Shambhu Prasad Singh, J.:— Questions arising for decision in these four applications under Articles 226 and 227 of the Constitution of India being common, they have been heard together and are being disposed of by this order. The petitioners of all these applications have prayed for issuance of an appropriate writ quashing the seniority lists (Annexure 6 to each of these applications) prepared by the Bokaro Steel Limited whose Managing Director is respondent No. 1 to these applications.
2. The Bokaro Steel Limited and the Hindustan Steel Limited, whose Chairman is respondent No. 2 to these applications are two public sector undertakings of the Government of India which owns 100 per cent shares thereof. The petitioners of these applications were originally appointed under the Hindustan Steel Limited on various dates, mentioned against their names in Annexures 6, and posted at Bhilai, Rourkela, Durgapur and other places. In the years 1967-1968 they joined under the Bokaro Steel Limited. According to them, they were transferred from one concern to another, the employer being the same, i.e, the Union of India, and these were not cases of fresh appointments. They were to get all the advantages of their service under the Hindustan Steel Limited on their transfer to the Bokaro Steel Limited but in the lists (Annexures 6) their seniority has been determined with reference to the date of their joining the Bokaro Steel Limited and those who joined the Bokaro Steel Limited directly after their joining the Hindustan Steel Limited have been placed above them. It has been contended on their behalf that these lists have been arbitrarily prepared and they violate the fundamental right of equality of opportunity in matters relating to appointment guaranteed to the petitioners who are all citizens of India under Article 16 of the Constitution. It has been urged on behalf of respondent No. 1, that the Bokaro Steel Limited is not State, the petitioners while serving under it do not hold any office under the State and as such no question of violation of any fundamental right under Article 16 of the Constitution arises in this case. It has further been contended that the right claimed by the petitioners is not derived from Statute but is based on contract and, therefore, even if it be assumed that the Bokaro Steel Limited is State, no writ against it can be issued in favour of the petitioners for enforcement of a contractual right. Learned Advocate General who has appeared for respondent No. 1 has also contended that the seniority lists (Annexures 6) have been prepared rationally according to rules (not statutory) framed by the Directors of the Bokaro Steel Limited and they do not infringe any right of the petitioners.
3. The main question which arises for decision in these applications and which has been argued at some length by learned counsel for both the parties is whether the petitioners hold any office under State and thus entitled to the fundamental right of equality of opportunity in the matter of appointment guaranteed to a citizen under Article 16 of the Constitution of India. Mr. B.C Ghose for the petitioners has contended that the Bokaro Steel Limited is State as it is an authority within the meaning of Article 12 of the Constitution of India. In the alternative, he has also contended that even if it is not an authority and, therefore, not State within the meaning of Article 12 of the Constitution, as the Union of India owns 100 per cent shares in the Bokaro Steel Limited and it is directly under the Ministry of Iron and Steel of the Government of India and administered under the direction of that department, the entire body of the Board of Directors being nominated by the Government of India, the petitioners while serving under it hold an office under the Government of India which is undoubtedly the State. Both Articles 12 and 16 are in Part III of the Constitution of India dealing with fundamental rights and Article 12 defines “State” as follows:—
“In this Part, unless the context otherwise requires, ‘the State’ includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.”
4. Various High Courts of this country were inclined to apply the principle of ejusdem generis while interpreting the expression “other authorities” in Article 12 of the Constitution (See University of Madras v. Shantha Bai, AIR 1954 Mad 67, B.W Devadas v. Karnatak Engineering College, AIR 1964 Mys 6 and Kishan Gopal Ramchand Sharma v. Punjab University, AIR 1966 Punj 34). The rule laid down in the aforesaid decisions, however, did not find favour with their Lordships of the Supreme Court in Rajasthan State Electricity Board, Jaipur v. Mohan Lal, AIR 1967 SC 1857. It was held by the Supreme Court in that case that the High Courts fell into an error in applying the principle of ejusdem generis when interpreting the expression “other authorities” in Article 12 of the Constitution. It was further held that the Electricity Board, Rajasthan, was an authority and thus State within the meaning of Article 12 of the Constitution of India. Mr. Ghose has strongly relied on this decision of the Supreme Court in support of his contention that the Bokaro Steel Limited is an authority and thus State.
