1980 (11) TMI 113 - SC - Companies Law

Bharat Petroleum: State Status, Pension Deductions, and Constitutional Values

Som Prakash Rekhi Versus Union of India

The Supreme Court held that Bharat Petroleum Corporation Ltd. is considered 'State' under Article 12, allowing for writ jurisdiction under Article 32. ... Whether the corporation enjoys monopoly status which is State conferred or State protected? Held that:- As agree with my learned brothers that the petitioner should be granted the relief proposed by them. Issues Involved:1. Whether a writ will issue under Article 32 of the Constitution against a Government company.2. Alleged stultification of Article 41 by the State reincarnating as a Government company, by defending the reduction of the petitioner's pension.3. Construction of relevant legislations and regulations covered by the writ petition.Issue-wise Detailed Analysis:1. Issuance of Writ under Article 32 against a Government Company:The core issue was whether a writ under Article 32 of the Constitution could be issued against Bharat Petroleum Corporation Ltd., a Government company. The Court examined whether the Corporation could be considered 'State' under Article 12 of the Constitution. The judgment emphasized that the definition of 'State' in Article 12 includes all authorities under the control of the Government of India. The Court held that Bharat Petroleum Corporation Ltd., being a Government company, is an instrumentality or agency of the State and thus falls within the definition of 'State' under Article 12. The Court reasoned that if the entire share capital of the corporation is held by the Government, it indicates that the corporation is an instrumentality or agency of the Government. The Court also considered factors like State control, monopoly status, and public functions performed by the corporation. Consequently, the Court concluded that a writ under Article 32 could be issued against Bharat Petroleum Corporation Ltd.2. Alleged Stultification of Article 41 by Pension Reduction:The petitioner argued that the reduction of his pension by the Government company violated Article 41 of the Constitution, which directs the State to provide public assistance in cases of unemployment, old age, sickness, and disablement. The petitioner, a retired employee of Burmah Shell Oil Storage Ltd., claimed that his pension was reduced to a trivial amount of Rs. 40 per month, which was insufficient for survival. The Court examined the regulations governing the pension scheme, particularly Regulation 16, which allowed deductions from the pension amount. The Court found that the deductions made by the employer were authorized by the regulations, but emphasized that the stance of reducing an old man's pension to such a low amount was unjust. The Court highlighted the importance of social justice and humane legality, stressing that the public sector should act with a social conscience.3. Construction of Relevant Legislations and Regulations:The Court analyzed the relevant legislations and regulations, including the Burmah Shell (Acquisition of Undertakings in India) Act, 1976, and the regulations governing the pension scheme. The Court noted that the pensionary provisions for Burmah Shell employees were based on a Trust Deed of 1950 and subsequent regulations. Regulation 13 entitled the petitioner to a pension, subject to deductions specified in Regulation 16. The Court found that the deductions made were in accordance with the regulations, but questioned the fairness and humanity of such deductions. The Court emphasized that the law should be interpreted in a manner that aligns with social justice and the fundamental values of the Constitution.Conclusion:The Supreme Court held that Bharat Petroleum Corporation Ltd. is 'State' under Article 12, making it amenable to writ jurisdiction under Article 32. The Court acknowledged the legality of the deductions from the petitioner's pension but criticized the reduction to a trivial amount as unjust and inhumane. The judgment underscored the importance of social justice and humane legality in the interpretation and application of laws. The petitioner was granted relief, with the Court directing the restoration of a fair pension amount.