The Government has the power under the proviso to Article 309 of the Constitution to regulate the service conditions of the Standing Counsel or Law officers of the State Public Undertakings or the Corporations or the co-operative Societies registered under the relevant law.

( 1 ) TWO members of this Bar ably supported by their learned Counsel sri V. Venkatramanaiah, raised an interesting question of law as to the pc wer of the Government under the proviso to Article 309 of the constitution to regulate the service conditions of the Standing Counsel or Law officers of the State Public Undertakings or the Corporations or the co-operative Societies registered under the relevant law. The Government in exercise of the power under the proviso to Article 309 of the Constitution amended the Andhra Pradesh Law Officers (Recruitment Conditions of service and Remuneration) Rules, 1967, for short, "the Rules", through g. O. Ms. No. 89 Law (Law Officers) dated September 21, 1981, amended the definition of Clauses in Rule 2 (b) (vii) and introduced another definition in Clauses in Rule 2 (b) (vii) and introduced another definition in Clauses 2 (d) (xi) State Public Undertakings" and incorporated Rules 3a, 3b, 8a and 8b and also invested transitionary power in the Government under Rule 8c (for short, "the Amended Rules" ).

( 2 ) THE petitioners mounted their attack on the power of the government to make amended Rules from two fronts. Firstly, it is their case that the power under the proviso to Article 309 could be exercised only to regulate the recruitment and to prescribe conditions of service of persons appointed to services or posts under the State. So long as there is no law made in that regard by the Legislature regulating the service conditions of employees under the Corporations, they are not public servants within the concept of Article 309 of the Constitution. The Law Officers or Standing counsel of these institutions are governed by the rules or regulations made by the respective institutions. Therefore, the rule making power under proviso to Art. 309 cannot be invoked to amend the Rules and make the amended Rules applicable to Standing Counsel of the Public Undertakings or Co-operative Societies registered under the Co-operative Societies Act. Alternatively it is contended that for the purpose of Part XIV of the constitution viz. , services under the Union and the State, the word "state" is to be interpreted under Article 367 read with Clause (58) of Sec. 3 of the general Clauses Act, 1897. The term "state" is defined under Art. 12 of the Constitution in a wider canopy. Since the Constitution itself made a distinction between the Government servant who has a statutory status from the employees of a Corporation, their services are governed by the regulations made, under the relevant law. So long as no regulations arc marie under the relevant laws or the bye-laws of a Society, the Service conditions of Law Officers cannot be regulated by exercise of the power under the proviso to Article 309 of the Constitution.

( 3 ) BEFORE posing the question for consideration it is necessary to note the undisputed facts viz. , that the Government have under its control several state Public Undertakings and the Corporations in which they have 51% paid up share capital of the principal Corporation or subsidiary units or the societies constituted under the relevant law viz. , Andhra Pradesh co-operative Societies Act, 1964, or Companies Act, as the case may be. It is also admitted that the Government have supervisory control over these Corporations. It is also cannot be disputed that the Corporations are independent legal entities but subject to the control of the Government. The area of controversy centres round the question whether the Government can interpose and interdict the power ot the Corporations to appoint a counsel of its choice to act or defend its case in a court of law by making Amended rules. It is now well settled law, as far as this State is concerned, that government is entitled, in exercise of the power under the proviso to Art. 309 of the Constitution to issue the Amended Rules and the Rules regulating the appointments, service conditions and remuneration of Law Officers.

( 4 ) IN t