TaxTMI 
TaxTMI 
1988 (4) TMI 439
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....e Bank of India which is a Nationalised Bank. He was dismissed from service in pursuance of disciplinary action for certain charges framed against him. Aggrieved, he preferred an appeal under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (hereinafter referred to as the Tamil Nadu Shops Act). A preliminary objection was raised on behalf of the Bank of India to the effect that the Tamil Nadu Shops Act was not applicable to the Bank in view of the provisions contained in Section 4(1)(c) thereof which exempted inter alia an establishment under the Central Government from the purview of that Act. The Appellate Authority, however, took the view that it was a case where the preliminary objection may be decided along with the appeal. The Bank of India thereupon filed two writ petitions in the High Court being Writ Petition Nos. 2013 and 2014 of 1979. The prayer contained in Writ Petition No. 2013 of 1979 was for the issue of a writ of mandamus directing the Appellate Authority to dispose of the preliminary objection before taking up the appeal for hearing on merits. In Writ Petition No. 2014 of 1979 on the other hand a prayer was made for the issue of a writ of prohibi....
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....an appeal was preferred by Respondent No. 3 before the Labour Officer under the Andhra Pradesh Shops and Establishment Act, 1966 (hereinafter referred to as the Andhra Pradesh Shops Act). The Labour officer allowed the said appeal which was confirmed in a second appeal by the Labour Court. Aggrieved by these orders the appellant-Bank filed writ petition No. 5973 or 1973 for quashing of these orders. One of the pleas raised in the writ petition by the appellant was that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf and consequently the orders passed in the appeals by the Labour officer and the Labour Court were without jurisdiction. This plea, however, did not find favour with the learned Single Judge who decided the writ petition and the writ petition was consequently dismissed. The Writ Appeal No. 268 of 1975 preferred by the appellant- Bank against that judgment was dismissed by a Division Bench of the High Court by the judgment which is the subject matter of this c....
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....al. The common question which arises for consideration in all these appeals is as to whether the Nationalised Banks and the State Bank of India are establishments under the Central Government within the meaning of the Acts referred to above and consequently the provisions of the said Acts are not applicable to these Banks in view of the exemption contained in this behalf therein. In view of the definition of the term "establishment" read with that of "commercial establishment" contained in the Acts referred to above it has not been disputed even by the learned counsel for the various banks that a bank is an establishment. Consequently unless exempted the provisions of the said Acts shall apply to the State Bank of India and the nationalised banks also. Tamil Nadu Shops Act which is of the year 1947 and which really seems to be the precursor and foundation of the Kerala Shops Act and the Andhra Pradesh Shops Act which are of the years 1960 and 1966 respectively contains exemptions in Section 4. Sub-section (1) of Section 4 starts with the words "Nothing contained in this Act shall apply to-". Thereafter it contains clauses (a) to (f) which describe t....
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....' or subordinate." (Boviar's Law Dictionary) "Inferior, subordinate of lower rank or position (10)- Denoting subordination to; or control by, a person or persons having or exercising, recognising authority or command." "with abstract or other subs. denoting authority or control, with or without specification of the person or persons exercising it." (The Compact Edition of the oxford English Dictionary) "Under has the same significance as 'by virtue of' by or through the authority of" (In Venkataramiya's Law Lixicon) "The word "under" may be used in statute in its literal sense as indicating condition of inferiority or subservience or as meaning subject to or in conformity with, denoting curtailment or restriction of, but nevertheless agreement or congruity with, something else to which it is made applicable. Alsop v. pierce, 19 SO 2d 799, 802, 155 Fla. 184" (Words and Phrases Permanent Edition) We may now advert to the composition and constitution of the State Bank of India and the nationalised banks. The preamble of the State Bank of India Act, 1955 (hereinafter referred to as Act No. 23 of 1955) reads as ....
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....sub-section has been given to the Central Government and its decision has been made final. Sub-section (3) of Section 7 contemplates that the appointment, promotion or increment contemplated by the said sub-section as have been confirmed by the Central Government shall have effect or be payable or claimable. Likewise, the continued grant of the pension, allowance or other benefit, as the case may be, has been made subject to the direction of the Central Government in this behalf. Section 8 contemplates that for the persons who immediately before the appointed day were the trustees of the funds mentioned therein, there shall be substituted as trustees such persons as the Central Government may by general or special order specify. Sub-section (1) of Section 16 contemplates that the Central office of the State Bank shall be at Bombay. The Central Government, however, has been conferred with the power to provide otherwise by Notification in the official Gazette. Sub-section (5) of Section 16 provides that notwithstanding anything contained in sub-section (4) the State Bank shall establish not less than four hundred branches in addition to the branches referred to in sub- section (3) wi....
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.... the heights of the economy and to meet progressively and serve better the needs of development of the economy in conformity with national policy and objectives and for matters connected therewith or incidental thereto. Clauses (d) and (f) of Section 2 of this Act define "corresponding new banks" and "existing banks". First Schedule to the Act in column 1 enumerates the names of the existing banks whereas in column 2 the names of the corresponding new banks. Sections 3 and 4 indicate that the corresponding new banks which are constituted on the commencement of this Act have taken over the undertakings of the concerned existing banks. Section 6 contemplates that every existing bank shall be given by the Central Government such compensation in respect of transfer under Section 4 to the corresponding new banks of the undertakings of the existing banks as is specified against each such bank in the Second Schedule. Section 7 provides that the Head officer of each corresponding new bank shall be at such place as the Central Government may by Notification in the official Gazette specify in this behalf. The general superintendence, direction and management of the affai....
