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Allahabad High Court · body

1990 DIGILAW 613 (ALL)

Brahma Dayal Mehta v. Senior Personnel Executive, Indian Drugs

1990-06-29

D.S.SINHA, S.K.DHAON

body1990
JUDGMENT S.K.Dbaon, J. 1. The Indian Drugs and Pharmaceuticals Limited (hereinafter referred to as the I. D. P. L) has a unit situated in Virbhadra (Rishi- kesh) District Dehradun. I. D. P. L. runs an Intermediate College Virbhadra (hereinafter referred to as the College). On or before 28th April, 1988, the petitioner was the Principal of the College. His date of birth is 1st October, 1930. On 28th April, 1988, the Senior Personnel Executive of the I. D. P. L. informed the petitioner that he will retire from the service of the Company on attaining the age of superannuation on 30th September, 1988. The legality of this communication is being impugned in the present writ petition. 2. Affidavits have been exchanged between the parties, although the petition has not been formally admitted as yet. However, with the consent of the counsel for the parties we heard this petition with a view to finally dispose of the same, We are, therefore, doing so. I. D. P. L. is a Government of India undertaking incorporated under the Companies Act, 1956; The Central Government has hundred percent shares in it. The Company has various unit all over the country and one such unit is situated at Virbhadra (Rishikesh). The entire control over the Company is of the Ministry of Companies, Government of India, and the entire investment is of the Central Government. The College is recognised under section 2 (d) of the U. P. Intermediate Education Act, 1921 (hereinafter referred to as the Act) for the purposes of preparing candidates to the examinations of the Board. The State Government does not give any grant- in-aid to the College. There is a duly approved scheme of administration prepared under the provisions of the Act and the Regulations made thereunder and the College is run in accordance with the said scheme. 3. Annexure I to the writ petition is a photo stat copy of the communication dated 17th June, 1987, of the Regional Deputy Director of Education, Garhwal Region, to the Secretary/Principal of the College wherein it is mentioned that the Deputy Director has accorded approval to the scheme of administration and a copy of the scheme is being forwarded. The scheme is before us. We are satisfied that the same is in accordance with the provisions of the Act and the Regulations framed thereunder. The scheme is before us. We are satisfied that the same is in accordance with the provisions of the Act and the Regulations framed thereunder. A perusal of the various clauses of the scheme of administration makes it clear that the terms and conditions of the service of the Principal of the College shall be those as laid down under the various provisions of the Act and the Regulations framed thereunder. It is also provided that in the event of conflict between the provisions of the Act and the Regulations framed thereunder or any other condition of service provided for elsewhere, the terms as laid down under the Act and the Regulations will operate. Annexure II to the writ petition is a photostat copy of the communication dated 1st January, 1972, issued to the petitioner whereby he was informed that he had been appointed as Principal. It was specifically stated therein : "Your service conditions will be in accordance with the Provisions of Education (Amendment) Act, 1958 of the Government of U. P. and on the following terms and conditions :" There are other documents on record to indicate that the petitioner was duly appointed as Principal on the recommendation of the Selection Committee as envisaged by the Act and the Regulations framed thereunder. 4. It is not in dispute that Regulation 21 as contained in Chapter III of the Regulations framed under the Act provides that the age of retirement of a Principal is 60 years, it is also not in dispute that the age of retirement of an employee of IDPL as fixed under the relevant Rules of the Company is 58 years. The short question is whether the petitioner is entitled to continue as a Principal of the College, on the basis as Regulation 21, till he attains the age of 60 years. Section 16-G of the Act, inter alia, provides that every person employed in a recognised institution shall be governed by such conditions of service as may be prescribed by Regulations and any agreement between the management and such employee, in so far as it is in-consistent with the provisions of the Act or with the Regulations, shall be void. It is an admitted position that the College is a recognised institution within the meaning of the Act. It is an admitted position that the College is a recognised institution within the meaning of the Act. Realising the rigor of the provisions as contained in Section 16G, the only argument advanced on behalf of I. D. P. L. is that Section 16-G will not apply to the employees of the College. This submission is based entirely on the provisions of Section 16-H of the Act. They read J- "16-H. Exemption of certain classes of Institutions from the operation of certain Sections*-(1) The provisions of Section 16-A, 16-B, 16-C, subsection (2) to sub-section (13) of Section 16-D and Sections 16-E 16-F.and 16-G shall not apply to recognised institutions maintained by the State Government or the Central Government. (2) In the case of recognised institutions maintained by a local body, the State Government may declare that all or any of the provisions referred to in sub-section (1) shall not apply or shall apply subject to such alterations, modifications or additions as it may make the provisions, if any, so made applicable, shall have effect not withstanding any thing inconsistent therewith contained in any other law for the time being in force." 