1999 Supreme(SC) 422

1999(3) Supreme 346
Supreme Court of India
(From Patna High Court)
Mrs. Sujata V. Manohar and K. Venkataswami, JJ.
Sh. Aklu Ram Mahto -Appellant
versus
Sh. Rajendra Mahto -Respondent
Civil Appeal No. 7538 of 1997
With
C.A. No. 7644 of 1997
Decided on 1-4-1999
Counsel for the Parties :
For the Appellant : R. Sundravardhan, Sr. Advocate, Prashant Kumar, Vijay Kumar, B.K. Sharma, Kumar Parimal, A.V. Rao, Advocates.
For the Respondent : S.K. Verma, M.K. Choudhary, A. Sharan, Advocates.

Important Points
1. Where nomination papers filed by persons working as Khalashi and Meter Reder in Bokaro Steel Plant were rejected on the ground that they were Managing Agents of the Company, the rejection of nomination paper on the face of it being wrong, election of the returned candi­date was set aside.
2. Khalashi and Meter Reader working in Bokaro Steel Plant, a Company whose entire shareholding is held by Central Government, whose ap­pointment and removal is not exercised by Government nor control over their work was exercised by Government cannot be considered as holding office of profit under the Central Government within meaning of Arti­cle 191 of the Constitution of India.

Headnote:(i) Representation of People Act, 1951-Section 10 read with Article 191 of the Constitution of India-Disqualification-Office under Govern­ment Company-Res­pon­dents working as khalashi and Meter Reader in Bokaro Steel Plant -Company’s entire share holding held by Government-Rejection of nomination paper filed by respondents on ground respondents were Managing Agents of Company-Rejection order, on the face of it unsustainable-Posts held by res­pondents were non-executive posts -They were not subject to control of Central Govern­ment nor power of appointment or removal exercised by Central Govern­ment-They were not holding office of profit under Government - Nomina­tion papers wrongly rejected-Election of returned candidate set aside.

       Held : The order of the Returning Officer is, on the face of it, unsus­tainable. Rajendra Mahto who was at the post of a Khalashi which is at level L-III in the gradation of workers, is holding a non-executive post. Ashok Kumar Srivastava who was working as a Meter Reader was working at level L-VII. Both these posts are non-executive posts. Section 10 disqualifies only the Managing Agent, Secretary or Manager of any company, in the capital of which the appropriate Government has not less than 25% share holding. Obviously, neither of them is either Secretary or Manager. A Managing Agent is a person who had been en­trusted with the management of the whole or substantially the whole of the affairs of a company. Quite clearly, neither of the respondents is in-charge of the affairs of Bokaro Steel Plant and cannot be considered as Managing Agent of the Bokaro Steel Plant. The rejection of the nomination papers of the two respondents was, therefore, wholly erroneous. (Paras 5 & 6)

       The nomination papers of the two respondents were wrongly rejected and hence the election of the appellant was required to be set aside under Section 100 of the Representation of the People Act, 1951. (Para 16)

       (ii) Constitution of India-Article 191 read with Section 10 of Representa­tion of People Act, 1951 -Disqualification for being chosen as MLA/MLC-Office of profit under Government of India-Respon­dents were working on Khalashi and Meter Reader in Bokaro Steel Plant-Post non-executive-Appoin­t­ment or removal not exercised by Central Government-Control over work not exercised by Government-Respondents cannot be considered as holding office of profit under Central Govern­ment.

       Held : The Bokaro Steel Plant is under the management and control of the Steel Authority of India Ltd. This is a company incorporated under the Companies Act. Undoubtedly, its shares are owned by the Central Gov­ernment. The Chairman and the Board of Directors are appointed by the President of India. However, the appointment and removal of workers in Bokaro Steel Plant is under the control of the Steel Authority of India Ltd. Their remuneration is also determined by the Steel Authority of India Ltd. The functions discharged by the Steel Authority of India Ltd. or by the Bokaro Steel Plant cannot be considered as essential functions of the Government. Amongst the objects of the Steel Authority of India Ltd. set out in the Memorandum of Association are to carry on in India or elsewhere the trade or business of manufacturing, prospecting, rais­ing, operating, buying, selling, importing, exporting, purchasing or otherwise dealing in iron and steel of all qualities, grades and types. These objects also include rendering consultancy service to promote and organise an integrated and efficient development of iron and steel industry and to act as an agent of the Government/public sector financial institutions in the manner set out in the Objects clause. In this context a worker holding the post of a Khalashi or a Meter Reader is not subject to the control of the Central Government nor is the power of his appointment or removal exercised by the Cen­tral Government. Control over his work is exercised not by the Government, but by the Steel Authority of India Ltd. The respondents cannot, therefore, be considered as holding an office of profit under the Central Government. (Para 15)

       The nomination papers of the two respondents were wrongly rejected and hence the election of the appellant was required to be set aside under Section 100 of the Representation of the People Act, 1951. (Para 16)