JUDGMENT
Narasimham, C.J.
1. In this application under Articles 226 and 227 of the Constitution the petitioner, who is one of the Trade Unions of the workers of the Heavy Engineering Corporation Limited, Ranchi (hereinafter referred to as the company) has challenged the validity of the order of the Government of Bihar (vide notification III/DI- 1905/66 L & E-12795) dated the 15th November, 1966, passed in exercise of the powers conferred by Clause (d) of Sub-section (1) of Section (1) of the Industrial Disputes Act (hereinafter referred to as the Act) referring the following dispute between the employer and the workmen to the Industrial Tribunal, Bihar for adjudication namely.
(1) What should be the quantum of festival holidays which the workers of the Heavy Engineering Corporation Ltd., are entitled to?
(2) Whether the workers of the Heavy Engineering Corporation are entitled to 2nd Saturday off every month?
Apart from the State of Bihar (opposite party No. 1) and the Presiding Officer of the Industrial Tribunal (opposite party No. 3), the petitioner has impleaded the company as opposite party No. 2 and a rival workers Union of the same company, namely, the Hatia Project Workers’ Union as opposite party No. 4. There is keen rivalry amongst the Unions of Workers of the said company and there is also acute controversy as to who are the validly elected office bearers of some of those Unions. It is unnecessary to refer to them in detail in this petition.
2. Mr. Roy for the petitioner has challenged the validity of the said notification on the following two important grounds:
(1) The appropriate Government to make a reference under Section 10 of the Act is the Central Government and not the State Government.
(2) The very items referred to in the notification are now pending before the Certifying Officer exercising jurisdiction under the Industrial Employment (Standing Orders) Act 1946 (hereinafter referred to as the Standing Orders Act) on an application for modification of the standing orders and hence in the eye of law they have ceased to be “industrial disputes” for the purposes of the Act.
3. The company is one of those Government companies that have been constituted in several places in India whose constitution and control are regulated by the provisions of Sections 617 to 620 of the Companies Act, 1956. The entire share capital was contributed by the Central Government and all the sharps in the company are held by the president of India and a few officers of the Central Government. The memorandum of association and the articles of association confer extensive powers on the Central Government to give appropriate directions for the proper functioning of the company. Even the wages and salary of the employees are determined and paid in accordance with the directions of the Central Government. Annexure A attached to the petition shows that for the purposes of grant of project allowances to officers and staff of the company, sanction of the Government of India was obtained. The directors of the company are also appointed by the President of India. In the printed standing orders of the company filed before us the company was described as a “Government of India undertaking”. So far as the control of the Central Government over the working of the company is concerned, it may be stated that it is almost similar to the control exercised by the Central Government over the Sindri Fertilisers Limited referred to in AIR 1959 Pat 36, the Mazgaon Dock limited referred to in 1962-2 Lab LJ 693 : (AIR 1963 Bom 267) and Hindustan Antibiotics Ltd. referred to in AIR 1967 SC 948.
4. The expression “appropriate Government” has been definied in Section 2 (a) of the Act (omitting immaterial portion) as follows:
” ‘appropriate Government’ means
(1) in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government. . . . .Central Government, and
(2) in relation to any other industrial dispute, the State Government.”
The question for consideration is whether on the facts stated above (which indicate the nature and extent of the control exercised by the Central Government over the working of this company) it can be held that it is an industry carried on by or under the authority of the Central Government. Mr. Roy quite fairly conceded that he could not put forward the extreme contention that the industry was carried on by the Central Government. It is admittedly not a department of the Central Government. But he urged that in view of the extensive nature of the powers conferred on the Central Government to regulate even day to day working of the company, including the sanction of project allowances and other salaries of the employees, it should be held that it is a company carried on under the authority of the Central Government. An indication as to what is meant by the words “under the authority of” may be found in the definition of empoyer given in Clause (g) of Section 2 of the Act which says:
” ’employer’ means in relation to an industry carried on by or under the authority of any department of the Central Government or a State Government, the authority prescribed in this behalf or where no authority is prescribed, the head of the department.”
This seems to indicate that even in an industry which is not carried on by the
Central Government but is carried on under the authority of the Central Government, the employer may be none else but the head of the department. This is one of the reasons why the learned Judge of the Bombay High Court in Abdul Rehman Abdul Gafur v. Mrs. E. Paul, (1962) 2 Lab LJ 693 (AIR 1963 Bom 267) observed
”The phrase ‘under the authority of the Central Government contained in Section 2 (a) (1) must mean and is intended to apply to industries carried on directly under the authority of the Central Government. Industries which are carried on for their own purposes by incorporated commercial corporations which are governed by their own constitution as authorised by the Indian Companies Act, cannot be described as carried on under the authority of the Central Government. The obvious reason to support the above finding is that these corporations are independent legal entities and run the industries for their own purposes. Even when the Central Government controls these corporations, their industries are worked under the authority of their own constitutions or charters.”
5. With respect, I am in full agreement with these observations. The company has a distinct legal existence and the mere fact that the share holders are none else but the president and some officers of the Government of India cannot in any way affect its separate legal entity. It is true that the Government of India have extensive powers, but these powers are derived only from the memorandum and articles of association of the company The company is run for its own profit and in the seventh annual report for the year 1965-66 produced before us in the balance sheet it is clearly shown on the liabilities side that certain loans have been taken from the Government of India and that interest was payable on such loans This shows that in the eye of law the Government of India is a separate legal entity from the company I may also cite in this connection AIR 1967 S.C. 948 where on a dispute between the Hindustan Antibiotics Limited and its workmen a reference to the Industrial Tribunal was made by the Government of Maharashtra and not by the Central Government (see para 3 at page 952). It is true that the Counsel who argued that case did not raise a question about the invalidity of the reference on the ground that the appropriate Government to make the reference was the Central Government and therefore, there is no decision of their Lordships of the Supreme Court on this question. But considering the eminence of the Counsel who appeared in that case, it may be urged with some justification that if there was any doubt as to who was the appropriate Government that point would have been specially canvassed before their Lordships of the Supreme Court.
