2016 Supreme(SC) 438

SUPREME COURT OF INDIA
Dipak Misra and Prafulla C. Pant, JJ.
Nashik Workers Union - Appellant
Versus
Hindustan Aeronautics Limited - Respondent
Civil Appeal Nos. 9332-9333 of 2010
Decided on : 26-2-2016

IMPORTANT POINTS
As to appropriate Government for HAL, (1975) 4 SCC 679, (HAL 1) still holds the field and is a binding precedent.
Contribution of entire share capital by Central Government and held by the President of India and certain officers of the Central Government, extensive powers 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; flowing from the Company's memorandum of association and the articles of association; does not make the company an agent of the Central Government.
Similarly, merely discharge of public functions and duties by companies/corporations and societies will not make them agents of the Central or the State Government.
State Government is the appropriate Government for Hindustan Aeronautics Limited.

Headnote:(a) Binding Precedent – Judgment in HAL-2 not noticing earlier judgment in HAL-1 foundation for which flows from Heavy Engineering Mazdoor Union which has been approved by Constitution Bench judgment in SAIL – Further HAL-2 proceeds on undisputed facts but not stating the same – HAL-2 suggesting HAL as agent of Central Government without any discussion – HAL-2, held, not a binding precedent. (Para 26)

       2001 (4) S.C.T. 1 : (2001) 7 SCC 1; (1975) 4 SCC 679, (HAL 1); (1969) 1 SCC 765 – Relied upon

       (2007) 15 SCC 51, (HAL 2) – Distinguished

       (b) Industrial Disputes Act, 1947 – Section 2(a)(i) – Appropriate Government – Contribution of entire share capital by Central Government and held by the President of India and certain officers of the Central Government, extensive powers 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 – Flowing from the Company's memorandum of association and the articles of association – Does not make the company an agent of the Central Government – If the Corporation is established by a statute it can easily be identified as an agent of the Government – Certain statutory corporations are included in the definition but no public company of which the shares were exclusively owned by the Government – Merely discharge of public functions and duties by companies/corporations and societies will not make them agents of the Central or the State Government – Held, HAL-1 holds the field and the appropriate government in instant case would be State Government. (Para 8, 15, 16, 25)

       2001 (4) S.C.T. 1 : (2001) 7 SCC 1; (1975) 4 SCC 679, (HAL 1); (1969) 1 SCC 765; 2010(3) S.C.T. 716 : (2010) 8 SCC 480 – Relied upon

       2000 (1) S.C.T. 840 : (1999) 7 SCC 59; (1979) 3 SCC 489; (1980) 3 SCC 459; 1984 Supp. SCC 443; (1985) 2 SCC 294; (1997) 9 SCC 377 – Referred

       (2007) 15 SCC 51, (HAL 2) – Distinguished

       Facts of the case:

       This case relates to interpretation of the term ‘appropriate Government’ under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.

       The appellant, Nashik Workers Union, filed a complaint under the 1971 Act for reinstatement of the trainees with continuity of services and back wages. During the pendency of the first complaint, as further employees were relieved, another complaint being was filed. With the passage of time, two other complaints also came to be registered before the Presiding Officer-Judge, Labour Court, Nasik.

       The Labour Court declared that the employer had engaged in unfair labour practices in terminating the services of the employees and, accordingly, directed for reinstatement of the employees with continuity of service and full back wages from the date of termination till reinstatement.

       The Industrial Court, affirmed the order passed by the Labour Court and dismissed the revision applications.

       The orders passed by the Labour Court and Industrial Court were assailed in Writ Petition wherein a contention was raised that the "appropriate Government" in respect of the dispute was the Central Government and not the State Government and, therefore, the 1971 Act would not apply and consequently, the complaints filed by the workers' union deserved to be dismissed. The single Judge allowed the Writ Petition and directed the employer to make an offer to some trainees as and when regular vacancies arise for consideration and in the event they fulfill the required qualification then to consider them for regular job.

       The Division Bench opined that the appropriate Government for the purpose of the Industrial Disputes Act, 1947 is the Central Government which is the appropriate Government in relation to the company and, accordingly, the complaints filed by the Union against the company were not maintainable. Being of this view, it allowed the appeal and set aside the finding recorded by the learned single Judge.

       Finding of the Court:

       HAL-1 still holds the field.

       Result: Appeals are allowed and the impugned order set aside. L.P.A. No. 144 of 2002 remitted to the High Court to be adjudicated on merits.