An institution established not for profit within the meaning of Section 32(v)(c) of the Payment of Bonus Act, 1965, is an institution that does not have a commercial character, does not have its own assets, liabilities, and profit and loss scheme, and does not have a capital structure or a labour force.

Mishra, JThe question herein is whether the Tamil Nadu Water Supply and Drainage Board is an institution established not for purpose of profit and thus excluded from the purview of Section 32(v)(c) of the Payment of Bonus Act, 1965.

2. The appellants herein in their respective petitions under Art. 226 of the Constitution claimed that the Act would apply to their cases. The respondents maintained that it would not apply.

Learned Single Judge has held :

"The Board is an institution established not for purpose of profit within the meaning of Section 32(v)(c) of the Bonus Act. The dominant purpose of its getting established is not profit earning. It got constituted to execute schemes for providing protected water supply and adequate drainage facilities to urban and rural areas in the State of Tamil Nadu. It is service and social welfare oriented with no dominant purposes of earning profit. In this view it can claim the exemption under Section 32(v)(c) of the Bonus Act"

3. The appellants herein are Associations of different services of the Board. They have stated that the Board is a statutory body which came into existence under Section3 of the Tamil Nadu Water Supply and Drainage Board Act, 1970 with effect from April 14, 1971. Prior to its creation, all functions assigned to it were performed by the Public Health Engineering and Municipal Works Department of the State Government. All the assets and liabilities of the Public Health Engineering and Municipal Works Department except the assets and liabilities which the Government undertook by general or special order, vested in the Board and as one of the consequences, every person who immediately before the notified date was serving in connection with the affairs of the Department of Public Health Engineering and Municipal Works including the office of the Chief Engineer (Public Health Engineering and Municipal Works) under the Government, was as from that date deemed to have been allotted to serve in connection with the affairs of the Board and ceased to be an employee of the Government. Section30 of the Act which contemplated such transfer however also provided as under;

"Provided that the conditions of service applicable immediately before the notified date to any person shall not be varied by the Board to his disadvantage except with the previous approval of the Government.

Provided further that nothing contained in this section shall apply to any officer or other employee who has, by notice in writing, given to the Board within sixty days next following the notified date intimated his intention of not becoming an officer or other employee of the Board"

Besides those who were serving in connection with the affairs of the Department of Public Health Engineering and Municipal Works, several other categories of the State Government employees were transferred to the Board, but in their case Section31 of the Act would apply which contemplated,

"As soon as may be after the notified date, the Government may after consulting the Board direct by general or special order that such of the employees other than those employees referred to in Section 30 serving, immediately before the said date in connection with the affairs of the State as are specified in such order shall stand allotted to serve in connection with the affairs of the Board with effect on and from such date as may be specified in such order.

Provided that no such direction shall be issued in respect of such person without his consent for such allotment.

Provided further that the conditions of service applicable immediately before the notified date to any such person shall not be varied to his disadvantage except with the previous approval of the Government.

(b) With effect on and from the date specified in the order under clause (a) the persons specified in such order shall become employees of the Board and shall cease to be employees of the Government."

Besides the transfer of assets and liabilities, the money standing