5. Bhargava, J., speaking for himself, Subba Rao, C.J and Shelat and Mitter, JJ., relied on the meaning of the word “authority” given in Webster's Third New International Dictionary viz., ‘a public administrative agency or corporation having quasi-governmental powers and authorised to administer a revenue-producing public enterprise” and held that the expression “other authorities” in Article 12 would include all constitutional or statutory authorities on whom powers are conferred by law, such as the Electricity Board, Rajasthan. Shah, J., concurred to the majority decision that Electricity Board, Rajasthan, was authority and thus State, but found himself unable to agree to the dictum that every constitutional or statutory authority on whom powers are conferred by law was “other authority” within the meaning of Article 12, inasmuch as, the expression “authority” in its etymological sense means a body invested with power to command or give an ultimate decision, or enforce obedience, or having a legal right to command and be obeyed.
6. In the case before us it is not disputed that no powers have been conferred on the Bokaro Steel Limited by law so as to make it a constitutional or statutory authority. The case before us, therefore, is not covered directly by the decision of the Supreme Court in Rajasthan Electricity Board's case. But Mr. Ghose has contended that the Borkaro Steel Limited does possess quasi-governmental powers and, therefore, according to a meaning assigned to the word ‘authority’ in Webster's Third New International Dictionary which was approved by their Lordships of the Supreme Court, the Bokaro Steel Limited is an authority and thus State within the meaning of Article 12 of the Constitution. According to Mr. Ghose, the Bokaro Steel Limited not only possesses quasi-governmental powers but really it is a department of the Government of India and thus possesses governmental powers. On the other hand, according to the learned Advocate-General, the Bokaro Steel Limited is a company incorporated and registered under the Indian Companies Act and does not possess any governmental or quasi-governmental power.
7. The petitioners in paragraphs 19 of their petitions have asserted that both the Hindustan Steel Limited and the Bokaro Steel Limited are public sector undertakings and under the managing control of the Government of India. In paragraph 20 of the petitions it has been stated that these undertakings are directly under the Ministry of Iron and Steel of the Government of India and they are administered under the direction of that department. The appointments and postings in superior posts in both the undertakings are done by the Government of India mostly from amongst its own officers. Paragraph 21 of the petitions states that the Ministry of Iron and Steel of the Government of India makes superior appointments in both the undertakings which are treated as part of the same Government of India, industrial Establishment.
8. Paragraph 22 of the petitions says that the entire body of the Board of Directors of both the undertakings are nominated by the Government of India and none of them is a share-holder and as such, they are not ordinary incorporate limited companies under the Indian Companies Act. On the basis of the aforesaid allegations, paragraph 23 of the petitions concludes that the petitioners hold civil posts under the Union of India. The reply to the allegations made in the aforesaid paragraphs of the petitions is to be found in paragraph 14 of the show cause petition of respondent No. 1 in each of the cases. The paragraph runs as follows:—
“That with respect to the statements made in paragraphs 19, 20, 21 and 23 of the writ application, it is submitted that Bokaro Steel Limited is a Company incorporated under the Indian Companies Act, 1956 and the management is in the hands of Board of Directors and the fact that the President of India owns most of the shares of the Company does not attract Article 16 of the Constitution nor the Rules and Regulations applicable to Government servants.”
9. According to Mr. Ghose, paragraph 14 of the show cause petitions does not sufficiently deny that the Bokaro Steel Limited is a department of the Government of India. I am not inclined to accept this contention, inasmuch as, paragraph 14 of the show cause petition in each of these cases does assert that the management is in the hands of Board of Directors which amounts to a denial of the assertion made by the petitioners that the Bokaro Steel Limited is administered under the direction of the Ministry of Iron and Steel of the Government of India. What is not denied in paragraph 14 of the show cause petitions is the allegation in paragraph 22 of the applications that the Board of Directors are nominated by the Government of India and none of them is a shareholder.
