A. C. SHIVE GOWDA v. COFFEE BOARD — 1973 DIGILAW 274 (KAR)

( 1 ) THESE four petitions under Art. 226 of the Constitution can be disposed of by a common order as the questions arising are common to all of them. The relevant facts, in brief, are as follows : the petitioners are all Coffee Planters and are governed by the provisions of the Coffee Act (Central Act VII of 1942 ). According to the provisions of Sec. 14 of that Act, they had all been recognised as 'registered owners' of 'registered coffee estates'. According to the provisions of the coffee Act, these owners had to deliver all the coffee produced by them unless a quota had been allotted for internal sales, to the Indian Coffee market Expansion Board (hereinafter referred to as the Board), which is a body corporate in the name and style of Coffee Board with perpetual succession and a common seal. The Board in accordance with the provisions of the Act. and pursuant to any directions issued by the Central government in the exercise of the powers conferred by the various provisions of that Act, shall have the exclusive right to sell all the coffee, so delivered. The Board is required under the provisions of that Act to have two kinds of funds, namely, the General Fund and the Pool Fund. ( 2 ) THE General Fund is made up of all the amounts paid by the Central govt. from out of the amounts colleced as duties of customs and excise and any sum transferred out of the surplus remaining from the Pool Fund. This fund can be utilised by the Board only for certain specific purposes and the registered owners have no manner of claim over it. The Pool Fund, on the other hand, is almost exclusively made up of the proceeds of the sale of coffee from the surplus pool. It is specifically enjoined by the Act that such fund shall be utilised for making payments to the registered owners proportionate to the value of coffee delivered by them for inclusion in the surplus pool and to meet the cost of curing, storing and marketing of coffee and administering the surplus pool. It can also be utilised for the purchase of coffee not delivered to the surplus pool. It can also be utilised for the purchase of coffee not delivered to the surplus pool. ( 3 ) IT is also provided in the Coffee Act that the registered owners shall have no manner of right over the coffee delivered to the Board and the latter shall have the right to make only such payments out of the Pool Fund to the registered owners as it thinks proper and in the proportion prescribed under S. 34 of that Act. S. 42 of that Act has made provision for control and supervision by the Cenral Government in respect of all acts of the board. ( 4 ) THE first respondent-Board employs a large number of clerical and other employees in the various establishments under its control for the purpose of performance of its duties as enjoined by the Coffee Act. It would appear that a demand for payment of bonus under the Payment of Bonus act, 1965 (hereinafter referred to as the Bonus Act) was made by such employees. According to the petitioners the Central Government, on a reference made to it by the Board, directed the Board to pay arrears of bonus for the years from 1964-65 ending with 1968-69 from out of the Pool fund, irrespective of the fact that the salaries of such employees were met out of the General Fund or the Pool Fund. According to the petitioners, the document Ex. A. , which is nothing but a note placed by the Chairman before the Board for its consideration is evidence enough of such a direction having been issued by the Government. It would appear bonus was paid to the employees in accordance with the decision taken thereon by the board. Aggrieved by the action of the Board, the petitioners have approached this Court. ( 5 ) ON behalf of the petitioners, it is principally contended that the bonus so paid was unauthorised in that the Board was neither carrying on an industry nor was obliged to pay such bonus under the provisions of the bonus Act. It is also contended that no bonus would be payable outside the provisions of the Bonus Act. Such payment, according to them, has the effect of reducing the amounts payable to them towards the value of the coffee, delivered by them to the Board. It is also contended that no bonus would be payable outside the provisions of the Bonus Act. Such payment, according to them, has the effect of reducing the amounts payable to them towards the value of the coffee, delivered by them to the Board. It is also complained that such payment almost exclusively out of the Pool Fund even for the employees whose salaries are met out of the General Fund was clearly unjustified. The further contention is that the Board was not carrying on an industry within the meaning of the Industrial Disputes Act (hereinafter referred to as I. D. Act) and it was only a Trustee or agent of the registered owners. ( 6 ) IT is also contended that the Central Government is not empowered to direct payment of such bonus, S. 42 