Temporary statutory control of management does not trigger the Payment of Bonus Act exclusion for central government industries.

Temporary statutory control of management under section 18A of the Industries (Development and Regulation) Act, 1951 does not make a private industrial undertaking an industry carried on by or under the authority of the Central Government for purposes of section 32(4) of the Payment of Bonus Act, 1965. The authorised controller only substitutes management; the undertaking retains its identity, ownership and legal character, so the bonus exclusion does not apply merely because control has been assumed. The reasoning also treats the statutory framework as preserving the undertaking rather than converting it into Government business, and indicates that bonus liability, if relevant, would depend on the successor statutory arrangement.

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Issues: Whether an industrial undertaking, on appointment of an authorised controller under section 18A of the Industries (Development and Regulation) Act, 1951, becomes an establishment engaged in an industry carried on by or under the authority of the Central Government so as to attract the exclusion in section 32(4) of the Payment of Bonus Act, 1965; and whether the employees of such undertaking are thereby excluded from bonus entitlement under the Act.

Analysis: The exclusion in section 32(4) applies only where the industry itself is carried on by or under the authority of a Central Government department. A notified order under section 18A changes only the management of the undertaking through an authorised controller. The undertaking continues to retain its identity, ownership and governing legal form, while the Central Government exercises only regulatory control over management. Section 18B and section 18E also show that the undertaking is not taken over as Government business, but remains the same undertaking with a substituted management. The expression used in section 32(4) qualifies the industry, not merely the establishment, and therefore cannot be extended to every undertaking under temporary control of an authorised controller. The contrary view would create an unwarranted discrimination between similarly situated industrial undertakings. The liability for bonus, if awarded, would in the circumstances fall on the successor statutory body for the relevant period under the nationalisation framework.

Conclusion: The employees were not excluded from the operation of the Payment of Bonus Act, 1965 merely because an authorised controller had been appointed under the Industries (Development and Regulation) Act, 1951.

Final Conclusion: The references were wrongly rejected on the preliminary issue and had to be decided on merits after setting aside the Industrial Court's awards.

Ratio Decidendi: Temporary statutory control of management under the Industries (Development and Regulation) Act, 1951 does not convert a private industrial undertaking into an industry carried on by or under the authority of the Central Government for the purpose of the bonus exclusion.

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