5. Learned counsel for the parties have made their submissions on the footing that I. P. D. L. is an instrumentality of the State for the purposes of Part III of the Constitution. We, therefore, do not consider it necessary to record any finding as to whether,?I. D. P. L. is performing any governmental function. We are, therefore, left with the limited question as to whether the College is maintained by the Central Government. 6. Sri K.N. Tripathi, learned counsel for the petitioner, has submitted that if the Legislature intended to exempt a recognised institution maintained by -the instrumentality of either the Central Government or the State Government from the purview of Section 16-G, it would not have enacted subsection (2). He further submits that an interpretation which renders a provision superfluous or redundant should be eschewed. There is force in this submission. Sub-section (1) of Section 16-G, as it now stands, had substantially the same contents when it was introduced initially into the Act by U. P. Act No. 35 of 1958. By that Act Section' 16-H was also inserted. He further submits that an interpretation which renders a provision superfluous or redundant should be eschewed. There is force in this submission. Sub-section (1) of Section 16-G, as it now stands, had substantially the same contents when it was introduced initially into the Act by U. P. Act No. 35 of 1958. By that Act Section' 16-H was also inserted. Article 12 of the Constitution provides and always provided that "the State" includes, inter alia, all local or other authorities within the territory of India or within the control of the Government of India. Article 366 did not contain the definition of local authority. However, Article 367 mandates, inter alia, that unless the context otherwise requires, the General Clauses, Act, 1897 shall apply for the interpretation of the Constitution. In sub-section (31) of Section 3 of the General Clauses Act, 1897 "Local authority" is defined to mean "a municipal committee, a district board...........or other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund." The Legislature of Uttar Pradesh was aware of Article 12. It was also aware of the definition of local authority as contained in the General Clauses Act, 1897. Yet in subsection (2) of Section 16. it empowered the State Government to exempt a recognised institution maintained by a local body from the operation of all or any of the provisions as contained in sub-section (1) of section 16-H. It, therefore specifically provided for the exemption of an instrumentality of a State in sub-section (2). It is thus clear that for the purposes of Section 16-H it drew a distinction between the State Government and its instrumentality and between the Central Government and its instrumentality. In its wisdom, it did not exempt a recognised institution maintained either by the instrumentality of the State or of the Central Government from the operation of Section 16-G and other provisions referred to in sub-section (1) of Section 16-H. It did so designedly and purposely. In its wisdom, it did not exempt a recognised institution maintained either by the instrumentality of the State or of the Central Government from the operation of Section 16-G and other provisions referred to in sub-section (1) of Section 16-H. It did so designedly and purposely. Therefore, it is evident that an instrumentality, either of the State Government or of the Central Government, cannot assert that a recognised institution maintained by it is exempt from the provisions of Section 16-G and the other provisions referred to in subsection (1) of Section 16-H. The consequence is that the provisions of Section 16-H will apply to a recognised institution maintained by an instrumentality of the Central Government. Sri B. D. Agarwal contends that the College will be deemed to be maintained by the Central Government for the purposes of sub-section (1) of Section 16-H. The word "maintained" has not been defined in the Statute under consideration. In the Shorter Oxford English Dictionary the following meaning, among others, is given to the word "maintained" j "to keep in being; to preserve unimpaired; to pay or furnish the means of keeping tip of; to keep supplied or equipped; to keep in repair" In the context and setting of Section 16-H the word "maintained", in our opinion, should be given the meaning : to pay or furnish the means of keeping up of. Therefore there can be no difficulty in taking the view that the duty to maintain an institution shall include the duty of da-fraying all the expenses of maintaining the institution. Again, maintenance of an institution in Section 16-H is not confined to financial control alone. Financial control may be one of the incidents of the maintenance of an institution, but there is not the end- all. In Section 16-H the ideal appears to be that an institution should be directly maintained by the Central Government or the State Government. There should be a rational relationship between the State Government or the Central Government and the institution. 