Central Government control determines exemption for statutory banks under Shops and Establishments laws, despite separate corporate personality.

The exemption clauses in the Tamil Nadu, Kerala and Andhra Pradesh Shops and Establishments Acts were interpreted to exclude establishments under the Central Government. Applying the statutory schemes of the State Bank of India Act, 1955 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the SC treated deep and pervasive governmental control over capital, management, policy directions, appointments, regulation and liquidation as decisive. The word "under" was held to mean subordination or control, not ownership. Separate corporate personality and limited day-to-day autonomy did not alter that relationship. State Bank of India and nationalised banks were therefore treated as establishments under the Central Government for the exemption clauses.

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Issues: Whether the State Bank of India and nationalised banks are establishments under the Central Government for the purpose of the relevant Shops and Establishments Acts and therefore entitled to exemption from the operation of those Acts.

Analysis: The exemption clauses in the Tamil Nadu, Kerala and Andhra Pradesh Shops and Establishments Acts excluded establishments under the Central Government. The Court examined the statutory schemes of the State Bank of India Act, 1955 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and found that the Central Government exercised deep and pervasive control over the banks in matters of capital, management, policy directions, appointment-related powers, regulation-making, liquidation and other core functions. The term "under" was held to denote subordination or control and not ownership. The fact that the banks were separate corporate bodies with juristic personality and some autonomy in day-to-day administration did not take them outside the expression used in the exemption clauses. The Court also treated the principles relating to instrumentality of the State and degree of control as relevant in determining the real relationship between the banks and the Central Government.

Conclusion: The State Bank of India and nationalised banks are establishments under the Central Government within the meaning of the relevant exemption clauses. The employees' appeals under the Shops and Establishments Acts were therefore not maintainable, while the banks' challenges to the contrary findings succeeded.

Final Conclusion: The common legal issue was answered in favour of the banks, resulting in dismissal of the appeals where the banks failed and allowance of the appeals where the banks challenged the applicability of the Shops and Establishments Acts.

Ratio Decidendi: An autonomous statutory bank remains an establishment under the Central Government where the statutory scheme shows deep and pervasive governmental control, even if the bank has separate corporate personality and limited operational autonomy.

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