of the Coffee Act notwithstanding. On behalf of the Board and the Central Government, all these contententions are refuted. It has been contended by them that the activities of the Board constitute an industry within the meaning of its definition under the I. D. Act. It is also contended that even if Bonus Act was not applicable, the Board was well within its right to grant bonus to its employees. The petitioners have no locus standi to maintain the petitions as they have no manner of proprietary or controlling interest individually in regard to the powers and duties of the Board. In any event, the loss or detriment suffered by the petitioners individually is so wholly neglible as to warrant a refusal of the exercise of the discretionary jurisdiction of this Court under Art. 226 of the Constitution. These are the principal contentions urged, the last two of them having been pressed for consideration by way of preliminary objections. The employees also have entered appearance through Cqunsel and on their behalf, the aforesaid contentions of the principal contestants have been adopted with a little elaboration on the question of locus standi of the petitioners. ( 7 ) ON behalf of the respondents, two preliminary objections have been raised, touching the question of locus standi of the petitioners to maintain these petitions and whether, on the facts and cirumstances, these are fit cases where this Court ought to exercise the discretionary jurisdiction vested in it under Art. 226 of the Constitution, I shall therefore, consider them first. ( 8 ) ON the, first question relative to locus standi, it was submitted, that the rights of the petitioners individually, so far as they concern the receipt by them of the price of coffee delivered, is limited to the provision made in ss. 25 (6) and 34 (1) of the Act. Viewed in the light of these provisions, the petitioners would have no manner or right to question the payment of bonus by the Board to its workers. ( 9 ) ON behalf of the petitioners, it was contended that as the payment of bonus by the Board was unauthorised, any such payment would have the effect of reducing the amounts payable to them towards their share from the pool fund as envisaged under S. 34 of the Act. In this view, the petitioners must be taken to haye the necessary locus standi to maintain the petition. Even otherwise in order to maintain a petition under Art. 226 of the Constitution, it is not invariably necessary to establish that the petitioners ought to, have a personal or individual interest in the subject matter concerned therewith. In support of those propositions, reliance was placed on certain enunciations of the Supreme Court in the cases of Gadde venkateshwara Rao v. Government of A. P. , AIR 1966 SC 828 , and R. C. Cooper v. Union of India, AIR 1970 SC 564 . ( 10 ) ON a careful examination, I am clearly of the view that the petitioners have no locus standi to maintain these petitions. It is relevant to set out the statutory provisions relied on in support of the objection of the respondents. They read thus : Section 25 (6) of the Act:"when coffee has been delivered or is treated as having been delivered for inclusion in the surplus pool, the registered owner whose coffee has been so delivered or is treated as having been so delivered shall retain no rights in respect of such coffee except his right to receive the payments referred to in Section 34; andsection 34 (1):" The Board shall at such times as it thinks fit make to registered owners who have delivered coffee for inclusion in the surplus pool such payments out of the Pool Fund as it may think proper. " (The rest of the above sections not set out a unnecessary ). " (The rest of the above sections not set out a unnecessary ). ( 11 ) AN analysis of the above provisions would show that under the former sub-section a registered owner will not have any right over the coffee produced and delivered by him to the Board and the only right that survives to him is to receive the payment as provided under S. 34 of the Act. In my view, one of the objects underlying this provision is to avoid any kind of interference by such registered owners in regard to the sale and marketing of coffee by the Board. Indeed, it plainly operates to vest the ownership of such coffee in the Board. Sub-sec. (1) of S. 34 clearly vests in the Board a fairly wide discretion in regard to the payments to be made out of the pool fund to such registered owners. Such discretion is exercisable by the Board subject to the conditions imposed therein. For our present purpose, it is unnecessary to refer to these conditions. The words 'thinks fit' and 'may think proper' occurring in S. 34 (1)would exclude any idea of a demand for payment of the proper price for the coffee delivered, by the registered owners. The fact that the pool fund is almost exclusively made up of the realisations from the sale of coffee from the surplus pool would not make any difference in regard to the absence