7. Section 2 (f) of the Act "State Government" is defined to mean "The Government of Uttar Pradesh." The same definition is to be found in Section 4 (42-C) of the U. P. General Clauses Act. There should be a rational relationship between the State Government or the Central Government and the institution. 7. Section 2 (f) of the Act "State Government" is defined to mean "The Government of Uttar Pradesh." The same definition is to be found in Section 4 (42-C) of the U. P. General Clauses Act. Therefore, so far as recognised institutions maintained by the State Government are concerned, they shall, for the purposes of Section 16-H be deemed to be recognised institutions maintained by the Government of Uttar Pradesh. If an institution is to be maintained by the Government of Uttar Pradesh, it is implicit that the maintenance of such an institution by the instrumentality of the State Government stands completely excluded. The expression "Central Government" is not defined in the Act. The definition of the Central Government as contained in the General Clauses Act is not helpful at all to resolve the controversy. However, to us, it appears that the Legislature of Uttar Pradesh in Section 16-H has used the expression "Central Government" in the same sense in which it uses the expression "State Government;" Therefore, the Legislature meant to convey the idea that the recognised institutions should be maintained by the Government of India so as to bring them within the ambit of Section 16-H. In this behalf, we find a clue in Article 12 of the Constitution. There the expression "Government of India" is used twice. In Article 77 (3) also we find that the expression. "Government of India" has been used. Therefore, in our opinion, it will be logical to take the view that in Section 16-H the Legislature intended that the recognised institutions should be maintained by the Government of India. 8. In Western Coal Fields Limited v. Special Area Development Authority Colaba, 19 1 SCC 125 it is held that even though the entire share capital of Companies has been subscribed by the Government of India, it cannot be predicated that companies themselves are owned by the Government of India. The Companies which are incorporated under the Companies Act, have a corporate personality of their own, distinct from the Government of India. The lands and buildings are vested in and owned by the Companies ; the Government of India only owns the share capital. The Companies which are incorporated under the Companies Act, have a corporate personality of their own, distinct from the Government of India. The lands and buildings are vested in and owned by the Companies ; the Government of India only owns the share capital. IN this case reference is made, among others, to the case of Heavy Engineering Mazdoor Union v. State of Bihar, AIR 1970 SC 82 . IN this case it is held that a Company incorporated under the Companies Act and the entire share holding of which is contributed by the Central Government (a Government Company) does not carry on an industry under the authority of the Central Government within the meaning of Section 2 (a) of the Industrial Disputes Act, 1947. It is emphasised that an incorporated company has a separate existence and law recognises it as a jurisdiction person separate and distinct from its members. The mere fact that the entire share capital of the Company is contributed by the Central Government and the fact that all its shares are held by the President and certain Officers of the Central Government do not make any difference to that position. Strong reliance is placed by Sri B. D. Agarwal on the decision of the Supreme Court in the case of C. V. Raman v. Management of Bank of India, (1988) 3 SCC 105 . In this case the controversy is whether the Nationalised Banks and the State Bank of India are establishments under the Central Government within the meaning of Kerala shops Acts and the Andhra Pradesh Shops Act. Section 4 of the said Acts provided for exemptions of certain persons and establishments. Clause (c), which has been interpreted in this case, reads "(c) establishments under the Central and State Governments, local authorities, the Reserve Bank of India, a railway administration............and cantonment authorities." It has been held that for the purposes of the exemption under Section 4 the State Bank and the Nationalised Banks are