10. Can it be held, on the aforesaid pleadings of the parties, that the Bokaro Steel Limited is a department of the Government of India or otherwise an authority within the meaning of Article 12 of the Constitution possessing governmental or quasi-governmental powers so as to make it “State”? It is not in dispute that the Bokaro Steel Limited is a company incorporated and registered under the Indian Companies Act and it has to be presumed that it has got a separate entity from the owner or owners of its shares. Therefore, ordinarily it cannot be held to be a department of the Union of India or possessing Governmental or quasi-governmental powers so as to make it an authority and thus “State” within the meaning of Article 12 of the Constitution. Mr. Ghose has, however, requested us to pierce the veil by looking to the materials on the record and find out whether it is in fact administered by the Ministry of Iron and Steel of the Government of India so as to make it a department of the Government of India. Is it permissible to us to pierce the veil?
11. Recently a similar question arose for decision before the High Court of Calcutta in the case of Sunil Kumar Debnath v. Mining and Allied Machinery Corpn. Ltd., AIR 1968 Cal 322. The learned Single Judge who heard the application under Article 226 of the Constitution in the first instance rejected it summarily on the ground that the respondent appeared to be a Government company which was neither the Government nor statutory body and so not amenable to the writ jurisdiction. There was a Letters Patent Appeal which was heard by D.N Sinha, C.J and A.K Mukherjee, J. After considering both Indian and English authorities on the question, Sinha, C.J, who delivered the judgment concluded as follows—
“At the present moment, however, regard being had to the state of the authorities, I am of opinion that, as pointed out in 1950-1 KB 18, * a Court was not entitled to pierce the veil of corporate entity and to examine the reality underneath. That in my view would be a matter of legislation and not of judicial interpretation. As at present advised, I must hold that a joint stock company is like a private individual except in some restricted cases, namely when the company is a public utility company, and its employees are not civil servants and are not entitled to the protection offered by Article 311 of the Constitution. Therefore, in such cases a writ application under Article 226 of the Constitution does not lie for the purposes of protecting service conditions.”
12. It is nowhere asserted in the petitions that the Bokaro Steel Limited is a public utility company. Therefore, it does not come within the exception referred to by the learned Chief Justice of the High Court of Calcutta.
13. In Subodh Ranjan Ghosh v. Sindri Fertilizers and Chemicals Ltd., AIR 1957 Pat 10, a Bench of this Court found that the Sindri Fertilisers and Chemicals Ltd. was completely owned by the Union Government, that the Directors of the Company were appointed by the President who was also authorised to remove any of them from his office in his absolute discretion, that the President was authorised to issue such directives as he may consider necessary in regard to the conduct of the business of the company and that under one of the clauses of its Article a duty was imposed upon the Directors to give immediate effect to the directive so issued by the President. But in spite of these findings, it held that the company had an independent legal entity and an independent legal existence and it could not be said to be a department of the State Government or its delegate or agent. Ramaswami, C.J (as he then was), Raj Kishore Prasad, J., concurring, further held that the Court was not entitled to pierce the veil of corporate entity and to examine the reality beneath. That decision is binding upon us. Mr. Ghose has not been able to show any decision of the Supreme Court or of a larger Bench of this Court which has taken a view contrary to the decision in Subodh Ranjan Ghosh's case, AIR 1957 Pat 10.
