PATNA HIGH COURT
V.Ramaswami and R.K.Choudhary JJ.
Sindri Workers Union
Versus
Commissioner Of Labour
Miscellaneous Judicial Case No. 672 of 1956 ;
Decided On : AUGUST 14, 1958
INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946 - APPROPRIATE GOVERNMENT - CONTROL OF INDUSTRIAL ESTABLISHMENT - INTERPRETATION - CENTRAL GOVERNMENT - SHAREHOLDING - ARTICLES OF ASSOCIATION - PRESIDENT OF INDIA - ARTICLES 77, 298, 299 OF THE CONSTITUTION.
Fact of the Case:
The Sindri Workers Union, a registered trade union of workers at Sindri Fertilizers and Chemicals Limited (Company), challenged the jurisdiction of the Labour Commissioner of Bihar to certify the Company's draft standing orders under the Industrial Employment (Standing Orders) Act, 1946 (Act XX of 1946). The Company, a private limited company with its registered office in Sindri, Manbhum, submitted the draft standing orders to the Labour Commissioner for certification. The Union contended that the Regional Labour Commissioner of the Union of India at Dhanbad was the proper certifying officer as the Company was an industrial establishment under the control of the Central Government.
Finding of the Court:
The High Court held that the Labour Commissioner of Bihar lacked jurisdiction to certify the Company's draft standing orders. The Court found that the Company was an industrial establishment under the control of the Central Government within the meaning of Section 2(b) of Act XX of 1946, and therefore, the appropriate Government was the Central Government, not the State Government.
Issues: 1. Whether the Labour Commissioner of Bihar had jurisdiction to certify the Company's draft standing orders under Act XX of 1946. 2. Whether the Company was an industrial establishment under the control of the Central Government within the meaning of Section 2(b) of Act XX of 1946.
Ratio Decidendi: 1. The Court interpreted Section 2(b) of Act XX of 1946, which defines "appropriate Government" in respect of industrial establishments under the control of the Central Government or a Railway Administration or in a major port mine or oilfield, as the Central Government. 2. The Court held that the test for determining whether an industrial establishment is controlled by the Central Government is whether the Central Government has control over the industrial establishment under the Articles of Association in the case of a private limited company or by the provisions of the special statute in the case of a public corporation. 3. The Court found that the Company was under the control of the Central Government based on the Articles of Association, which provided that the President of India had complete control over the working of the Company, including the power to appoint and remove Directors and issue directives.
Final Decision: The High Court issued a writ of certiorari quashing the order of the Labour Commissioner of Bihar certifying the Company's draft standing orders and the order of the appellate authority upholding the certification.
V.Ramaswami, J.
1. In this case the petitioner is a registered trade union, called the Sindri Workers Union, which is constituted of workers of the Sindri Fertilizers and Chemicals Limited, which is a private limited company with its registered office at Sindri in the district of Manbhum. Under Sec.3 of the Industrial Employment (Standing Orders) Act, 1946 (Act XX of 1946), the Sindri fertilizers and Chemicals Limited (hereinafter referred to as the Company) submitted to the Labour Commissioner of Bihar at Patna the draft standing orders for the purpose of certification under the Act.
Under Sec. 5 (1) of the Act the Labour Commissioner of Bihar served a copy of the draft standing orders on the petitioner. In the proceedings for certification the petitioner objected that the Labour Commissioner of Bihar was not the proper authority to certify the standing orders of the company. It was contended on behalf of the petitioner that the Regional Labour Commissioner of the Union of India, whose office was at Dhanbad, was the proper certifying officer.
The Labour Commissioner, Bihar, did not consider the objection raised by the petitioner but certified the draft standing orders of the company by his order dated 24-1-1955. The petitioner took the matter in appeal before the appellate authority for standing orders, namely, respondent No. 2, and the objection taken in appeal was that the Commissioner of Labour, Bihar, was not the proper certifying officer for standing orders of the company under Act XX of 1946. The objection was overruled by respondent No. 2 and the appeal of the petitioner was dismissed by his order dated 4-7-1956, and it was held by respondent No. 2 that the appropriate Government under Sec.2 (c) of the Act was the Government of Bihar and, therefore, the Commissioner of Labour, Bihar, had jurisdiction to certify standing orders.
In these circumstances the petitioner has obtained a rule from the High Court calling upon the respondents to show cause why a writ in the nature of certiorari under Article 226 of the Constitution should not be issued for quashing the order of the Labour Commissioner, Bihar, dated 24-1-1955, certifying the draft standing orders, and also the order of the appellate authority, dated 4-7-1956. Cause has been shown in this case by the learned Government Advocate on behalf of the respondents.
2. It is necessary at this stage to set out the relevant statutory provisions. Sec.2 (b) of Act XX of 1945 is in the following terms :
"2. (b) Appropriate Government means in respect of industrial establishments under the control of the Central Government or a Railway Administration or in a major port mine or oilfield, the Central Government, and in all other cases, the State Government."
Sec.2 (c) defines :
" Certifying Officer as the Labour Commissioner wherever he exists or in his absence an officer appointed by the appropriate Government by notification in the official Gazette to exercise in such area as may he specified in the notification, the functions of a Certifying Officer under this Act." Section 2 (a) states as follows ; "2. (a) Appellate Authority means an Industrial Court, wherever if exists or in its absence an authority appointed by the appropriate Government by notification in the official Gazette to exercise in such area as may be specified in the notification, the functions of an appellate authority under this Act.
Sec.3 of the Act provides for submission of draft standing orders to the certifying officer, Sec.3 reads as follows :
"3. Submission of draft standing orders. (1) Within six months from the date on which this Act becomes applicable to an industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in his industrial establishment.
(2) Provision shall be made in such draft for every matter set out in the Schedule which may be applicable to the industrial establishment, and where model stan
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