of such right in the registered owners. The object of vesting such discretion in the Board, apart from any other consideration, to my mind, appears to be to avoid any possibility of a claim being made against the Board in regard to the whole of the gross receipt making up such a fund, without reference to the outgoings on account of curing and marketing of coffee, among several other matters. ( 12 ) IN the light of the foregoing discussion, it would be clear that persons in the position, of the petitioners have no manner of right or control over the expenditure to be incurred by the Board in earning the amounts which make up the pool fund. In this view, if bonus has been paid by the Board to its wprkers, it is purely a matter falling within its exclusive right of management of its own affairs, financial and otherwise. In this view, if bonus has been paid by the Board to its wprkers, it is purely a matter falling within its exclusive right of management of its own affairs, financial and otherwise. For this purpose, it has to maintain a large staff of officers and servants on salaried basis. Bonus, in one sense, partakes of the character of an allowance intended to make up for any insufficiencies in the salaries drawn, when measured against the cost of living expenses. Therefore, any payment of bonus to an employee by the Board is incidental to the payment, of salary. For all these reasons, this objection must be upheld. I shall turn now to the cases cited on behalf the peritioners. ( 13 ) IN Gadde Venkateshwara Rao's case (1), the Supreme Court was concerned with a question of locus standi of the Writ Petitioner, who had no personal or individual interest in the subject matter, which was concerned with the setting up of a Primary Health Centre at a particular village. The appellant therein was a President of the Panchayat Committee of the village which had been denied the privilege of having such a Centre by an order of the Government, which had earlier made an order favourable to it. It would appear that in order to earn the right to have such a centre, the Village Panchayat had to comply with a condition regarding payment of a sum of Rs. 10,000 to the Government. In this connection, the appellant (Writ Petitioner) had also played a prominent part for and on behalf of the villagers. In the light of all such circumstances present in that case, the Court observed thus :"the appellant represented the village in all its dealings with the Block Development Committee and the Panchayat Samathi in the matter of the location of the Primary Health Centre at Dharmaji-gudem. His conduct, the acquiescence on the part of the other members of the committee and the treatment meted out to him by the authorities concerned support the inference that he was authorised to act on behalf of the committee. The appellant was, therefore a representative of the committee which was in law the trustee of the amounts collected by it from the villagers for a public purpose. We have, therefore, no hesitation to hold that the appellant had the right to maintain the application under Art. 226 of the Constitution. The appellant was, therefore a representative of the committee which was in law the trustee of the amounts collected by it from the villagers for a public purpose. We have, therefore, no hesitation to hold that the appellant had the right to maintain the application under Art. 226 of the Constitution. This Court held in the decision cited supra that ' ordinarily' the petitioner who seeks to file an application under Art. 226 of the Constitution should be one who has a personal or individual right in the subject matter of the petition. A personal right need not be in respect of a proprietary interest; it can also relate to an interest of a trustee. That apart, in exceptional cases as the expression 'ordinarily' indicates, a person who has been prejudicially affected by an act or omission of an authority can file a writ even though he has no proprietary or even fiduciary interest in the subject matter thereof. The appellant has certainly been prejudiced by the said order. The petition under Art. 226 of the Constitution at his instance is, therefore, maintainable. " ( 14 ) IT is clear from the above passage that the Court has found as a fact that the appellant therein had sufficient interest in the subject matter, although no personal or individual right of his had been concerned with it. In the instant case, the position is not similar. The petitioners have no right at all to interfere with the management of the Board. There is also no clear legal right in them to make any claim in regard to the realisations by the Borad on account of the sale of coffee from the surplus pool. In these circumstances, it cannot readily be posited that any of their rights have been prejudicially affected or that their interest in the subject matter is such as would warrant an inference that the petitions could be maintained by them. ( 15 ) THE next is