14. Mr. Ghose has placed reliance on the decision in Guru Gobinda Basu v. Sankari Prasad Ghosal, AIR 1964 SC 254 where the appellant who was holding an office of profit under the Hindustan Steel Limited as an auditor was held to be disqualified for seeking election to the House of the People on the ground that he was holding an office of profit under the Government. As it appears from the facts of that case, the appellant was appointed as an auditor of the Hindustan Steel Limited by the Central Government. While distinguishing the decision in the case of Abdul Shakur v. Rikhab Chand, AIR 1958 SC 52 it was pointed out that one of the facts which is decisive in finding out whether a person holds an office of profit under the Government of India or not is “the power of the Government to appoint a person to an office of profit or to continue him in that office or to revoke his appointment at their discretion”. Had the appellant of that case been appointed by the Directors of the Hindustan Steel Limited, and not by the Central Government, as it appears from the ratio of the decision in Guru Gobinda Basu's case, AIR 1964 SC 254 their Lordships would not have held him disqualified from seeking election to the House of the People on the ground that he was holding an office of profit under the Government. It would thus appear that the mere association of the appellant of that case with the Hindustan Steel Limited as its auditor would not have disqualified him. The decision in this case is not of any real help to the petitioners and it nowhere can be said to have affected the authority of the decision of this Court in the case of Subodh Ranjan Ghosh, AIR 1957 Pat 10.
15. The other case on which Mr. Ghose has strongly relied is the case of S.K Pandey v. State of Bihar, 1967 BLJR 58. In that case a writ was issued against the Managing Director, Bihar State Small Industries Corporation Limited on the ground that the order of dismissal of the petitioner from the service was invalid having been passed in contravention of Article 311(2) of the Constitution of India. Mr. Ghose has maintained that according to the Bench decision in S.K Pandey's case, 1967 BLJR 58 a corporate body was amenable to the writ jurisdiction of this Court. As the judgment is brief and does not state all the facts, we called for the original records of that case and on examination of the same found that the petitioner was appointed by the State of Bihar in the department of Industries and Mines on the recommendation of the State Public Service Commission and thereafter his services were transferred to the Bihar State Small Industries Corporation Ltd.
16. The petitioner of that case being a State servant could not have been dismissed in contravention of the provisions of Article 311(2) of the Constitution. Really the petition in that case could have been allowed even on the ground that the Managing Director, Bihar State Small Industries Corporation Ltd., not being the appointing authority of the petitioner could not have dismissed him. In the instant case, no materials have been placed before us to show that any of these petitioners were not appointed by the Directors of the Hindustan Steel Limited or the Bokaro Steel Limited, but by the Central Government. The decision in S.K Pandey's case, 1967 BLJR 58 also, therefore, is of no real help to the petitioners.
17. For the foregoing reasons, I am not inclined at the present moment to hold that this Court is entitled to pierce the veil of corporate entity and to examine the reality underneath contrary to the decisions in Tamlin's case, 1950-1 KB 18, Sunil Kumar's case, AIR 1968 Cal 322 and Subodh Ranjan Ghosh's case, AIR 1957 Pat 10 and hold that the Bokaro Steel Limited is an authority and thus ‘State’ within the meaning of Article 12 of the Constitution so as to attract the provisions of Article 16 of the Constitution.
18. It has been conceded by Mr. Ghose for the petitioners that if it is held that Article 16 of the Constitution does not apply to these cases, they must fail. In that view of the matter, it is not necessary to examine the second and third contention of the learned Advocate-General, namely, that as the right claimed by the petitioners is not derived from the statute but is based on contract, no writ can be issued in their favour and that the seniority lists have been prepared rationally according to rules (not statutory) framed by the Directors of the Bokaro Steel Limited and they do not infringe any right of the petitioners. I have refrained from expressing any opinion on these two points also because we have been informed that a suit filed by some of the direct recruits to the Bokaro Steel Limited involving these questions is pending and expression of opinion on these points by us is bound to prejudice one or the other of the parties. The petitioners in none of these applications are entitled to issuance of a writ against the respondents and their applications are dismissed. In the circumstances of the cases, there will be no order as to costs.
S.N.P Singh, J.:— I agree.
19. Petitions dismissed.