2010 (3) TMI 912 - SC - Companies Law

Private Companies Excluded from Disability Act Protections

Dalco Engineering (P.) Ltd. Versus Shree Satish Prabhakar Padhye

The court held that private companies are not covered under the definition of 'establishment' in Section 2(k) of the Persons with Disabilities Act, 1995. ... Whether a company incorporated under the Companies Act (other than a Government company as defined in section 617 of the Companies Act, 1956) is an 'establishment' as defined in section 2(k) of the Act ? Whether the respondent in the first case and the appellant in the second case are entitled to claim any relief with reference to section 47 of the Act ? Held that:- Appeal allowed in favour of assessee. Do not propose to consider whether section 44 applies to non-statutory corporations in the transport sector, as that issue does not arise in this case Issues Involved:1. Definition of 'establishment' under Section 2(k) of the Persons with Disabilities Act, 1995.2. Applicability of Section 47 of the Persons with Disabilities Act, 1995 to private companies.3. Relief entitlement under Section 47 of the Act for employees of private companies.Issue-wise Detailed Analysis:1. Definition of 'establishment' under Section 2(k) of the Persons with Disabilities Act, 1995:The term 'establishment' as defined in Section 2(k) of the Act includes:(i) A corporation established by or under a Central, Provincial, or State Act.(ii) An authority or a body owned, controlled, or aided by the Government.(iii) A local authority.(iv) A Government company as defined in Section 617 of the Companies Act, 1956.(v) Departments of a Government.The court examined whether companies incorporated under the Companies Act, 1956, fall within this definition. It was determined that such companies do not fall under the categories specified in Section 2(k). The employee's argument that a company incorporated under the Companies Act is a 'corporation established by or under a Central Act' was rejected. The court clarified that the term 'corporation established by or under a Central, Provincial, or State Act' refers to statutory corporations created by legislation, not companies registered under the Companies Act.2. Applicability of Section 47 of the Persons with Disabilities Act, 1995 to private companies:Section 47 of the Act states that no establishment shall dispense with or reduce in rank an employee who acquires a disability during service. The court emphasized that the term 'establishment' in this context is limited to entities defined under Section 2(k) of the Act, which does not include private companies. The court further noted that the legislative intent was to apply Section 47 only to establishments synonymous with the definition of 'State' under Article 12 of the Constitution of India. The marginal note of Section 47, which refers to 'non-discrimination in Government employment,' supports this interpretation.3. Relief entitlement under Section 47 of the Act for employees of private companies:Given that private companies do not fall under the definition of 'establishment' in Section 2(k) of the Act, Section 47 does not apply to them. Therefore, employees of private companies are not entitled to claim relief under Section 47 of the Act. The court concluded that the appellant in C.A. No. 1886 of 2007 and the third respondent in C.A. No. 1858 of 2007 are not establishments within the meaning of Section 2(k) of the Act, and thus, Section 47 does not apply. Consequently, no relief can be granted under Section 47 in either case.Conclusion:C.A. No. 1886 of 2007 is allowed, and C.A. No. 1858 of 2007 is dismissed, resulting in the dismissal of the respective writ petitions. This judgment does not preclude employees of private companies terminated due to disability from seeking or enforcing rights under other statutes in accordance with the law.