R. C. Cooper's case (2 ). In that case a question arose whether a shareholder of a Banking Company could question the State action of taking over of such company under a legislative enactment. ( 15 ) THE next is R. C. Cooper's case (2 ). In that case a question arose whether a shareholder of a Banking Company could question the State action of taking over of such company under a legislative enactment. The enunciation relied on occurs at para 14 of the above report and reads thus :"a measure executive or legislative may impair the rights of the Company alone, and not of its shareholders it may impair the rights of the shareholders and not of the Company; it may impair the rights of the shareholders as well as the company. Jurisdiction of the court to grant relief cannot be denied when by State action the rights of the individual shareholders are impaired if that action impairs the rights of the company as well. The test in determining whether the shareholders' right is impaired is not formal; it is essentially qualitative; if the State action impairs the right of the shareholders as well as of the company, the Court will not, concentrating merely upon the technical operation of the action, deny itself jurisdiction to grant relief. " ( 16 ) IT is plain from the above enunciation that any State action should adversely affect the Company as well as its shareholders, for it to be challenged at the instance of a shareholder only. We are not concerned with any such situation in the instant case. The differences, if any, are only between the Board and the registered owner, who cannot even be remotely assimilated to a shareholder. I have earlier adverted to the extremely tenuous and limited nature of the right of a registered owner under the coffee Act. But one of the arguments on behalf of the Petitioners is that the Board can be assimilated to a State within the meaning of Art. 12 of the Constitution. That being so, if its action affects the owners, who are entitled to the benefit arising out of the management of the Board exclusively, the petition would be competent. The assumption underlying such an argument that such owners are entitled to the benefit exclusively, is not warranted in view of the provisions of Ss. 25 (6) and 34 (1) of the act discussed earlier. It is worthy of note that these provisions have not been challenged as unconstitutional. The assumption underlying such an argument that such owners are entitled to the benefit exclusively, is not warranted in view of the provisions of Ss. 25 (6) and 34 (1) of the act discussed earlier. It is worthy of note that these provisions have not been challenged as unconstitutional. Hence the above enunciation of the supreme Court is not also of much assistance to the petitioners in support of a contention that they had the necessary locus standi to maintain these petitions. ( 17 ) TURNING now to the second of these objections, it is necessary to briefly refer to the factual position obtaining in all these petitions in regard to the magnitude of the financial lass or detriment suffered by them, individually, on account of the payment of bonus by the Board in the counter filed on behalf of the first respondent, the actual amount of such loss has been worked out for the year 1968-69 and the same have been set out and compared with the total sums actually paid out to the writ petioners towards their respective shares from the 'pool fund' in accordance with S. 34 of the Act. One look at those figures would show that the loss they have been complaining about is so very negligible when compared with the large sums drawn by them from the pool fund, that no reasonable man could be expected to make a grievance of it. The total sum paid out as bonus to the staff from out of the pool fund, for the said year is only Rs. 92,049-78. The total realisations from the sale of coffee from out of the surplus pool in the same year has been Rs. 35,05,01,110-74. It will therefore be seen that a sum of less than 1 lakh has been paid out as bonus as against the gross receipts of nearly 3505 lakhs. Even assuming that the petitioners could legitimately question such payment, that the actual financial loss suffered by each of the petitioners would be of a trifling character when compared with the large amounts received by them, would be clear from the tabular statement below: - ( 18 ) THE above figures have not been challenged on behalf of the petitioners. Even assuming that the petitioners could legitimately question such payment, that the actual financial loss suffered by each of the petitioners would be of a trifling character when compared with the large amounts received by them, would be clear from the tabular statement below: - ( 18 ) THE above figures have not been challenged on behalf of the petitioners. But the argument is that this kind of liability is of a recurring nature and therefore these figures might not remain at the same low level in the years to come, when the Bonus Act itself