TaxTMI 
TaxTMI 
1969 (3) TMI 87
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.... therefore, a Government company within the meaning of section 617 of the Companies Act. The memorandum of association and the articles of association of the company confer large powers on the Central Government including the power to give directions as regards the functioning of the company. The wages and salaries of its employees are also determined in accordance with the said directions. The directors of the company are appointed by the President. In its standing orders, the company is described as a Government undertaking. The workmen employed by the company have two unions, the Heavy Engineering Mazdoor Union and the Hatia Project Workers Union. Certain disputes having arisen between the company and its workmen, ;nto which it is not n....
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.... could make the said reference. On the second question, the contention was that the Industrial Employment (Standing Orders) Act was a self-contained code, that once a question relating to conditions of service was before the certifying authority constituted under that Act and was pending before him, the said question could not be an industrial dispute which could be referred for adjudication under section 10 of the Industrial Disputes Act. It was urged that, consequently, the reference on both the grounds was invalid. The High Court negatived both the contentions and upheld the validity of the reference. The Mazdoor Union obtained a certificate under article 133(l)(c) and filed this appeal impugning the correctness of that decision. Under ....
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....der the Companies Act and it is the company so incorporated which carries on the undertaking. The undertaking, therefore, is not one carried on directly by the Central Government or by any one of its departments as in the case of posts and telegraphs or the railways. It was, therefore, rightly conceded both in the High Court as also before us that it is not an industry carried on by the Central Government. That being the position, the question then is, is the undertaking carried on under the authority of the Central Government ? There being nothing in section 2(a) to the contrary, the word "authority" must be construed according to its ordinary meaning and therefore must mean a legal power given by one person to another to do an act. A pers....
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.... new person begins to function as an entity, (of. Salomon v. Salomon & Co. [1897] AC 22). Its rights and obligations are different from those of its shareholders. Action taken against it does not directly affect its shareholders. The company in holding its property and carrying on its business is not the agent of its shareholders. An infringement of its rights does not give a cause of action to its shareholders. Consequently, it has been said that if a man trusts a corporation he trusts that legal persona and must look to its assets for payment; he can call upon the individual shareholders to contribute only if the Act or charter creating the corporation so provides. The liability of an individual member is not increased by the fact that he....
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....any, would not be a notice to the company ; nor can a suit maintainable by and in the name of the company be sustained by or in the name of the President and the said officers. It is true that besides the Central Government having contributed the entire share capital, extensive powers are conferred on it, including the power to give directions as to how the company should function, the power to appoint directors and even the power to determine the wages and salaries payable by the company to its employees. But these powers are derived from the company's memorandum of association and the articles of association and not by reason of the company being the agent of the Central Government. The question whether a corporation is an agent of h....
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....; [1948] L.J.R 1600.). In this connection the meaning of the word "employer" as given in section 2(g) of the Act may be voiced at with some profit as the legislature there has used identical words while defining "an employer". An employer, under clause (g) means, in relation to an industry carried on by or under the authority of any department of the Central Government or a State Government, the authority prescribed in that behalf or where no such authority is prescribed, the head of the department. No such authority has been prescribed in regard to the business carried on by the respondent company. But that does not mean that the head of the department which gives the directions as aforesaid or which supervises over the functioning of the....