AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1999 (1) TMI 548
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.... name of the President of India and the same is 'State' for the purpose of Article 12 of the Constitution of India. The petitioner's application seeking permission to contest in the Bangalore City Corporation Elections came to be rejected. 3. Petitioner Smt. C. Chandramma, in W.P. No. 28766 of 1996 is an employee working as Senior Office Assistant in M/s. Indian Telephone Industries Limited, Bangalore Complex, Dooravaninagar, Bangalore-16. She filed her nomination and the scrutiny of the nomination papers was taken up on 4-1-1996. It appears that the first respondent had issued a note on the qualifications and disqualifications of candidates under the Act, dated 19-12-1995 and inter alia it was opined by the first respondent that employees of the State, Central and Public Sector Undertakings are deemed to hold an office of profit under an authority; and so, the same is a disqualification under Section 26(1)(c) of the KMC Act. 4. Petitioner Sri Muniraju in W.P. No. 28842 of 1996 is an employee working as Accountant Category (SH) in M/s. Indian Telephone Industries Limited, Bangalore Complex, Bangalore. He contends that Indian Telephone Industries Limited is a Publi....
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....Kolar District and Others . The learned Single Judge vide hia order dated 8-10-1996 observed.- "However, having regard to the subsequent decision of the Supreme Court in Satrucharla Chandrasekkar Raju v Vyricherla Pradeep Kumar Dev, which distinguishes Biharilal Dobray v Roshan Lal Dobray, and the decision of the Full Bench of this Court in K.V. Panduranga Rao v Karnataka Dairy Development Corporation, Bangalore and Others and the disinvestment of part of the share capital in BEML by the Central Government in favour of the public, the position may not be the same and the matter requires consideration by a Division Bench". 3. After hearing the learned Counsel for the parties, perusing the record and minutely examining various judgments cited at the Bar, we are prima facie of the opinion that the law laid down by this Court in Chenna Reddy's case, supra, which was affirmed by the Division Bench in W.A. No. 669 of 1990, requires reconsideration. While disposing of SLP No. 11150 of 1991, the Hon'ble Supreme Court had not decided the pleas on merit and appear to have dismissed the appeal in limine without assigning the reasons or passing a speaking order. The l....
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....as only in the year 1981, for the first time, 'Government Companies' were considered as 'other authorities' under Article 12. Therefore, contextually, the words 'other authorities' in Section 26(1)(c) should be understood as referring only to Statutory Corporations. Therefore, it is contended by the petitioners that, holding of office of profit under 'other authority' as defined under Article 12 is not a disqualification as the 'other authority' under Section 26(1)(c) of the Act, is not the same as 'other authority' in Article 12 of the Constitution. Consequently, Section 26(1)(c) of the KMC Act is no bar for contesting in the election. It is further contended that Section 26(1)(c) is irrational, vague and discriminatory and therefore, it is unconstitutional. 8. Learned Advocate General and Counsel for respondent organizations contended that the petitioners are the employees of Government Companies which will fall within the definition of 'other authority' as used in Article 12 and Section 26(1)(c) of the Act. The term 'other authority' used in Section 26(1)(c) has the same meaning as the words 'other authority"....
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....the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments. Explanation.--For the purpose of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor of any State or is a Minister either for the Union or for any State". Article 66(4) reads: 66. Election of Vice-President.- (1).... (2).... (3).... (4) A person shall not be eligible for election as Vice-President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments. Explanation.--For the purposes of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor of any State or is a Minister either for the Union or for any State". We have to examine whether the words "other authority" in Section 26(1)(c) of the KMC Act is similar to 'other author....
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....trumentality' or 'agency', statutory or otherwise, for the purpose of fulfilment of its obligations for implementation of Directive Principles. 15. Part IX-A was incorporated providing constitutional status to the 'Municipalities'. Article 243-Q deals with constitution of Municipalities. Article 243-R deals with composition of Municipalities. Article 243-S deals with constitution and composition of Wards Committees, etc. Article 243-T deals with Reservation of Seats. Article 243-V deals with disqualifications for membership.--It provides that a person shall be disqualified for being chosen as, and for being, a member of a Municipality.- (a).....(omitted as not necessary). (b) if he is so disqualified by or under any law made by the Legislature of the State. Article 243-ZA deals with Elections to the Municipalities. Sub-clause (2) reads: "Subject to the provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Municipalities". As per the above said clause, the Constitu....
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....er sections of the people. The State, as defined in Article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people. The State, as constituted by our Constitution, is further specifically empowered under Article 298 to carry on any trade or business. The circumstance that the Board under the Electricity Supply Act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the Board must be excluded from the scope of the word "State" as used in Article 12. On the other hand, there are provisions in the Electricity Supply Act which clearly show that the powers conferred on the Board include power to give directions, the disobedience of which is punishable as a criminal offence. The Rajasthan Electricity Board was clearly an authority to which the provisions of Part III of the Constitution were applicable". 20. In case of Ramana Dayaram Shetty v International Airport Authority of India , the Supreme Court traced the genesis of the formation of the Government Companies and held that they were the Instrumentalities or the agencies of the State and....
