education and Social Welfare in the implementation of its policies and major programmes in the field of education particularly school education. For achieving this object, it has to undertake several kinds of programmes and activities including coordination of research extension services and training, etc. Therefore, it was held that the NCERT was only an autonomous body and it does not have the features required to fit in the definition of ‘Instrumentality of the State’.
BHEL management at all. The Society is free to have in its membership any members from BHEL employees or outside. After the Society formation and take over of the school by the Society, there is absolutely no role played by BHEL in the affairs of the Society/school. The Society approaches the BHEL management only for financial aid for miming the school. The schools, income and expenditure statements, balance sheet efc., of the Society were maintained by the Society itself and duly audited and certified by outside auditors whereas BHEL is subject to audit by Government Audit and Statutory audit etc.
12. The salaries, allowances and benefits for the school staff are paid by this respondent Society only, from its own funds generated by the collection of tuition fees and also grants taken from BHEL. This does not give any administration or management control to BHEL as all decisions are taken by Society for the school. It is true, however, that the infrastructure, facilities like buildings, land, ground, etc., are provided by BHEL to this school and also to other schools in the campus, though they belong to various managements. The management of the schools are users of the infrastructure facilities only and not owners”.
Thus, it has to be seen that the Society was wholly managing and administering the school and taking decisions of its own without getting approval of the BHEL. The only part that is played by the BHEL management is that it finances the school to the extent of its deficit. The internal management of the society is run by the Managing Committee. It may be that the Managing Committee consisted of the Officers, but when the Officers are the members of the society, naturally they form the members of the Managing Committee.
But that would not make any difference in the eye of law. The question is whether it falls under ‘State’ or ‘other authority’ within the meaning of Article 12 of the Constitution of India. No material also has been placed by the petitioner to establish that it is under the supervision and control of the BHEL management or that it is under the purview of any statute so as to have a control of the authorities under the statute. It is as good as any other private Society for the purpose of imparting education to the children of the BHEL and also the outsiders. Simply because part of funds are being provided by the BHEL, it cannot be termed as ‘other authority’ for the purpose of Article 14 of the Constitution of India, Even if the accommodation and infrastructure facilities are provided by the BHEL, it would not be meant styling the Society as an ‘other authority’. It is in pursuance of one of the welfare measures, which is permissible under the Memorandum of Association of the Company, the institution was established. It is not a statutory requirement under any laws. The BHEL is a corporate body registered under the provisions of the Indian Companies Act. This Court silting under Article 226 of the Constitution of India cannot compel the corporation to enforce its Memorandum of Association or Articles of Association, even assuming that the welfare measures undertaken in pursuance of Memorandum of Association were not carried out. Therefore, if an agency is created to oversee the welfare activity under a State or its instrumentality, that agency cannot become an instrumentality by itself, unless it is clothed the features as observed by the Supreme Court in the cases referred to above. Of course it is engaged in the imparting of education to the students, but by that process, it cannot be said that it is an instrumentality of the State.
Rajasthan High Court in Ruby Joyce Charles v. Air Force School, 1999 (2) SLR 111, That was a case where the Society was running an institution and the said Society was registered under the Societies Registration Act. It was managed by the Air force Officers, who are officers of the Central Government. The functioning of the institution was controlled by the Officers of the Central Government. It was in the list of grant-in-aid by the Central Government. The appointments on the post of Principal and Teachers are made by the Officers of the Central Government and they are authorised to take disciplinary action against the delinquent Principal and Teacher. The Managing Committee is incharge of the general superintendence, direction and control of the affairs of the Society and its income and by the property was largely controlled by the Air force Officers of the Central Government. Therefore, on the basis of that criteria, the learned single Judge of the Rajasthan High Court held that it was the ‘State’. But in the present case, the facts are quite different. The Managing Committee is formed under the registered bye-laws of the Society and the appointments are made by the Society and conditions of service of the staff are framed by the Society. In fact the earlier history of the Society itself reveals that after formation of the society, options were called for and all the members of the Society gave options to become the members of the Society. Therefore, the judgment of the Rajasthan High Court in Ruby Joyce’s case, (supra) has no application to the facts of the present case.
But the present case stands on a different footing. It is not the case of the petitioners that statutory regulations have been violated. It is the case of the petitioners that the Education Society is a ‘State’.
The learned Counsel also relied on the judgment of the Supreme Court in Indian Overseas Bank v. I.O.B. Staff Canteen Workers’ Union, 2000 (3) Supreme 344, wherein workmen of co-operative canteen run for the staff of Indian Overseas Bank, with the fund of Bank, held to be workmen of Bank. But this decision is of no avail to the petitioners. It was a decision arising under the Industrial Disputes Act and the matter was referred to by the Tribunal and the Tribunal held on the basis of the material produced before it that there exists a relationship of master and servant and, therefore, that decision cannot be invoked by the petitioners in the present case.
of functions of Education Society. The petitioners in Writ Petition No.29998 of 1998 are, therefore, not entitled to seek any relief under Article 226 of the Constitution of India and accordingly it is dismissed.
26. The other writ petitions are filed challenging the termination orders passed by the Education Society. Since I have held that writ is not maintainable against the Education Society, the petitioners cannot challenge the validity of the termination orders passed by the Education Society in writ proceedings. Therefore, these writ petitions are also dismissed. No costs.
27. It is open for the petitioners to seek remedy available under any other law.

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