JUDGMENT
S.B. Majmudar, C.J.
1. A short question is involved in this appeal which is moved by the employees’ union representing workmen engaged by respondent No. 1. The question rotates round the interpretation of certain words found in Section 11(1) (c) of the Andhra Pradesh Factories and Establishments (National, Festival and other Holidays) Act, 1974. Under that Act, certain national festivals and other holidays are declared as paid holidays and they are required to be observed in the factories and establishments in this State which are governed by the Act. Further, Section 3 of the Act lays down that every employee shall be allowed in each calendar year a holiday of one whole day on the 26th January, 1st May, 15th August and 2nd October and four other holidays for such festivals as may be notified by the Government or by such other authority as may be prescribed. The appellants contend that the employees of the first respondent are entitled to get the benefit of the aforesaid, holidays amongst others, on 1st May. That claim of the appellants was rejected by the first respondent placing reliance on section 11(1) (c). Section 11 deals with exemptions and it reads as under :
“11. Exemptions : (1) Nothing in this Act shall apply to :
a) any employee in a position of management;
b) any employee whose work involves travelling;
c) any factory, or establishment under the control of the Central or State Government, local authority, Reserve Bank of India, a railway administration operating any railway as defined in clause (20) of Article 306 of the Constitution of India, or a cantonment authority; or
d) any mine or oil field :
2) The Government may, by notification and for reasons to be specified therein, exempt either permanently or for any specified period, any factory or establishment or class of factories or establishments or person or class of persons from all or any of the provisions of this Act. Subject to such conditions as the Government may deem fit”.
If therefore, becomes clear that if section 11(1) (c) applies on the facts of the present case then the employees of the first respondent would not be entitled to a paid holiday on 1st May for which they put forward their claim. As the first respondent had rejected that claim they moved this Court. The learned single Judge of this Court, in the writ petition moved by them, took the view that Section 11(1) (c) applies to the facts of the present case as the first respondent is a concern which is under the deep and pervasive control of the Central Government. For coming to that conclusion, the learned single Judge considered the Memorandum of Association and the various articles of association of the first respondent-concern. The learned Judge noted that at page 10 of the Memorandum of Association it was mentioned that the President of India and two of the Secretaries to the government are described as subscribers to the capital. Then the learned Judge referred to the Articles of Association and observed that Article 6 lays down that subject to the directions of the President, the shares shall be under the control of the Board of Directors. Articles 23 is to the effect that the President may authorise the amount of capital and prescribe the terms and conditions on which it shall be raised. Article 28 lays down that subject to the approval of the President of India, the company, in its general body meeting, from time to time, subdivide or consolidate its share or any of them in exercise of the other powers conferred by Section 94 of the Companies Act. Article 31 lays down that subject to the approval of the President, the Board of Directors may, from time to time, reduce the capital of the company. Article 116 lays down that the President of India may, from time to time, issue directions to the company in regard to the conduct of the business and affairs of the company or Directors thereof and to ensure that the Directors shall give immediate effect to the directives so issued. These Articles of Association are signed by the President of India and other officers of the Government – Joint Secretary, Ministry of Finance. Considering these Articles and the Memorandum of Association, the learned Judge took the view that respondent No. 1 is under the deep and pervasive control of the Government of India. In our view, the said finding of the learned Judge cannot be faulted from any angle. These Articles and the Memorandum of Association speak for themselves and clearly project a picture wherein respondent No. 1 is found to be a concern which is under the comprehensive control of the government of India through the President of India. Therefore, Section 11(1) (c) squarely gets attracted on the facts of the present case as respondent No. 1 must be held to be an establishment under the control of the Central Government.