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....h such terms and conditions as may be imposed by the Central Government, hereby directs that the right, title and interest and the liabilities of Burmah Shell Oil Storage and Distributing Company of India Limited in relation to its undertakings in India shall, instead of continuing to vest in the Central Government vest with effect from the twenty-fourth day of January, 1976, in Burmah Shell Refineries Limited. This is the well-worn legal strategy for Government to run economic and like enterprises. We live in an era of public sector corporations, the State being the reality behind. Law does not hoodwink itself and what is but a strategy cannot be used as a stratagem: XXX XXX XXX 26. Constitutional law is not a game of hide and seek but practical real life conclusions. So viewed, we are constrained to hold that Burmah Shell, a Government company though, is but the alter ego of the Central Government and must, therefore, be treated as definitionally caught in the net of 'State' since a juristic veil worn for certain legal purposes cannot obliterate the true character of the entity for the purposes of constitutional law. XXX XXX XXX 39. Let....
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....vernment companies, bureaus, societies, councils, institutes and homes, the citizen may forfeit his fundamental freedoms vis-a-vis these strange beings which are Government in fact but corporate in form. If only fundamental rights were forbidden access to corporations, companies, bureaus, institutes, councils and kindred bodies which act as agencies of the Administration, there may be a break-down of the rule of law and the constitutional order in large sector of governmental activity carried on under the guise of 'jural persons'. It may pave the way for a new tyranny by arbitrary administrators operated from behind by Government but unaccountable to Part III of the Constitution. We cannot assent to an interpretation which leads to such a disastrous conclusion unless the language of Article 12 offers no other alternative. 56. It is well known that "Corporations have neither bodies to be kicked, nor souls to be damned" and Government corporations are mammoth organisations. If Part III of the Constitution is halted at the gates of corporations Justice Louis D. Brandeis's observation will be proved true: The main objection to the very large corporation is....
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....ranting admissions and violated the equality clause of the Constitution. xxx xxx xxx Obviously, the Society cannot be equated with the Government of India or the Government of any State nor can it be said to be a local authority and therefore, it must come within the expression "other authorities" if it is to fall within the definition of 'State'. That immediately leads us to a consideration of the question as to what are the "other authorities" contemplated in the definition of 'State' in Article 12". ....It is the Fundamental Rights which along with the Directive Principles constitute the life force of the Constitution and they must be quickened into effective action by meaningful and purposive interpretation. If a corporation is found to be a mere agency or surrogate of the Government "in fact owned by the Government, in truth controlled by the Government and in effect an incarnation of the Government" the Court must not allow the enforcement of Fundamental Rights to be frustrated by taking the view that it is not the Government and therefore not subject to the constitutional limitations. We are clearly of the view that where a corporat....
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....that the autonomous bodies or organisations are not 'instrumentality of the State'. 26. The Supreme Court in Tekraj Vasandi alias K.L. Basandhi v Union of India and Others, while considering the question whether Institute of Constitutional and Parliamentary Studies (ICPS) is State or not, held that the said Society is not a State. The objects of the society inter alia were.- "(1) to promote and provide for constitutional and parliamentary studies with special reference to comparative studies in constitutional systems of various countries and working of the Indian Constitution and parliamentary and governmental institutions in their various aspects; (2) to undertake study of courses and fundamental research relating to developments in constitutional law, conventions and practices, parliamentary procedure, legislative drafting, trends in judicial interpretation and allied matters; (3) to organise inter alia training programmes in constitutional problems and matters of current parliamentary importance; (4) to set up a legislative research and reference service for the benefit of all interested members of the Union Parliament and State Leg....
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....what was expected to be the public obligation of the 'State' had been undertaken to be performed as a part of the Society's function. In a Welfare State, as has been pointed out on more than one occasion by this Court, governmental control is very pervasive and in fact touches all aspects of social existence. In the absence of a fair application of the tests to be made, there is possibility of turning every non-governmental society into an agency or instrumentality of the State. That obviously would not serve the purpose and may be far from reality. A broad picture of the matter has to be taken and a discerning mind has to be applied keeping the realities and human experiences in view so as to reach a reasonable conclusion. Having given our anxious consideration to the facts of the case, we are not in a position to hold that ICPS is either an agency or instrumentality of the State so as to come within the purview of 'other authorities' in Article 12 of the Constitution. We must say that ICPS is a case of its type -- typical in many ways and the normal tests may perhaps not properly apply to test its character". 27. In Sabhajit Tewary's case, supra, Justic....
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....ticular matter before it in a particular manner and therefore it cannot be said that it is an authority under the control of the Government of India -- N. Masthan Sahib v Chief Commissioner, Pondicherry and Another, rel. on". 29. From the principles laid down in these cases, it is evident that, though societies registered under the Societies Registration Act, are created by the Government, unless they have the characteristics as narrated in R.D. Shetty's case, supra, they will not be considered as 'other authorities' under Article 12. 30. Thus the Apex Court has considered whether the organisations, Companies and Corporations are authorities within the meaning of Article 12 of the Constitution of India, after scrutinising the nature or origin, pervasive control of the State and financial assistance by the State, Rules and Bye-laws made, and power provided to such body and its control over other organisations etc. Taking these facts, we have to decide whether any organisation is an 'Authority' or not, keeping in view the principles laid down by the Apex Court. 31. BEML was incorporated under the Companies Act on 11th May, 1964. The share capital of the C....