might undergo changes thus imposing a larger burden on such registered owners, as a body. I fail to see how such a situation could be brought about without reference to the capacity of an industry to bear such a burden, even if it were to be heavy as contended. Moreover, it is a matter for policy makers speaking through laws made by a legislature. The other facet of the argument that the petitioners as a body would suffer a much larger loss cannot also be accepted for two reasons First, the petitioners can urge their personal grievance individually and not collectively. Second, even if it is a collective grievance, the proportion that such detriment or loss would bear to the total of the amounts received by the whole body of such registered owners would remain the same as in the case of individual owners. For all these reasons, I am clearly of the view that the subject matter concerned in each of these petitions when viewed in the context of the benefit derived by the petitioners, is of a too petty and trivial nature and does not, therefore, warrant the exercise of the discretion vested in this Court under art. 226 of the Constitution in favour of the petitioners. The petitions, therefore, are liable to be dismissed on this account also. Though the above discussion would be sufficient to dispose of these petitions, since the matter has been argued at some length, I propose to consider briefly, the contentions urged at the Bar. ( 19 ) IT is urged on behalf of the petitioners that the activities of the Board do not constitute an 'industry' within the meaning of S. 2 (j) of the Industrial disputes Act read with S. 2 (22) of the Bonus Act. ( 19 ) IT is urged on behalf of the petitioners that the activities of the Board do not constitute an 'industry' within the meaning of S. 2 (j) of the Industrial disputes Act read with S. 2 (22) of the Bonus Act. The functions of the Board are akin to sovereign governmental functions and not really of a commercial nature. On behalf of the Board, it is contended that the activities of the Board are such as would satisfy the tests laid down in the decision of the Supreme Court in the case of the Federation of Indian chamber of Commerce and Industry, AIR 1972 SC. 763 , and therefore, it constituted an industry within the meaning of Sec. 2 (j) of the Industrial Disputes Act. The enunciation relied on occurs at para 27 of the said report and reads thus :"in our view the linchpin of the definition of industry is to ascertain the systematic activity which the organisation is discharging namely whether it partakes the nature of a business or trade, or is an undertaking or manufacture or calling of employers. If it is that and there is co-operation of the employer and the employee resulting in the production of the material services, it is an industry notwithstanding that its objects are charitable or that it does not make profit or even where profits are made, they are not distributed among the members. " ( 20 ) IN my view, the contention of the petitioners cannot be accepted. As can be gathered from the various provisions of the Coffee Act, the board is an autonomous body which carries on the activities of storing, curing and sale of coffee in a systematic way with the co-operation of the staff and agents appointed for the purpose. The contention that it functions on a no profit no loss basis cannot also be accepted. It is clear from the several allegations in the counter filed on behalf of the Board, which are not seriously controverted, that in effecting sales of coffee from the surplus pool, albeit subject to certain restrictions imposed by that Act, the profit motive is not eliminated altogether. That it has to be so would be clear if it is realised that the Board had to meet expenses of various different kinds from out of such sale proceeds as enjoined by S. 32 (2) of the Coffee Act. That it has to be so would be clear if it is realised that the Board had to meet expenses of various different kinds from out of such sale proceeds as enjoined by S. 32 (2) of the Coffee Act. It is further clear from the provisions of that Act to wit s. 34 (1), that all the sale proceeds inclusive of profits are not disbursed to the registered owners who would have contributed to the surplus pool of coffee. Moreover, the fact that the profits are passed on to the owners as contended for the respondents, would not necessarily connote that the board has not been making any profits for itself. In these circumstances, it would be no answer to say that the Board has not been making any profit for itself. Similarly, the further argument that the Board was a 'state' within the meaning of Art. 12 of the Constitution, as he functions performed by it are Regal in character, which it is competent only for the State to undertake, cannot also be accepted. Even assuming without deciding that some of the functions of the Board could be assimilated to functions which can only be performed by the State in the exercise