2. Learned counsel for the appellants, however, vehemently contended that the phrase “under the control of the Central Government” as employed in S. 11(1) (c) must mean disciplinary control or a control analogous to the control which the High Court exercises over the subordinate Courts under art. 235 of the Constitution of India. It is not possible to agree with these contentions. In support of this contention, the learned counsel for the appellants strongly relied upon the decision of the Supreme Court in the case of Corporation of Nagpur v. Ramachandra G. Modak, . Now, in that case, the question before the Supreme Court was : Whether the Commissioner of Nagpur Municipal Corporation could suspend a municipal employee. The High Court of Bombay had found that the Commissioner had no such power. Reversing the said decision, the Supreme Court, placing reliance on S. 59(3) of the city of Nagpur Corporation Act, held that the Commissioner had the authority to suspend a municipal employee. For that purpose, the words employed by the legislature in S. 59(3) to the effect that the Commissioner shall also “exercise supervision and control over the acts and proceedings of all municipals officers and servants” were pressed into service. Now it becomes obvious that the power to exercise supervision and control would naturally include supervision and disciplinary control and, to that extent, the analogy of Art. 235 can be pressed into service. In the present case, S. 11(1) (c) does not employ the words “supervision and control”. All that is required is “control”. So far as that “control” is concerned, as Art. 12 of the Constitution is concerned, it cannot be seriously disputed that the first respondent would be covered by the said Article and, in fairness, learned counsel for the appellants, also did not dispute that proposition. If that is so, the question that survives is : Whether an entity which is ‘State’ within the meaning of Art. 12 of the Constitution can be said to be under the control of the Central Government for the purpose of S. 11(1) (c)? This question is squarely answered by the High Court against the appellants by the decision of Jayachandra Reddy, J. in HMT Workers and Staff Union v. HMT, 1981 (2) ALT 409. Considering Art. 12 and the present Act and the very same section, namely, S. 11(1) (c), it was held that Hindustan Machine Tools Limited is ‘State’ within the meaning of art. 12 of the Constitution and is also a factory under the control of the Central Government for the purpose of S. 11(1) (c) of the Act. The learned Judge observed in that connection that the tests which are relevant for considering whether a particular establishment is under the control of the Central Government or not for the purpose of Art. 12 do not become irrelevant for the purpose of considering whether the Hindustan Machine Tools Limited is an establishment under the control of the Central Government for the purpose of S. 11(1) (c) of the Act. The words occurring in both are the same. If Hindustan Machine Tools Limited is under the control of the Central Government for the purpose of Art. 12, then it is equally so for the purpose of S. 11(1) (c) of the Act, and it was, therefore, concluded that Hindustan Machine Tools Limited is not only ‘State’ within the meaning of Art. 12 of the Constitution but also a factory under the control of the Central Government for the purpose of S. 11(1) (c) of the Act. We respectfully agree with the said reasoning adopted by the learned Judge. We may also mentioned that subsequently the Supreme Court also took the same view in the case of C. V. Raman v. Management of Bank of India, 1988 II CLR 69. The question before the Supreme Court was : Whether the State Bank of India and nationalised banks were under the deep and pervasive control of the Central Government and whether they can be said to be establishments to which the establishment Acts of Tamil Nadu, Andhra Pradesh and Kerala apply? Taking the view that these acts did not apply to these banks and that they were under the deep and pervasive control of the Central Government, Ojha, J., speaking for the Supreme Court Bench, made the following pertinent observation :
“As regards the first reason referred to above, we have already pointed out that even if the decisions dealing with Art. 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein referred to above particularly with regard to deep and pervasive control are relevant for deciding the point in issue, the principles enumerated therein referred to above particularly with regard to deep and pervasive control are relevant for deciding the point in issue”.
The point in issue before the Supreme Court was whether the phraseology employed by the legislature, namely, establishment under the Central or State Governments required that such establishments should be under the managerial or administrative control of the Central or State Government. Answering this question in the negative, it was held that to be an establishment under the Central or State Government it was not necessary that it should be under the managerial control as that view would have been possible if the phraseology used was establishment ‘of the Central Government’ instead of ‘establishment under the Central Government’. The ratio of the earlier decision of the Supreme Court in Ajay Hasia v. Khalid Mujib, was extracted with approval to the following effect (at page 493) :
“It is undoubtedly true that the Corporation is a distinct juristic entity with a Corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the Government. It is really the Government which acts through the instrumentality or agency of the Corporation and the juristic veil of Corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government”.
3. In view of this decision of the Supreme Court, it must be held that the reasoning adopted by the learned Judge of this Court in HMT Workers And Staff Union case (supra) gets approved by the aforesaid decision of the Supreme Court. Learned Counsel for the appellants, however, invited our attention to another decision of a learned single Judge of this Court in APSRTC v. Sivaji, 1986 (2) ALT 527. There, the learned Judge took the view that the State Road Transport Corporation is not under the control of the State Government within the meaning of S. 11(1) (c) of the Act. In that case the learned Judge has held that the word ‘control’ as employed by S. 11(1) (c) must be disciplinary control and he was not inclined to draw upon the connotation of the word ‘control’ as found in Art. 12 of the Constitution for determining whether the authority was a ‘State’. With respect, this reasoning cannot be accepted for the obvious reason that the latter decision of the Supreme Court in C. V. Raman’s case (supra) contra indicates this reasoning and takes a different view. It must, therefore, be held that this does not stand impliedly overruled by the aforesaid decision of the Supreme Court in so far as it takes the view that the concept of ‘deep and pervasive control’ relevant under Art. 12 of the Constitution cannot be imported while deciding the question u/s. 11(1) (c) of the Act.
4. For all these reasons, therefore, it must be held that the learned single Judge was right when he took the view that because of S. 11(1) (c) of the Act the appellants were not entitled to claim the benefit of a paid holiday on 1st May pursuant to S. 3 of the Act, as the said provisions were excluded from operation so far as the facts of the present case are concerned. In the result, this appeal fails and is dismissed. No costs.
5. Oral request of the learned counsel for the appellants for leave to appeal to the Supreme Court is rejected as the question is squarely covered by the decision of the Supreme Court in C. V. Raman’s case (supra).