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....ended that some of the shares of the company have been divested to private persons and therefore, it has ceased to be a Government Company. There is no dispute that some shares are divested by sale, but the Government is owning more than 51% shares. According to the definition of 'Government Company', where the Government is owning 51% shares in a Company it is a Government Company. Therefore, merely because some of the shares are divested, the Company will not cease to be a Government Company unless its share holding becomes less than 50%. The position of Indian Telephone Industries Limited which is another Public Sector Undertaking engaged in the manufacture of Defence and Telecommunication equipment, is similar. 33. These two organisations are Government Companies subject to pervasive control of the Central Government. Therefore, these organisations are 'other authorities' under Article 12 of the Constitution of India. In fact, as early as 1982, this Court has held that BEML is 'State' in. 34. The next contention of the petitioners is that, though respondent organizations are 'other authorities' within the meaning of Article 12 of the Consti....
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....thority subject to the control of any of the said Governments other than such offices as are declared by rules made under this Act not to disqualify the holder"; Section 26(1)(c) of KMC Act: "26. General disqualification for becoming a Councillor.- (1) A person shall be disqualified for being chosen as and for being a Councillor.- (c) if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule to the Constitution of India, or under any local or other authority subject to the control of any of the said Governments other than such offices as are declared by rules made under this Act not to disqualify the holder"; Both these sections are similar and there is no difference and as stated supra, a Division Bench of this Court held that the office of profit in BEML is a bar for contesting elections under Section 11(1)(j) of the Zilla Parishads Act, which is similar to Section 26(1)(c) of the KMC Act. Therefore, holding of office of profit in BEML and ITI which are "other authorities" amounts to holding of office of profit in terms of Section 26(1)(c) of the impugned Act. So, the petiti....
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....ve judgment has been referred and approved in Rajasthan State Electricity Board's case, supra, and held that the Board is an 'authority' within the meaning of Article 12 of the Constitution of India. 44. Thus, the contention of the petitioners that, there was no judgment holding that, other than the statutory body, i.e., the local or other authorities, the autonomous body are not 'other authorities' is not tenable. The law laid down by the Supreme Court giving wider interpretation to the words 'other authority' was there even before Rajasthan State Electricity Board's case, supra. 45. This point can be viewed in another perspective. The words 'other authorities' apart from Article 12 of the Constitution, is also found in Articles 58(2) and 66(4) of the Constitution of India. 46. Article 58 of the Constitution deals with qualification for election as President of India. Article 58(2) provides that: "A person shall not be eligible for election as President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said....
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....ve Assembly, under Article 191 of the Constitution of India. The Supreme Court after comparing Articles 102(1) and 191(1)(a) which deal with the disqualification for contesting of the election to the legislative assembly and parliamentary members and Articles 58(2) and 66(4) which deal with the disqualification for the election of the President and Vice-President of India, held that for contesting of election of President and Vice-President of India, a person holding of office of profit under 'other authority' is disqualified as there is a specific provision under Articles 58(2) and 66(4) of the Constitution. Whereas, for contesting elections of the legislative assembly or parliamentary members, there is no disqualification in Articles 102(1) and 191(1)(a) of the Constitution of India. The Supreme Court after comparing the above articles held that, the person holding an office of profit under 'other authority' is not a disqualification for the election of the legislative assembly or parliamentary members. Thus, the Supreme Court has impliedly held that a person working in a Government Company which is a person holding office of profit in an 'other authority'....
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...., functioning, pervasive control of the Government and rule making power and other provisions for non-compliance of the directions etc., to decide whether they are 'other authority' or not. Therefore, the interpretation of the words 'other authority' in Section 26(1)(c) of the KMC Act cannot be said to be an extension of the meaning of the words 'other authority' in Article 12 of the Constitution of India. 51. It is nextly contended that, the KMC Act was enacted in 1976. By applying the contextual interpretation, unless it is a statutory corporation, the respondent organizations can be held as 'other authorities'. For this proposition, learned Counsel for the petitioner relied on a judgment of the Supreme Court in M/s. Utkal Contractors and Joinery Private Limited and Others v State of Orissa and Others, wherein the Supreme Court held: "A statute is best understood if one knows the reason for it. The reason for a statute is the safest guide to its interpretation. The words of a statute take their colour from the reason for it. There are external and internal aids to discover the reason for a statute. The external aids are statement of obj....
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....ns, clauses, phrases and words may take colour and appear difficult than when the statute is looked at without the glasses provided by the context. With those glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act, No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place. It is by looking at the definition as a whole in the setting of the entire Act and by reference to what preceded the enactment and the reasons for it that the Court construed the expression 'Prize Chit' in Srinivasa Enterprises v Union of India and we find no reason to depart from the Court's construction". 53. There is no dispute about the propositions laid down in the above judgments. 54. The KMC Act used the word 'local' or 'other authority' in Section 26(1)(c) of the KMC Act, prescribing the disqualification for the persons who are holding office under the 'other authorities'. Interpreting similar section in Section 11(1)(j) of t....
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....subject to statutory limitation". and held that the right to elect or to be elected is not the fundamental right and it is only a statutory right. 59. The Apex Court while approving the principle laid down in the above judgment held in Ramakant Pandey v Union of India , that the right to vote or right to elect is neither a fundamental nor a civil right but was a pure and simple statutory right. 60. The Supreme Court in Mohan Lal Tripathi v District Magistrate, Rai Bareilly and Others, held that democracy is a concept, a political philosophy, an ideal practice by many nations culturally advanced and politically matured by resorting to governance by representatives of the people elected directly or indirectly. But elected representative to govern is neither fundamental right nor common law right but a special right created by the statutes, or a political right or a privilege by the statutes, or a political right or a privilege and not a natural, absolute or vested right. Concepts familiar to common law and equity must remain stranger to election law unless statutorily recognised. 61. From the above principles laid down in the said judgments, it is manifest that the right ....
