Secretary, Indian Na... v. Industrial Tribunal,..., Kerala High Court, Judgment, Law, casemine.com

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Case Number

Writ Appeal No. 64 of 1964

Attorney(S)

For the Appellant: Government Pleader
For the Respondent: 1st T. C. N. Menon K. R. Panicker
For the Respondent: 2nd

Judges

M.S Menon, C.J
M. Madhavan Nair, J.

Acts

INDUSTRIAL DISPUTES ACT 1947
Indian Companies Act,

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Smart Summary

Factual and Procedural Background

This opinion concerns an appeal by the Secretary, Indian Naval Canteen Control Board, New Delhi, against the dismissal of a petition (O.P No. 347 of 1962) challenging the validity of a preliminary award of the Industrial Tribunal, Calicut and Ernakulam, in Industrial Dispute No. 33 of 1960. The dispute arose from a reference made to the Tribunal by the State Government regarding an industrial dispute involving the Indian Naval Canteen Service at the Naval Base on Willingdon Island. The appellant contested the competence of the State Government to make the reference under the Industrial Disputes Act, 1947, arguing instead that the Central Government was the appropriate authority.

Legal Issues Presented

Whether the appropriate Government competent to make the reference under the Industrial Disputes Act, 1947, in respect of the Indian Naval Canteen Service is the State Government or the Central Government.
Whether the Indian Naval Canteen Service constitutes an industry carried on by or under the authority of the Central Government.
Whether the question of whether the Indian Naval Canteen Service is an industry should be decided in this appeal or left open.

Arguments of the Parties

Appellant's Arguments

The appellant contended that the Central Government, not the State Government, was the appropriate Government to make the reference under the Industrial Disputes Act, 1947, since the Indian Naval Canteen Service was an industry carried on by or under the authority of the Central Government.
The appellant relied on the constitution of the Indian Naval Canteen Service, which established a trust constituted by the Central Government for carrying out certain objects, arguing this established the industry as carried on under Central Government authority.
Reference was made to the Bhilai Steel Project case, arguing that since shares were owned by the Central Government, the project was an industry carried on by or under the authority of the Central Government.
Reference was also made to the Cantonment Board, Ambala v. State of Punjab case, where an industry carried on by a Cantonment Board was held to be under the authority of the Central Government.
The appellant requested that the question whether the Indian Naval Canteen Service is an industry be left open, as was done in the judgment under appeal.

Respondent's Arguments

The opinion does not contain a detailed account of the respondent's legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Abdul Rehman Abdul Gafur v. Paul (Mrs. E), AIR 1963 Bom 267	Interpretation of "carried on by or under the authority of the Central Government" under the Industrial Disputes Act, 1947.	The court relied on this precedent to clarify that industries carried on by trusts or incorporated commercial corporations with independent constitutions are not deemed carried on under the authority of the Central Government, even if the Central Government owns shares or constitutes the trust.
Bhilai Steel Project v. Steel Worker's Union, AIR 1964 SC 1333	Whether an industry is carried on by or under the authority of the Central Government.	The court noted that the issue was not considered in the Bhilai Steel Project case and that the statement about the steel industry being under Central Government control was accepted as a fact rather than a legal determination.
Cantonment Board, Ambala v. State of Punjab, AIR 1961 Punj 416	Whether an industry carried on by a Cantonment Board is carried on by or under the authority of the Central Government.	The court acknowledged this precedent but declined to evaluate its correctness, emphasizing that whether an industry is carried on under Central Government authority is a question of fact dependent on circumstances.

Court's Reasoning and Analysis

The court focused on the interpretation of the phrase "carried on by or under the authority of the Central Government" as defined in Section 2 of the Industrial Disputes Act, 1947. It held that a trust, even if constituted by the Central Government, does not constitute an industry carried on by or under the authority of that government because a trust operates independently with trustees holding title to property, lacking the direct nexus of control characteristic of government authority through servants or agents.

The court relied on the precedent set in Abdul Rehman Abdul Gafur v. Paul, which distinguished between industries carried on directly by the Central Government and those carried on by independent corporations or trusts, even if owned or constituted by the Central Government.

The court rejected the appellant's reliance on the Bhilai Steel Project case, noting that the issue of whether the project was carried on by or under Central Government authority was not adjudicated in that case but assumed for convenience.

The Cantonment Board case was noted but not evaluated, with the court emphasizing that the question is fact-specific.

Finally, the court agreed with the appellant's submission to leave open the question of whether the Indian Naval Canteen Service is an industry, focusing solely on the issue of appropriate Government authority for the reference.

Holding and Implications

The appeal is dismissed.

The court held that the State Government was the appropriate Government to make the reference under the Industrial Disputes Act, 1947, as the Indian Naval Canteen Service is not an industry carried on by or under the authority of the Central Government. The question whether the Indian Naval Canteen Service qualifies as an industry was left open. The appellant was ordered to pay the costs of the 2nd respondent. No new precedent was established; the decision directly affects the parties by affirming the jurisdiction of the State Government in this matter.

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Secretary, Indian Naval Canteen Control Board, New Delhi v. Industrial Tribunal, Ernakulam And Another

1. This is an appeal by the petitioner in O.P No. 347 of 1962 the Secretary, Indian Naval Canteen Control Board, New Delhi against the dismissal of that petition. The petition challenged the validity of a preliminary award of the Industrial Tribunal, Calicut and Ernakulam, in Industrial Dispute No. 33 of 1960.