of its sovereign powers, the predominant activities of the Board are concerned with storing, curing and sale of coffee. These activities are clearly indicative of a business or undertaking which is systematically carried on. In this connection, it is relevant to refer to certain tests adverted to in an earlier decision of the Supreme Court in the case of Madras gymkhana Club Employees Union v. Gymkhana Club, (1967) 2 LLJ. 720 . The Court after reviewing the various earlier decisions, has, inter alia, observed as follows :"it is clear that before the work engaged in can be described as an industry, it must bear the definite character of 'trade' or business or manufacture or calling or must be capable of being described as an undertaking resulting in material goods or material services. It is not necessary that the employer must always be a private individual or individuals. The Act in terms contemplates cases of industrial disputes where a local authority or public utility service may be the employer. But the Government cannot be regarded as an employer within the Act if the operations are governmental or administrative in character. It is not necessary that the employer must always be a private individual or individuals. The Act in terms contemplates cases of industrial disputes where a local authority or public utility service may be the employer. But the Government cannot be regarded as an employer within the Act if the operations are governmental or administrative in character. The local authorities also cannot be regarded as industry unless they produce material goods or render material services. Where the activity is to be considered an industry, it must not be casual but must be distinctly systematic. The labour required must be productive and the workmen must be following an employment, calling or industrial avocation. The labour force includes not only manual or technical workmen but also those that are necessary or considered auxiliary to the productive labour of others but does not include persons in a managerial capacity. " ( 21 ) VIEWED in the light of the above enunciation, an argument constructed on the basis of the meaning of the word 'state' in Art. 12 of the Constitution, may have also to fail in that if anv authority falling within the provisions of that article engages in a systematic activity producing material goods or services useful to the community, would still fall within the ambit of the expression 'industry'. For all these reasons, I hold that the Coffee board is an employer falling within the definition of 'industry' under section 2 (j) of the Industrial Disputes Act. ( 22 ) IT is next urged for the petitioners that no bonus could be paid by an employer outside the Bonus Act, nor could any payment be made as ex-gratia, as alternatively contended on behalf of the Board. The contention on behalf of the Board has been that even assuming that the Bonus Act would be inapplicable to its establishment, there was no prohibition against payment of such bonus to its workers in its discretion. In regard to the latter contention, the petitioners submit that having regard to the manner in which the subject has been dealt with, in the context of the decision or the Government of India and the claim of the staff specifically under the bonus Act, it would not be open to the Board to plead any such discretion. In regard to the latter contention, the petitioners submit that having regard to the manner in which the subject has been dealt with, in the context of the decision or the Government of India and the claim of the staff specifically under the bonus Act, it would not be open to the Board to plead any such discretion. It seems to me that in the facts and circumstances, the Board could not properly be precluded from raising such a contention on the first part of the above contention, reliance was placed on a decision of the Supreme Court in the case of Sanghvi Jeevraj Gnewar chand v. Madras Chillies, Grains and Kirans Merchants Workers' Union, (1969) 1 LLJ. 719 . I have carefully gone through the said decision so far as it concerns the present question, and am of opinion that it is only an authority for the proposition that the Bonus Act, being a comprehensive statute, it would be competent for a worker to claim bonus only within the four corners of that Act and not outside it. In other words, bonus can be claimed by a worker as right only under that Act. This is not the same thing as saying that an employer cannot at all pay any amount to a worker as bonus or ex-gratia payment. If one has regard to the true nature and character of bonus it would be obvious that any such payment could not have been justly inhibited by the enactment of the Bonus Act. In the above decision, this is what the Supreme Court has observed :" (1) that bonus was not a gratuitous payment nor a deferred wage, and (2) that where wages fall short of the living standard and the industry makes profit part of which is due to the