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.... rate -- does not constitute a genesis. This judgment was approved by Supreme Court in Rajasthan Electricity Board's case, supra. The Supreme Court after referring Craies on Statute Law and Maxwell on Interpretation of Statutes and approving the judgment of Privy Council held that ejusdem generis principle will not apply while interpreting the words 'other authority' in Article 12 of the Constitution of India. An examination of Section 26(1)(c) of the Act makes it evident that there is absence of any mention of generis or single species, therefore, applying principle laid down by the Apex Court, the rule ejusdem generis will not apply for interpreting 'other authority' similar to 'Local Authority'. 66. The principle laid down by the Apex Court manifests that to invoke the application of ejusdem generis rule there must be distinct genus or category. The specific words must apply not to different objects of the widely different character but to something which can be called a class or kind of object, where this is lacking the rule will not apply and mention of single species will not constitute genus. 67. As held above the 'other authority' i....
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....t similar is not a ground to come to conclusion that the organisation is not an 'other authority'. 72. The learned Counsel for the petitioners fifthly contended the definition of 'Local Authority' in General Clauses Act is wider than the definition in Section 2(18) of the KMC Act. The Legislature has given the restricted meaning to 'Local Authority' in the Act. Therefore, the words 'other authority' is incorporated keeping in view the definition of the term 'Local Authority' in the General Clauses Act which is wider, so the words 'Authority' should be interpreted as per the definition in General Clauses Act. 73. This contention at the outset is not tenable, if the Legislature intended to incorporate the definition of the 'Local Authority' as defined in General Clauses Act, the Legislature would have incorporated the same. When the Legislature specifically provided the definition of 'Local Authority' in KMC Act, to infer that the Legislature was having in mind the definition of the 'Local Authority' as under the General Clauses Act is not acceptable. If it is accepted for the purpose of arguments, it amoun....
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....other two judgments viz., Rakesh Ranjan Verma v State of Bihar and Managing Director, Orissa Industrial Infrastructure Development Corporation, Bhubaneswar v Sarat Chandra Patnaik. The facts of these cases also will not throw much light on the point. 78. There is no dispute about the principle laid down by the Apex Court and the principle has to be applied according to the facts of each case. The respondent organizations are governed by the regulations and guidelines framed. We have already held that the respondent organizations are instrumentalities of the State and merely because they are 'Autonomous' as far as administration is concerned, by that itself it cannot be inferred that they are not instrumentalities of the State. 79. The learned Counsel lastly contended that Section 26(1)(c) of the Act is vague, irrational and discriminatory, and violates Article 14, so it is unconstitutional. 80. The Section 26(1)(c) of the Act disqualifies a person holding office of profit under 'other authorities'. It is contended that the Members of Parliament and Members of Legislative Assemblies are nominated as members of the Corporation Council. Though they are holders....
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....al practitioner on behalf of the Municipality or act as a legal practitioner against Municipality. It was contended that there is no prohibition for the client to contest elections whose case against Municipality is pending, whereas there is a disqualification to contest elections for a legal practitioner appearing for such client. So, this section is discriminatory and violative of Article 14 of the Constitution. The Supreme Court repelled the contention and held that it is a classification by class. 82. In Gauri Shankar and Others v Union of India and Others , it is observed: "Para 9 ....."Legislation enacted for the achievement of a particular object or purpose need not be all embracing. It is for the Legislature to determine what categories it would embrace within the scope of legislation and merely because certain categories which would stand on the same footing as those which are covered by the legislation are left out would not render legislation which has been enacted in any manner discriminatory and violative of the fundamental right guaranteed by Article 14 of the Constitution". The principle laid down in the above decisions squarely supports our view. Ther....
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....gative and all wisdom of the Legislature (by the Constitutional Bench-SC) held in Kirpal Singh v Uttam Singh and Another . Justice Chinoappa Reddy, in the affricated decision, speaking for the Apex Court has considered the contention whether the Article 191(1)(a) can be extended to the employees of the State Corporation also by enacting the appropriate laws under Article 191(1)(e) of the Constitution. In the said decision it is observed as follows: "Or are employees of Public Corporations to be treated differently from employees of the Government? Are not some of them in a better position to exert undesirable pressure than Government employees? On the other hand, are a tremendously large number of employees of Public Corporations to be denied the opportunity of being chosen, as representatives of the people? Do all the considerations applicable to Government employees equally apply to employees of Public Sector Undertakings? Is there no distinguishing feature? Are a large mass of highly or moderately literate people to be denied the right to speak for the people? Is the right to be elected, to be confined, without meaning, any disrespect to any one to the professional poli....
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....rike down an Act made by the Parliament on any ground. As against this, the United States of America has a Federal Constitution where the power of the Congress and the State Legislatures to make laws is limited in two ways, viz., the division of legislative powers between the States and the federal Government and the fundamental rights (Bill of Rights) incorporated in the Constitution. In India, the position is similar to the United States of America. The power of the Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by the Parliament or the Legislature can be struck down by Courts on two grounds and two grounds alone, viz., (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part I of the Constitution or of any other constitutional provision. There is no third ground. We do not wish to enter into a discussion of the concepts of procedural unreasonableness and substantive unreasonableness--concepts inspired by the decisions of United States Supreme Court. Even in U.S.A. these concepts and in particular, the concept substantive due process have proved to be of unending controversy, the latest t....