establishments under the Central Government Sri Agarwal laid considerable emphasis on paragraph 11. In this paragraph their Lordships are commenting on a portion of a passage in Ajay Hasia's case. In this paragraph their Lordships are commenting on a portion of a passage in Ajay Hasia's case. This portion reads :- "It is undoubtedly true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the government. It is really the government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the government." Their Lordships have taken the view that even though the State Bank of India and the nationalised banks may not be owned as such by the Centra'. Government and its employees may not be the employees of the Centra1 Government they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks. 9. Assuming that the Central Government is in deep and pervasive control over I. D. P. L. and assuming I. D. P. L. is under the Central Government, it does not follow that the College, which is run and financed by the I. D. P. L. is maintained by the Central Government or the Government of India. On the reasoning of the Supreme Court, as contained in paragraph 12, any local body in this State will fell under the expression "under the State Government". Yet in sub-section (2) of Section 16-H such a local body has been given a different treatment from the State Government as in sub-section (1) of Section 16-H. In sub-section (1 of Section 16-H, as we have already indicated, an exemption to an Institution maintained by the State Government is automatic and direct; whereas in sub-section (2) the exemption to an institution maintained by a local body is not automatic. It is dependent upon the declaration of the State Government. It is dependent upon the declaration of the State Government. We, therefore, reiterate that even if I. D P. L. is under the Central Government, the College run by it will not be considered to be maintained by the Central Government for the purposes of Section 16-H. 10. In the last resort, Sri Agarwal contends that the petitioner is, in fact, trying to enforce a contractual obligation by means of this writ petition and, thereof, Article 226 is not available to him. This argument is to be rejected as stated. The College is a recognised institution under the Statute. It is run in accordance with the scheme of administration which has got to be prepared and approved compulsorily as enjoined by Section 16-A of the Act and the other provisions. Section 16-G of the Act gives statutory recognition to certain service conditions Regulations framed under the Act, particulary Regulation 21, confer a legal right upon the petitioner to continue in the college till he attains the age of 60 years. Section 16-G also takes care of any provision in a contract which runs contrary to the statutory terms of contract as laid down in the provisions of the Act and the Regulations. It makes it clear that any terms of contract inconsistent with the terms of contract as provided for in the statute will be void to the extent of repugnancy. Correspondingly, the Committee of Management of an institution is enjoined to act in accordance with the statute. Therefore, there can be no escape from the conclusion that an aggrieved employee, including a principal, will be fully entitled to invoke the provisions of Articles 226 of the Constitution. A faint submssion has been made that the petitioner having taken advantage of the higher emoluments given to him and the other advantages of the service, which are not available to the Head of the institutions of other recognised Colleges, is estopped from asserting his legal right to continue in employment till he attains the age of 60 years. This submission does not impress us. Provisions of the Act and the Regulations framed thereunder stipulate the payment of minimum salary. They also stipulate certain facilities which must be provided by an institution. They do not prohibit an institution from paying to its employees, including its principal, higher salary or better emoluments. This submission does not impress us. Provisions of the Act and the Regulations framed thereunder stipulate the payment of minimum salary. They also stipulate certain facilities which must be provided by an institution. They do not prohibit an institution from paying to its employees, including its principal, higher salary or better emoluments. They also do not prohibit any institution from providing for better service conditions. However, any service condition, which may act to the determent of an employee and which may be in conflict with the statutory terms and conditions of service, must give way to the conditions which have been guaraneed by the Statute. 11. This petition succeeds and is allowed. The Communication dated 28th April, 1988 of the Senior personal Executive I. D. P. L., the respondent No- 1, is quashed The respondents are commanded not to retire the petitioner from service as principal of I. D. P. L. Inter College Virbhadra till he (the petitioner) attains the age of 60 Years. 12. The petitioner shall be entitled to his costs. Petition allowed.