contribution of labour, a claim for bonus may legitimately be made by the workmen. "from the above enunciation, it would be clear that bonus in a sense as a payment made to make up for the shortfall in the salary when measured against the living standard. For these reasons, this contention also must fail. "from the above enunciation, it would be clear that bonus in a sense as a payment made to make up for the shortfall in the salary when measured against the living standard. For these reasons, this contention also must fail. ( 23 ) IT is next urged that S. 32 (iv) of the Bonus Act clearly excludes an establishment engaged in any industry carried on by or under the authority of any department of the Government, either Central or State, from the purview of that Act. The said provision reads :"nothing in this Act shall apply to : (iv) employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the central Government or a State Government or a local authority. "the argument is that S. 42 of the Coffee Act enables the Central government to issue directions to the Board and interfere with any action taken by it. It must therefore be held that the Board is only an agent for the Central Government in the carrying on of its activities which are really those of the Government itself. In this view, and in the light of s. 32 (iv), the Bonus Act would be inapplicable to the employees of the board. ( 24 ) IN this context, it is necessary to note that the Board is a statutory corporation with autonomous powers and its activities in regard to the trading in coffee are not much different from those of a commercial concern. Viewed in the light of these circumstances, the fact that the Central government could exercise control as provided under Sec. 42 and other provisions of the Coffee Act, would not, in my view make any difference to the applicability of S. 32 (iv) of the Bonus Act. This view is clearly supportable by an enunciation of the Supreme Court in the case of Heavy engineering Mazdoor Union v. State of Bihar, AIR 1970 SC 82 . The relevant enunciation occurs in paragraph 5 of the said report and runs thus :"the question whether a corporation is an agent of the state must depend on the facts of each case. The relevant enunciation occurs in paragraph 5 of the said report and runs thus :"the question whether a corporation is an agent of the state must depend on the facts of each case. Where a statute setting up a corporation so provides such a corporation can easily be identified as the agent of the State as in Graham v. Public Works Comissioners (1901-2 KB 781) where Phillimore J. sajd that the Crown does in certain cases establish with the consent of Parliament certain officials or bodies who are to be treated as agents of the Crown even though they have the power of contracting as principals. In the absence of a statutory provision however, a commercial corporation acting in its own behalf even though it is controlled wholly or partially by a Government Department will be ordinarily be presumed not to be a servant or agent of the State. The fact that a minister appoints the members or directors of a corporation and he is entitled to call for information to give directions which are binding on the directors and to supervise over the conduct of the business of the corporation does not render the corporation an agent of the Government. (See State Trading Corporation of India Ltd. v. Commercial tax Officer, Vishakhapatnam (1964 (4) SCR 99 at P. 188= air 1963 sc 1811 at P. 1849) per Shah J. and Tamlim v. Hannaford (1950-1 KB 18 at pp. 25, 26 ). Such an inference that the corporation is the agent of the Government may be drawn where it is performing in substance governmental and not commercial functions (Cf. London County Territorial and Auxiliary Force Association v. Nichols (1948-2 All ER. 432) ). " ( 25 ) VIEWED in the light of this enunciation and the other facts and circumstances, i am clearly of the view that the Board is not such an undertaking as would fall within the purview of S. 32 (iv) of the Bonus Act and therefore the said Act would be clearly applicable to it. The next contention of the petitioners is that the Board is in the nature of one or the other institutions specified in Sec. 32 (v) (c) of the bonus Act and therefore, exempted from the purview of that Act. That clause reads :"32. The next contention of the petitioners is that the Board is in the nature of one or the other institutions specified in Sec. 32 (v) (c) of the bonus Act and therefore, exempted from the purview of that Act. That clause reads :"32. Nothing in this Act shall apply to :- * * * * *" (v) (c) institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit. "the argument is that the Board functions on a no-profit-no loss basis. Even if it be assumed that it makes some profit, as contended on its behalf, it is not profit, earned for itself. I have earlier discussed this aspect in the context of the first of the contentions urged. I haye