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....ove decision, Section 26(1)(c) of impugned Act cannot be declared as unconstitutional on the other grounds urged by the petitioners. 90. The Division Bench made a reference to this Full Bench on the premises of the judgment in Satrucharla Chandrasekhar Raju's case, supra, taking a different view from the judgment in Bihnrilal Dobray's case, supra. 91. In Biharilal Dobray's case, supra, the Supreme Court considered whether the Assistant Teacher of Basic Primary School run by the Uttar Pradesh Board of Basic Education is holding of office of profit under premises or not. The Supreme Court has considered the holding of office of profit in a school under the control of Uttar Pradesh Board is a disqualification under Article 191(1)(a) of the Constitution. The Apex Court referred the Uttar Pradesh Basic Education Act, 1972 (U.P. Act No. 34 of 1972) and the Bill, i.e., Uttar Pradesh Basic Education Bill, 1972, in pursuance of which, Act was passed; after referring all the provisions, the Court found that the Board for all practical purposes is a department of the Government and its autonomy is negligible. Therefore, the teacher who is holding an office of profit in a Pri....
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....rom the point of view of the Government". 94. The Apex Court, keeping in view the above principles and considering the facts of that case, held: "The Government has some control over the ITDA which is set up as a project, since it provides funds and sanctions the posts. The District Collector is appointed as Project Officer and some officers are ex officio members of the ITDA which carries out the object of providing the compulsory education in tribal area. But the ITDA is a registered society having its own constitution. Though the Project Officer is the District Collector, he acts as a different entity. The power to appoint or to remove teachers is not with the Government but with the Project Officer. The Government have control over the Appointing Authority but has no direct control over the teachers. The small post that appellant holds in ITDA is only that of a teacher who is directly under the control of the Project Officer. In such a situation the question of any conflict between his duties and interests as an elected member does not arise since it cannot be said that he, as a teacher, can be subjected to any kind of pressure by the Government which has neither th....
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....TI, are entitled to contest the election to the office of Councillors of BCC; and (ii) Section 26(1)(c) of the KMC Act is inapplicable to employees of Public Sector or Government Companies, who want to contest elections to BCC; or alternatively Section 26(1)(c) of the KMC Act, insofar as it disables or disqualifies an employee of a Government Company from contesting elections to Municipal Corporation, is invalid and inoperative, being violative of Article 14 and the basic schedule of the Constitution. 4, Thus, two questions arise for decision: (a) Whether Section 26(1)(c) of the KMC Act, is constitutionally valid; (b) Whether Section 26(1)(c) of the KMC Act disqualifies employees of Government Companies/Public Sector Undertakings, from being chosen as Councillors of Municipal Corporations. While fully agreeing with the reasoning and decision [of learned Acting Chief Justice] on the first question, with respect, I am unable to agree that Government Companies (like BEML and ITI) fall under the expression 'other authority, subject to the control of Government', used in Section 26(1)(c) of the Act and therefore its employees are disqualified for....
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....ority' is defined in Section 2(18) of the Act as meaning a Municipal Corporation, a Municipal Council, Notified Area Committee, Sanitary Board, Development Authority, City Improvement Board, Town Improvement Board, Zilla, Panchayat, Taluk Panchayat and Gram Panchayat, constituted under any law for the time being in force. 6.2 The term 'other authority' is not defined in the Act. It is also not defined in the Karnataka General Clauses Act, 1899 or any other statute. There is also no judicial interpretation of the expression 'other authority', when used with reference to disqualification of the employees of such institutions, to contest elections. 6.3 The Cambridge International Dictionary of English defines an 'authority' as a group of persons with official responsibility for a particular area of activity and having a moral or legal right or ability to control others. 6.4 The expression 'Authority' in its etymological sense means 'a Body invested with power to command or give an ultimate decision, or enforce obedience or having a legal right to command and be obeyed'. Webster's Dictionary of the English Language, defined '....
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.... be Government servant. Alternatively, it was contended that even if he ceased to be a Government servant, he still continued to hold an office of profit under the Government of Mysore, though technically he was in the employment of the company. Article 191(1)(a) of the Constitution, which was considered by the Supreme Court in that case, provided that a person holding any office of profit under the Government of India or the State Government, was disqualified for being chosen as a member of the Legislative Assembly. The question whether an employee of an 'other authority subject to the control of the Government' was disqualified, never arose for consideration. The Supreme Court held that the company came under the control of the Government and the candidate who was holding an office of profit under the company, but he did not incur disqualification under Article 191(1)(a). The Supreme Court referred to the distinction between disqualification under Articles 58(2) and 66(4) on the one hand and disqualification under Articles 102(1) and 191(1)(a) on the other and observed as follows: "In this connection, a comparison between Articles 58(2) and 66(4) and Articles 102....