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....art of the undertaking of a corresponding new bank to any other banking institution or the transfer of the whole or any part of the undertaking of any other banking institution to a corresponding new bank and such incidental, consequential and supplemental matters as may be necessary to carry out the provisions of this Act. Sub-section (4) entitles the Central Government in consultation with the Reserve Bank to make a scheme to amend or vary any scheme made under sub- section (1). Sub-section (5) inter alia contemplates that the scheme so prepared by the Central Government shall be binding on the corresponding new banks or corporation or banking institutions and also on all other persons mentioned therein. Section 10 deals with closure of accounts and disposal of profits. Sub-section (2) thereof contemplates that the remuneration payable to every auditor of a corresponding new bank shall be such as the Reserve Bank may fix in consultation with the Central Government. Under subsection (4) every auditor of a corresponding new bank has to make a report to the Central Government upon the annual balance sheet and accounts and such report shall contain what is provided for in clauses (a)....
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....ructure of their own and cannot as such be treated to be owned by the Central Government. According to learned counsel the word "under" used in the expression "under the Central Government" connotes complete control in the sense of being owned by the Central Government. We find it difficult to agree with this submission. We shall shortly deal with the legal position with regard to an autonomous corporation having distinct juristic entity with a corporate structure. Suffice it to say at this place that to uphold the submission of learned counsel for the employees the word "under" will have to be substituted by the word "of" in the relevant subsection. It is obvious that the word "under" 'cannot be taken to have the same meaning as word "of" which may bring in the notion of ownership. Had that been the intention of the Legislature we find no cogent reason as to why the word "of" was not used in place of the word "under" in the relevant sub-section. Indeed the concept of "under" can be relevant only when there are two entities one of which may be under the other. A department of the Governmen....
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....eal with these new problems came to be realised and it became necessary to forge a new instrumentality or administrative device for handling these new problems. It was in these circumstances and with a view to supplying this administrative need that the corporation came into being as the third arm of the Government and over the years it has been increasingly utilised by the Government for setting up and running public enterprises and carrying out other public functions. Today with increasing assumption by the government of commercial ventures and economic projects, the corporation has become an effective legal contrivance in the hands of the Government for carrying out its activities, for it is found that this legal facility of corporate instrument provides considerable flexibility and elasticity and facilitates proper and efficient management with professional skills and on business principles and it is blissfully free from "departmental rigidity, slow motion procedure and hierarchy of officers". The government in many of its commercial ventures and public enterprises is resorting to more and more frequently to this resourceful legal contrivance of a corporation because ....
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....ation in that case was whether an industry carried on by a company incorporated under the Companies Act was an industry carried on "under the authority of" the Central Government so that the Central Government may be the appropriate Government for making a reference under the Industrial Disputes Act, 1947. In the instant cases we are not concerned with the question as to whether the various banks referred to above are carried on "under the authority of" the Central Government. The question, as seen above, which falls in these cases for consideration is whether in view of the existence of deep and pervasive control of the Central Government over these banks they are establishments under the Central Government for purposes of the Acts aforesaid dealing with Shops and Commercial Establishments. Reliance was also placed by learned counsel on Hindustan Aeronautics Ltd. v. The Workmen and Ors., [1976] 1 S.C.R. 231 where again in the context of the Industrial Disputes Act the same view was taken relying on the earlier decision in the case of Heavy Engineering Mazdoor Union (supra). In this connection it may be noticed that even in the case of Heavy Engineering Mazdoor ....
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....relied on is Rashtriya Mill Mazdoor Sangh, Nagpur v. The Modal Mills, Nagpur and another, [1985] 1 S.C.R. Page 751. That case again is distinguishable. The question which came up for consideration in that case was with regard to the consequence that ensued on the issue of a notified order appointing authorised Controller under Section 18A of the Industries (Development & Regulation) Act, 1951. It was pointed out that the consequence of such a notified order being issued is to divert the management from the present managers and to vest it in the authorised Controller. It could not be said that on the issue of such an order the industrial undertaking is engaged in the industry carried on under the authority of the department of the Central Government inasmuch as the expression "under the authority of any department of the Central Government" in ordinary parlance means that the department is directly responsible for the management of the industrial undertaking. It was further pointed out that the power to regulate the management or control the management is entirely distinguishable from the power to run the industry under the authority of the department of the Central Govern....
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....the decisions dealing with the term "other authorities" within the meaning of Article 12 of the Constitution were not of much assistance; (2) that the Central Government exercises control over the nationalised banks only to a limited extent and that there was nothing to enable such banks to identify with the Central Government particularly when as a legal person these banks have got a right to hold and acquire property and have almost full freedom in the matter of day to dayadministration (3) Even though in the relevant clause containing exemption the Reserve Bank of India had been mentioned there was no such mention with regard to nationalised banks. As regards the first reason referred to above we have already pointed out that even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein referred to above particularly with regard to deep and pervasive control are relevant for deciding the point in issue. As regards the second reason referred to above suffice it to point out that for holding that the State Bank of India and the nationalised banks are establishments under ....