opined that the Board, in fact, makes profits and such profits were not passed on in their entirety to the registered owners. It must, therefore, be held that one of the essential ingredients, postulated in S. 32 (v) (c) of the Bonus Act, was absent in context of the Board. Reliance, however, was placed on a decision of the high Court at Allahabad in U. P. Engineers Association v. U. P. Electricity board, 43 FJR 405, in order to show that such exemption would be available in the instant case. The facts in that case are clearly distinguishable from those of the instant case. The Court held therein that the Electricity Board could not be held to have been established for earning profits, having regard to the provisions of the Electricity (Supply) Act, 1948. The position is not similar in the instant case. ( 26 ) IN my view, there is yet another reason why such a contention cannot be accepted. It will be seen from clause (v) (c) of S. 32, that it refers to certain institutions almost by way of explanation of the word ' institutions' occurring therein. The institutions enumerated therein are all such as cannot be said to be carrying on any trading activity or business for the purpose of profit. I am aware that the institutions named therein are not exhaustive. The Board cannot be characterised as falling within the category of any of those institutions. It is exclusively meant for developing the coffee industry as a whole. I am aware that the institutions named therein are not exhaustive. The Board cannot be characterised as falling within the category of any of those institutions. It is exclusively meant for developing the coffee industry as a whole. It carries on the business of trading in coffee with a vietw to earn profits for the benefit of the registered owners as well as the industry as a whole. For all these reasons, I hold that the provisions of S. 32 (v) (c) of that Act would be inapplicable to it. ( 27 ) THE next and the last contention is based on S. 32 (x) of the Bonus act. That provision reads thus :"sec32. Nothing in this Act shall apply to : * * * * * (x) Employees employed by any establishment in public sector, save as otherwise provided under this Act: "the argument is that in view of the definition of the expression "establishment in public sector" occurring in S. 2 (16) of the Bonus Act, the board would be such an undertaking and, therefore, exempted from the purview of that Act. The further argument is that even otherwise, it is not an etablishment falling under the private sector as defined in S. 2, (15) of the Act. It seems to me that it is unnecessary to examine the latter question for our present purpose. On the former aspect, it has to be seen whether the Board satisfies the definition contained in S. 2 (16 ). The definition reads thus :""establishment in public sector" means an establishment owned, controlled or managed by:- (a) a Government company as defined in S. 617 of the Companies act, 1956 (1 of 1956); (b) a corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by- (i) the Government; or (ii) the Reserve Bank of India; or (iii) a corporation owned by the Government or the Reserve Bank of india. "in my view, it is clear that the Board does not answer to the description of the type of company or corporation specified in that definition. The Board is not a Government company because it has not been incorporated under the Companies Act nor is there any reference to any share capital as such. Though it is a statutory corporation, there has been no contribution of capital as specified therein. The Board is not a Government company because it has not been incorporated under the Companies Act nor is there any reference to any share capital as such. Though it is a statutory corporation, there has been no contribution of capital as specified therein. The Board is an autonomous body entirely controlled by the Coffee Act. It follows therefore, that it is neither owned, controlled nor managed by any of the institutions referred to in S. 2 (16) of the Bonus Act. Hence, I hold that the provisions of Section 32 (x) of the Bonus Act would not be attracted to the case of the Coffee board. Hence all the contentions fail. ( 28 ) BUT before leaving the cases, one other argument advanced on behalf of the respondents deserves to be noticed. It is that the petitioners' challenge to Ex. A. which is merely a note put up by the Chairman for the consideration of the Board and is not tantamount to any action taken by the board, or even the Central Government for that matter, is wholly misconceived. I do not wish to say anything more on this aspect of the case, beyond observing that there is some force in this contention of the respondents. In the result, all these petitions stand dismissed with costs. In each of these cases, the petitioner concerned is directed to pay the costs of the coffee Board and the Union of India (Respondents 1 and 2) in two separate sets. Advocate's fee Rs. 100. 00 each. --- *** --- .