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.... a co-operative society) in the capital of which the appropriate Government has not less than twenty-five per cent share". It is to be noted that the Parliament, in enacting this section, limited the disqualification to a person holding the office of a managing agent, manager or secretary of a company and not to other employees of the company. This provision, thus, gives two indications as to the scope of the disqualification laid down in Articles 102(1)(a) and 191(1)(a) of the Constitution. One is that the holding of an office in a company, in the capital of which - the Government has not less than 25% share is not covered by the disqualification laid down in Articles 102(1)(a) and 191(1)(a) as, otherwise, this provision would be redundant. The second is that even Parliament when passing the Act, did not consider it necessary to disqualify every person holding an office of profit under a Government Company, but limited the disqualification to persons holding the office of managing agent, manager or secretary of the company. The fact that the entire share capital in the company in the case before us is owned by the Government does not, in our opinion make any difference". What i....
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....thority' in Article 12". 9.2 In Som Prakash's case, supra, rendered by another Bench on the same day as Ajay Hasia's case, supra, the Supreme Court reiterated that a Government Company was an 'other authority' under Article 12. These two decisions have been followed in several other decisions and virtually all Government Companies have been held to be other authorities for purpose of Article 12. In fact BEML has also been held to be as other authority by this Court in T.G. Srinivasamurthy v Bharat Earth Movers Limited. 9.3 There can be no two views that a Government Company is 'other authority' for purpose of Article 12, as held in Ajay Hasia's case, supra, and other cases, if it is an instrumentality or agency of the Government. 10. But, the question is whether the meaning given to the expression 'other authorities' for the purpose of Article 12, could be applied or extended to the expression 'other authority' in Section 26(1)(c) of the KMC Act. It should be remembered that expanded and widened definition of the expression 'other authority' in Article 12, is only for the purpose of extending the enforcement of fundam....
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....ven if some of the powers conferred may be for the purpose of carrying on commercial activities. It held that every authority created by a statute and functioning within the territory of India, or under the control of the Government was an authority under Article 12; and bodies created for the purpose of promoting the educational and economic interests of the people, will also fall under the ambit of Article 12. This position was reiterated in Sukhdev Singh v Bhagatram Sardar Singh Raghuvanshi, dealing with three statutory corporations, that is ONGC, LIC and Industrial Financial Corporation. The Court took note of the fact that these bodies were statutory corporations and not companies. 11.5 The last expansion was, by inclusion of Government companies and societies under the deep and pervasive control of the Government, in the ambit of other authorities, in Ajay Hasia's case, supra and Som Prakash's case, supra, on the foundation laid in Ramana Dayaram Shetty's case, supra. It was held that an instrumentality or agency of the Government will fall within the scope of 'other authorities', irrespective of the fact whether the corporation was created by the statu....
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....nity and the Parliament is of the State'. It is undoubtedly true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the Government. It is really the Government which acts through the instrumentality or agency of the corporation and the juristic evil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government. Now, it is obvious that if a corporation is an instrumentality or agency of the Government, it must be subject to the same limitations in the field of constitutional law as the Government itself, though in the eye of the law it would be a distinct and independent legal entity. If the Government acting through its officers is subject to certain constitutional limitations, it must follow a fortiori that the....
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....l be controlling the corporation and carrying out these functions through the instrumentality or agency of the corporation. We cannot by a process of judicial construction allow the Fundamental Rights to be rendered futile and meaningless and thereby wipe out Chapter III from the Constitution. That would be contrary to the constitutional faith of the post Menaka Gandhi era. It is the Fundamental Rights which along with the Directive Principles constitute the life force of the Constitution and they must be quickened into effective action by meaningful and purposive interpretation. If a corporation is found to be a mere agency or surrogate of the Government, "in fact owned by the Government, in truth controlled by the Government and in effect an incarnation of the Government", the Court must not allow the enforcement of Fundamental Rights to be frustrated by taking the view that it is not the Government and therefore not subject to the constitutional limitations. We are clearly of the view that where a corporation is an instrumentality or agency of the Government, it must be held to be an 'authority' within the meaning of Article 12 and hence subject to the same basic obligat....
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....d not for the purpose of Part XIV or any other provision of the Constitution. 11.8 In Hindustan Steel Works Construction Limited v State of Kerala, the Supreme Court while considering the question whether Hindustan Steel Works Construction Limited which is a Government company wholly owned and controlled by the Central Government, was 'an establishment or institution of Government of India' and thus excluded from the purview of the Kerala Construction Workers Welfare Funds Act; 1989, made clear that inclusion of Government Companies in 'other authorities' for purposes of Article 12, cannot be extended to other enactments/spheres. The Supreme Court held:-- ".....it appears to us that the appellant-company cannot be held to be a department of the Government. There may be a deep and pervasive control of the Government over the appellant-company and the appellant-company, on such account may be an instrumentality or agency of the Central Government and as such a "State" within the meaning of Article 12 of the Constitution. Even though the appellant-company is an agency or instrumentality of the Central Government, it cannot be held to be a department or esta....
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....ocratic set up. Therefore, several factors as indicated above depending upon the facts of each case have to be taken into consideration in deciding whether a particular person is disqualified by virtue of his holding an office is under the Government.....". 11.10 Therefore, the inescapable conclusion is that the series of decisions dealing with Article 12 and holding that Government companies are 'other authorities' are of no assistance to ascertain the meaning of 'other authorities' in Section 26(1)(c). 11.11 In view of the above, it is unnecessary to examine the contention of the petitioners that BEML and ITI should be held to be not 'Authorities' even under Article 12, having regard to the disinvestment policy of the Government and increasing public participation in the share capital of these companies and the subsequent decisions of the Supreme Court in Tekraj Vasandi's case, supra and Chander Mohan Khanna v National Council of Educational Research and Training, wherein the Supreme Court has held that Article 12 should not be stretched so as to bring in every autonomous body which has some nexus with Government within the sweep of the expressio....
