JOSE SABESTIAN Vs. COMPUTER MAINTENANCE CORPORATION LIMITED
LAWS(APH)-1992-6-19
HIGH COURT OF ANDHRA PRADESH
Decided on June 16,1992

JOSE SABESTIAN Appellant
VERSUS
COMPUTER MAINTENANCE CORPORATION LTD. Respondents


Cited Judgements :-

DEPUTY DIRECTOR EMPLOYEES STATE INSURANCE CORPORATION HYDERABAD VS. CMC LIMITED [LAWS(APH)-2010-8-115] [REFERRED TO]


JUDGEMENT

- (1.)The petitioners in this Writ Petition claim that they were appointed at Data Entry Operators on a permanent basis after interview, by the 1st respondent i.e., the Computer Maintenance Corporation Limited and that after they worked for two years continuously, they were removed suddenly in violation of the provisions of Section 40 of the Andhra Pradesh Shops and Establishment Act, 1966 (hereinafter referred to as 'the Act') and the Andhra Pradesh Shops and Establishments Rules, 1968 and other laws. Against the said termination of service, the petitioners 1 to 3 herein preferred appeals before the 2nd respondent herein i.e., the Authority under Section 41 of the Act, which were numbered as S.E. Nos. 265, 266 and 264 of 1982 respectively and by common order dated 30/11/1982 the 2nd respondent allowed the said appeals directing the 1st respondent
"to reinstate the petitioners back into services forthwith together with 30% of the average wages earned by the petitioners during their tenure of employments as back wages for the period the petitioners were kept out of employment".
The 2nd respondent further directed that the petitioners shall enjoy the continuity of their service. Against the said common order of the 2nd respondent in S.E. Nos. 264, 265 and 266 of 1982, the 1st respondent herein preferred appeals before the 3rd respondent i.e., the Labour Court, Andhra Pradesh, Hyderabad and the same were numbered as Second Appeal Nos. 13, 14 and 15 of 1983 respectively; the petitioners herein also preferred appeals before the 3rd respondent and the same were numbered as Second Appeal Nos. 20, 21 and 22 of 1983 and by common judgment dated 27/03/1986 the 3rd respondent dismissed all the said Second Appeals. In the present Writ Petition, the petitioners seek a Writ of Certiorari for modifying the common order of the 2nd respondent in the said S.E. Nos. 264 to 266 of 1982 dated 30/11/1982 and the common judgment of the 3rd respondent in S.A. Nos. 13 to 15 and 20 to 22 of 1983 dated 27/03/1986 by directing the 1st respondent to reinstate the petitioners in service as regular employees with continuity of service with full back wages and all other attendent benefits with penalty and interest and costs, etc.
(2.)It is not necessary to go further into the details of the facts of the matter because the learned counsel for the 1st respondent raised on objection as regards the applicability of the Act to the 1st respondent in view of sub-section (1) of Section 64 of the Act which so far as it is relevant is as follows :
"64(1) : Nothing in this Act shall apply to : (a) ........ ......... .......... (b) establishments under the Central and State Governments, local authorities, the Reserve Bank of India, a railway administration operating any railway as defined in clause (2) of Article 366 of the Constitution authorities : (c) ..... ....... ........ (d) ..... ...... ...."
The learned counsel submits that the 1st respondent is an establishment under the Central Government in as much as it is a Government Company fully owned and controlled by the Central Government. In paragraphs 8 and 9 of the counter affidavit filed on behalf of the 1st respondent, it is stated as follows :-
"The company though registered under Companies Act, it is under the control of Central Government. It carries on business as per the directions issued by the Central Government from time to time. It has no discretion of its own to start or enter business. All the shares are held by the Central Government or its nominees and directors are appointed by the President and they are also removable by the President. No one can remain as a director of the company except by orders of the Central Government and they can be removed at any time. The business is carried on as per the directions and so also their functions and they are bound by directions issued by the Central Government from time to time regarding the type of business which is to be done, the manner in which it should be done and how business should be carried on. Under those circumstances it is clear that the company is under the Central Government. When once it is under the Control of Central Government it goes outside the purview of the A.P. Shops & Establishments Act. The very appeal preferred by them before the appellate authority is illegal and invalid and void."
These facts are not disputed by the petitioners. This contention was in fact raised before the 2nd and 3rd respondents, but was rejected by them on the basis of the judgment of the Supreme Court in Heavy Engineering Mazdoor Union v. State of Bihar 1969 - II - LLJ - 540. In that case, the Supreme Court dealt with the scope and meaning of the expression "under the authority of" the Central Government in Section 2(a) of the Industrial Disputes Act, 1947.