2. The reference to the Tribunal was by the State Government; and the contention of the appellant which has been negatived both in the preliminary award and the judgment under appeal was that the appropriate Government competent to make the reference under the Industrial Disputes Act, 1947, was not the State Government but the Central Government. The expression “appropriate Government” is defined in Section 2 of the Act. According to that definition the appropriate Government in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government is the Central Government and not the State Government. The sole question for determination, therefore, is whether the Indian Naval Canteen Service, an establishment run by the Indian Naval Canteen Control Board, at the Naval Base on Willingdon Island and whose workmen raised the dispute which has been referred of adjudicated is an industry carried on by or under the authority of the Central Government as contended by the appellant. The constitution of the Indian Naval Canteen Service is Ex. M2 of the exhibits marked by the Tribunal. A perusal of that exhibit leaves no room for doubt that what has been constituted is a trust for carrying out the objects enumerated in Article 2 of that Constitution, and that the establishment with which we are concerned is an establishment commenced and conducted in pursuance of those objects. Article 5 of the Constitution specifically states:

“All property and rights of the Organisation shall be vested in the Indian Naval Canteen Control Board constituted as follows and held by it on trust for the objects of the Organisation.”

3. We are not prepared to say that an industry carried on by a trust, even though the trust has been constituted by the Central Government, is an industry carried on by or under the authority of that Government. The expression “carried on by or under the authority of the Central Government”, as we understand it, involves a direct nexus with the industry through servants or agents a nexus which cannot co-exist with the concept of a trust which gives the trustee the title to the trust property and which precludes a termination, as in the; case of an agency, on the death or at the will of either party.

4. In Abdul Rehman Abdul Gafur v. Paul (Mrs. E), 1962-2 Lah LJ 693 : (AIR 1963 Bom 267) the High Court of Bombay had to consider whether Mazgaon Dock Ltd., Bombay, was an industry carried on by or under the authority of the Central Government. The judgment summarised the contention on behalf of the-petitioners as follows:

“Mr. Sule for the petitioners contends that because the Union of India and/or the Central Government is the owner of the whole share capital of the company, it is abundantly clear that the company and/or the industry is carried on by or under the authority of the Central Government. He also contends that the provisions in the articles of association of the company make it abundantly clear that the industry is carried on by the Central Government. Even if that is not so, he contends that in any event it is clear that the industry is carried on under the authority of the Central Government”; and said:

“The phrase ‘under the authority of the Central Government’ contained in S. 2(a)(1) must mean and is intended to apply to industries carried on directly under the authority of the Central Government. Industries which are carried on for their own purposes by incorporated commercial corporations which are governed by their own constitution, as authorised by Indian Companies Act, cannot be described as carried on under the authority of the Central Government. The obvious reason to support the above finding is that these corporations are independent legal entities and run the industries for their own purposes. Even when the Central Government controls these corporations, their industries are worked under the authority of their own constitutions or charters.”

5. Counsel for the appellant submitted that the Bhilai Steel Project is a project of the Hindustan Steel Limited, the shares of which are owned by the Central Government, and that the Supreme Court has held in Bhilai Steel Project v. Steel Worker's Union, Bhopal, 1964-1 Lab LJ 377 : (AIR 1964 SC 1333) that the project is an industry carried on by or under the authority of the Central Government. A perusal of the decision, however, shows that the question as to whether the project was an Industry carried on by or under the authority of the Central Government was not allowed to lie raised at all and was not considered in that case. The following passage from the judgment makes the position clear:

“It is not open to dispute before us that the steel industry at Bhilai was an industrial establishment under the control of the Central Government. There was a faint attempt on the part of the learned counsel, who appeared before us on behalf of the respondents, to suggest that the steel industry at Bhilai was act under the control of the Central Government. No such point appears to have been raised either before Sri Sanyal or the industrial court. So, we did not permit the respondents to raise this point for the first time here. It may also be mentioned in this connection that in the very notification made by the Madhya Pradesh Government on 22 July 1958, that Government made the definite statement that the steel industry at Bhilai was carried on under the authority of the Central Government. We think it reasonable to presume for the purpose of these appeals that this — statement made by the Government of Madhya Pradesh was correct.”

6. Counsel for the appellant also drew our attention to Cantonment Board, Ambala v. State of Punjab, (1961-1962) 20 FJR 6 : (AIR 1961 Punj 416) a decision of the Punjab High Court, wherein it was held that an industry carried on by a Cantonment Board established under the Cantonment Act, 1924, was an industry carried on by or under the authority of the Central Government.

7. We are not concerned with such a board and we consider it unnecessary to evaluate the correctness or otherwise of that decision. The question as to whether a particular industry is carried on by or under the authority of the Central Government is essentially a question of fact depending on the circumstances of each case.

8. Counsel for the appellant submitted that the question whether the Indian Naval Canteen Service at the Naval Base on Willingdon Island even if it is carried on by or under the authority of the Central Government is an industry or not should be left open by us as has been done in the judgment under appeal. We do so.

9. In the light of what is stated above the appeal fails and is hereby dismissed. The appellant will pay the costs of the 2nd respondent, advocate's fee Rs. 150.

KI/DHZ

10. Appeal dismissed.

Secretary, Indian Na... v. Industrial Tribunal,...