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....e history of the times existing when the law was enacted, the previous state of the law, the evils intended to be corrected, and even, according to some cases, the habits and activities of people. Generally, these circumstances may be defined as the conditions under which the statute was enacted (Pages 366 and 367, Para 210)". 12.5 The expression 'Government Corporation' which was understood to refer to a Statutory Corporation till the decision in R.D. Shetty's case, supra, in 1979, was thereafter given the wider meaning as including Government companies also. On the other hand in S.S. Dhanoa v Delhi Municipal Corporation, the term 'Corporation' which would normally include private Corporations also, was given a narrow legal connotation as meaning a Corporation created by the Legislature and not a body or society brought into existence by an act of a group of individuals, for the purpose of Section 21(12) of the Indian Penal Code. 13. Therefore, the expression 'other authority' should be interpreted with reference to the context of elections to Municipal bodies and disqualifications therefrom. The expression should also be understood with reference....
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....some fee for services is paid and that proves their funeral if elected to a panchayat. A balanced view even if it involves judicious irreverence' to vintage precedents, is the wiser desideratum". 13.2 The following observation of the Constitution Bench in Kirpal Singh's case, supra, regarding intendment of provisions relating to disqualification, made in the context of Article 191(1)(a) are of relevance: "The clear and undoubted object of Article 191(1)(a) to (e) and the provisions of the Representation of the People Act (including Section 10) is the preservation of the purity and integrity of the election process by preventing Government or State employees from taking part in the elections. But, Section 10 appears to con- fine the disqualification insofar as it relates to the employees of Government companies to the top-brass' only if such an uncouth expression may be allowed to creep into the judgment of a Court. Nowadays the activities of the State are so manifold and prolific that the State has been forced in the interests of better management and administration and in order to further the Directive Principles of State Policy, to set up various corporati....
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....hat was put forth in Ajay Hasia's case, supra, to preserve and cherish fundamental rights, should now be used by the Executive to strangle and scuttle another equally important right, in democratic process, relating to participation in elections. 14. There is no logic in excluding the employees of public sector undertakings from municipal elections. To illustrate, take the town of KGF, the population of which is virtually made of employees of two public sector undertakings (BEML and BGML) and their families. Similarly, the population of Dooravaninagar in Bangalore, is virtually made up of employees of ITI and their families. There is no reason why they should be prevented from having a say in the local self-Government. The employees of industries are normally a disciplined work force and form the backbone of urban population. They, as a category, are interested in the welfare of the area, where they reside. If they are elected, there will be no conflict between their duties and functions, as Councillors and their duties and functions, as employees of a public sector undertaking. The question of their misusing their position or power to any private benefit does not arise. In ....
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.... 3. My learned senior brother Justice Y. Bhaskar Rao, has in fact touched the depth of the constitutional provisions and considered the scope and object and also the precedents and norms laid down by the Apex Court and elaborately dealt with the constitutional validity of Section 26(1)(c) of the Karnataka Municipal Corporations Act, 1976 starting from Ajay Hasia's case, supra, and also after considering the qualifications prescribed for the election of President and Vice-President under Article 58 and Article 66 and the provisions of Article 191 of the Constitution of India and clearly observed that Section 26(1)(c) of the Karnataka Municipal Corporations Act is not ultra vires of the Constitution and the companies in which the petitioners are working are companies coming within the meaning of other authority' and further held that the petitioners were holding the office of profit and accordingly answered the reference in the negative with which I fully concur with the reasonings and findings. 4. My learned Senior brother Justice R.V. Raveendran, formulated two important points for adjudication which reads thus: "1. Whether Section 21(1)(c) of the Karnataka Muni....
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....office of profit under any local or 'other authority' under the control of the Government is disqualified from contesting the Municipal elections. In that view of the matter, the important question of law that arises for consideration is: "Whether the Public Sector Undertakings come within the meaning of 'other authorities' that too under the control of the State or Central Government?" If it is found that the employees were to hold the office of profit under 'other authority', then they are disqualified. 9. It deals with the disqualifications for being chosen as a Councillor. In order to disqualify such persons, firstly he should not hold an office of profit either under the Central Government or under the State. Secondly, he should not hold an office of profit under the local or other authority which are under the control of the Government as are declared by the Act and rules. 10. Now the question is, whether the employees of the BEML and Indian Telephone Industries are holding the office of profit and the Public Sectors do not come within the meaning of other authority. Insofar as, this aspect is concerned, the matter has stood at rest b....
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....r provision or they may be combination of these. It must be remembered that in order to be in pari materia, the Acts need not have been enacted simultaneously or that they should refer to one another. However, application of the rule that statutes in pari materia should be construed together is most justified in the case of provisions of the Acts relating to the same subject-matter, that were passed at the same or successive sessions of the legislature in the same year. In such cases, the probability that Acts relating to the same subject-matter were actuated by the same policy is very high for the Acts were enacted by the same men at almost the same time. This, of course, is subject to one overriding consideration that, unless the two enactments clearly indicate two different considerations. If the language of the two statutes in all respects is identical, no question of construing one Act with the assistance of the other Act can arise. It is only where one Act is ambiguous or some provision appears to be of doubtful meaning that the assistance is sought from another statute in pari materia to remove the doubt or ambiguity. It is only in such circumstances that assistance in ascer....