(3.)However, the learned counsel for the 1st respondent relied on a decision of the Supreme Court in C. V. Raman v. Management of Bank of India 1988 - II - LLJ - 423. That is a common judgment in a batch of Civil Appeals before the Supreme Court and the common question which arose for consideration in all those appeals was as to whether the National Banks and the State Bank of India were establishments under the Central Government within the meaning of the Shops and Establishments Acts of Tamil Nadu, Andhra Pradesh and Kerala and consequently whether the provisions of the said Acts were not applicable to the said Banks in view of the exemption contained in this behalf therein. One of the Civil Appeals was against the judgment of this Court dated 3/02/1976 in Writ Appeal No. 268 of 1975 upholding the order of a learned Single Judge dated 14/11/1974 in Writ Petition No. 5973 of 1973. The facts in that Writ Petition are as follows : An employee of a National Bank i.e., Syndicate Bank (which was the appellant before the Supreme Court) questioned the termination of his services by the said bank in an appeal under the Act before the Labour Officer and the Labour Officer allowed the said appeal which was confirmed in Second Appeal by the Labour Court. Aggrieved by the said orders, the Syndicate Bank filed the said Writ Petition for quashing the said orders and one of the contentions raised on behalf of the bank was that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Act, the provisions of the Act including the provisions of appeal were not applicable to it in view of the exemption contained in the said provision and consequently the orders passed by the Labour Officer and the Labour Officer and the Labour Court were without jurisdiction. The said contention was rejected by the learned Single Judge of this Court and the Writ Petition was dismissed which was confirmed by a Division Bench of this Court in Writ Appeal No. 268 of 1975 as stated above. After considering the various provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act No. 5 of 1970) under which the nationalised banks including the Syndicate Bank were constituted, the Supreme Court held that the nationalised banks were clearly establishments under the Central Government. The Supreme Court rejected the contention that the word "under" used in the expression "under the Central Government" connoted complete control in the sense of being owned by the Central Government observing that the word "under" could not be taken to have the same meaning as the word 'of' which might bring in the notion of ownership. Adverting to the contention that since Article 12 of the Constitution defining the term "State" so as to include the authorities under the control of the Government of India occurred in Part III of the Constitution dealing with fundamental rights, the decision in that cases dealing with Articles 12 could not be made the basis for the decision that the nationalised banks were establishments under the Central Government, the Supreme Court observed as follows : (1988 - II - LLJ - 423 at 430)
"Even though that be so, it cannot be gainsaid that the salient principles which have been laid down in those cases with regard to the authorities having a corporate structure and exercising autonomy in certain spheres will certainly be useful for determining as to whether the State Bank of India and the Nationalised Banks are establishments under the Central Government."
The Supreme Court also referred to its decision in Ajay Hasia v. Khalid Mujib Sehravardi 1981 - II - LLJ - 103 and held that "even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and its employees may not be the employees of the Central 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". The Supreme Court also distinguished its decision in Heavy Engineering Mazdoor Union v. State of Bihar (supra) observing as follows (1988 - II - LLJ - 423 at 431-432) :
"The question which came up for consideration in that case was whether an industry carried on by a company incorporated under the Companies Act was an industry carried on 'under the authority of' the Central Government so that the Central Government may be the appropriate Government for making a reference under the Industrial Disputes Act, 1947. In the instant cases we are not concerned with the question as to whether the various banks referred to above are carried on 'under the authority of' the Central Government. The question, as seen above, which falls in these cases for consideration is whether in view of the existence of deep and pervasive control of the Central Government over these banks they are establishments under the Central Government for purposes of the Acts aforesaid dealing with Shops and Commercial Establishments."
The learned counsel for the 1st respondent contends that C. V. Raman's case (supra) is a direct authority applicable to the facts of the present case. He submits that the 1st respondent herein i.e., the Computer Maintenance Corporation Limited, is a Government company wholly owned by the Central Government and that in view of the details of the control aversed in paragraphs 8 and 9 of the counter affidavit filed on its behalf there is a deep and pervasive control of the Central Government over it and that therefore it is an establishment under the Central Government within the meaning of that expression in Section 64(1)(b) of the Act. In C. V. Raman's case (supra) the Supreme Court dealt in detail with the meaning of the word 'under' and held that the existence of deep and pervasive control of the Central Government over the establishment in question would be a determining factor for holding that the said establishment was under the Central Government. The meaning of the word 'under' highlighted by the Supreme Court is "subject to the authority, rule, control of"; "in a position of inferiority or subordination to, subject to the rule, government, direction, guidance, instruction, or influence of". In view of the uncontroverted averments in paragraphs 8 and 9 of the counter-affidavit filed on behalf of the 1st respondent referred to above, I am satisfied that the 1st respondent is an establishment subordinate to and under the control of the Central Government and therefore it is an establishment under the Central Government and by virtue of sub-section (1) of Section 64 of the Act nothing in the Act shall apply to it.
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