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....d in their widest sense but should be held as applying to objects, persons or things of the same general nature or class as those specifically enumerated, unless of course, there is a clear manifestation of a contrary purpose. Or to put it in a slightly different language, where general and special words which are capable of analogous meaning are associated together, they take colour from each other and the general words are restrained and limited to a sense analogous to the less general. The ejusdem generis doctrine has been described in the words of Lopes L.J., in Smelting Co. of Australia v Commissioner of Inland Revenue, as meaning "that where general words immediately follow or are closely associated with specific words, their meaning must be limited by reference to the preceding words". Ejusdem generis is not a rule of law, but a rule of construction, which enables a Court to ascertain the intention of the legislature when the intention is not clear and does not warrant the Court, the Court in subverting or defeating the legislative will by confining the operation of a statute within narrower limits than intended by the law makers. It should be resorted to not for the purpose....
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....ed into another". Thus it makes clear that it is the intention and purpose of the Act which has to be given effect to and not to give any other expression. 14. In V.D. Mahajan's "General Clauses Act, 1897", 'Local Authority' defined under Section 3(31) reads as follows: "Local Authority.--According to the definition "Local Authority" means a Municipal Committee, a District Board, a body of Port Commissioners, or other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund. It is clear that a Municipality is a "Local Authority", a District Board is a "Local Authority", a body of Port Commissioners is a "Local Authority" and likewise any authority which is given by the Government the power to control or manage a Municipal Fund or a Local Fund is a Local Authority. The definition of "Local Authority" can be divided into two parts. The first part is specific and mentions certain authorities. The second part is generic and covers any other authority legally entitled to or entrusted by Government with the control and management of a municipal or local fund. In actual practice, it is the ....
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....of the fact, the other authorities have also been constituted under the enactment of the Parliament and the Legislature. 21. In Maxwell's "Interpretation of Statutes", at page 232, the words 'and' and 'or' are expressed as follows: "In ordinary usage, "and" is conjunctive and "or" disjunctive. But to carry out the intention of the legislature, it may be necessary to read "and" in place of the conjunction "or", and vice versa." Therefore, ultimately it is the intention of the legislature that has to be given effect to under which the petitioners have been qualified according to the interpretation of Section 26(1)(c) of the KMC Act. 22. In P. Ramanatha Aiyar's, The Law Lexicon", the Encyclopaedic Law Dictionary, 1997 Edition at page 1141, the word 'Local Authority' is defined as follows: "Local Authority" means any body of persons for the time being invested by law with the control and administration of any matters within a specified local area. In the same book at page 1381, the expression "other authority" is defined which reads as follows: "The expression 'other authorities' includes all public authorit....
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....ption in relation to any matter; then in the absence of anything to the contrary contained in such or any other provision of this Act the (Central Government or Company Law Board) may accord, give or grant such approval, sanction, consent, confirmation, recognition, direction or exemption subject to such conditions, limitations or restrictions as it may think fit to impose and may, in the case of contravention of any such condition, limitation or restriction, rescind or withdraw such approval, sanction, consent, confirmation, recognition, direction or exemption. (2) Save or otherwise expressly provided in this Act, every application which may be or is required to be made to the (Central Government or Company Law Board) under any provision of this Act.- (a) in respect of any approval, sanction, consent, confirmation or recognition to be accorded by that Government (or Board) to, or in relation to, any matter; or (b) in respect of any direction or exemption to be given or granted by that Government (or Board) in relation to any matter; or (c) in respect of any other matter, shall be accompanied by such fee, as may be prescribed: P....
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....rovided to make the bye-laws. Article 120, Clause 22 reads as under: "to make bye-laws and vary and repeal them from time to time for the regulation of the business of the company, its officer and servants". A plain reading of the Articles of Association makes clear that in respect of the servants of the company to regulate their service conditions, the company is empowered to frame such rules. Therefore, it is clear that by virtue of the provisions of the Companies Act read with the Articles of Association constituted, even the services of the workmen are controlled by the company. It further makes clear within the ambit of the company, the rules framed thereunder, the companies are exercising their sovereign powers so as to control its employees in a particular manner. Therefore, there is no ambiguity in the language and therefore, cannot be said that the companies cannot exercise any sovereign powers in respect of their employees or workmen. 27. The, important question that has to be examined is whether by virtue of the enactments of the Central and State Governments, the Public Sectors are functioning under the control and authority of the Government, in order to....
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....ers. It is also to be noted that by virtue of the powers conferred under the enactment, even the Company Law was also enacted wherein it has also provided to make the rules. 30. In the Indian Penal Code, the words 'Public Servant' has been defined under Section 21, which reads: "Every person.-- (a) in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government; (b) in the service or pay of a local authority, a corporation established by or under a Central, Provincial or State Act or a Government company as defined in Section 617 of the Companies Act, 1956". The definition makes it clear that even a person working in any of the local authority or in a Government Company is deemed to be a public servant. 31. Similarly in "The Karnataka Lokayukta Act, 1984", Section 2(6) defines 'Government Servant' as follows.- "Government Servant" means a person who is a member of the Civil Services of the State of Karnataka or who holds a civil post or is serving in connection with the affairs of the State of Karnataka and includes any such person whose services are te....