6. The phrase “under the authority of” occurring in Section 2(a) (1) has been construed in some of the judgments of the High Courts which may now be referred to. In Carlsbad Mineral Water Manufacturing Co. Ltd. v. P. K. Sarkar, AIR 1952 Cal 6, the learned Judges observed:
“An industry carried on by or under the authority of Government is a Government industry which as I have said may be carried on directly by Government or by somebody or person nominated by Government for that purpose. No business owned and carried on by a private person or a limited company can be a business carried on by or under the authority of Government.”
It is true that these observations were made at a time when in the old Companies Act there was no provision for constitution of Government companies. But this cannot make any difference in principle. So lone as the company retains a separate legal personality of its own distinct from the Government, any industry owned by the company and carried on in accordance with the provisions of the memorandum and articles of association can not be said to be carried on under the authority of the Government. In Bharat Glass Works (Private) Ltd. v. State of West Bengal, AIR 1957 Cal. 347 the earlier decision was followed and it was observed at page 349:
“For an industry to be carried on under the authority of the Central Government, it must be an industry belonging to the Central Government, that is to say, its own undertaking”.
In the eye of law, the industry cannot possibly be said to be owned by the Government.
7. I am aware that in Sindri Workers Union v. Commissioner of Labour. Bihar, AIR 1959 Pat 36 a Bench of this Court held that in respect of Sindri Fertilisers and Chemicals Limited “the appropriate Government” for the purpose of the Standing Orders Act was the Central Government and not the State Government. It is true that the constitution and working of the Sindri Fertiliser Company is almost identical with that of the company, but this decision cannot be of help here because the definition of “appropriate authority” in Section 2 (a) of the Standing Orders Act is quite different from the definition of the same expression in Section 2 (a) of the Act. In the Standing Orders Act “appropriate Government” is defined as meaning “in respect of industrial establishments under the control of the Central Government ….. the State Government”.
The words “under the control of” have a completely different meaning from the words “carried on under the authority of which occur in the Industrial Disputes Act. There is no doubt about the extensive nature of the control exercised by the Central Government, but merely because of such control it cannot be said that the industry is carried
on under the authority of the Central Government when in reality it is carried on by the company which has a separate legal existence of its own. In Subodh Ranjan Ghosh v. Sindri Fertilisers and Chemicals Ltd., AIR 1957 Pat 10, there are some observations of a Bench of this Court in respect of the Sindri Fertilisers Company which show that notwithstanding the extensive nature of the control exercised by the Central Government the company retained its separate personality. To quote their Lordships at page 15:
“The company has an independent legal entity and an independent legal existence and it cannot be said to be a department of the State Government or its delegate or agent. It is true that the ownership, control and management of the Company is completely vested in the President of India but I do not think that the Court is entitled for determination of the question in the present case to ‘pierce the veil of corporate entity and to examine the reality beneath’ “.
Their Lordships relied on the well known observation of Lord Denning in Tam-lin v. Hannaford, (1949) 2 All ER 327. It is only in exceptional circumstances that the Court is permitted to pierce the veil of incorporated companies to find out who are the persons interested in the same. But even for the purpose of application of fundamental rights for incorporated companies their Lordships of the Supreme Court in Tata Engineering and Locomotive Co. Ltd. v. State of Bihar, AIR 1965 SC 40 were not prepared to pierce the veil. On the other hand, in that decision at page 47 they re-affirmed the view that “the shareholders cannot claim that the property of the companies is their own and cannot plead that the business of the companies is their business in the strict legal sense”. These observations will apply with full force here. Though the shareholders of the company may be the President of India and his officers, they cannot claim to be the owners of the undertaking, nor can they say that the company’s business is their own business. Hence, the industry can not be said to be carried on under the authority of the Central Government. The mere description of this company as “a Government of India undertaking” in the Standing Orders for the indutrial establishments is by way of advertisement with a view to emphasise that it is a Government company and it can not make it an industry carried on under the authority of the Government of India. The first contention of Mr. Roy must, therefore, fail.
8. As regards the second point, it is admitted by the opposite parties that the two items in dispute referred to in the impugned notification are now pending before the Certifying Officer under the Standing Orders Act. The existing certified standing orders of the company dealing with the subject have been referred to in paragraph 5 of the counter-affidavit filed by the company. That para
shows that under the standing orders as they stand at present, the workmen are not entitled to any holiday during second Saturdays and the number of festival holidays for the workers of the company is limited to 8 per year.
9. Mr. Roy i’or the petitioner urged that as pointed out by their Lordships of the Supreme Court in several decisions, once staning orders are certified by the appropriate authority under the provisions of the Standing Orders Act, they obtain statutory force and the only method by which they can be modified is by an appropriate application under Section 10(2) of that. Act. According to him, therefore, so long as the standing orders remain unmodified, neither the employer nor the workmen will be permitted to raise the question of modification of standing orders “as an industrial dispute” for the purposes of the Act. According to him, if such a question is raised, it will be tantamount to asking a party to disobey the provisions of any statute which cannot possibly be done. He further invited our attention to the amendment made to the Standing Orders Act by Act 36 of 1956 by which the Certifying Officer was empowered “to adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders.” According to him, therefore, prior to the date of the amendment inasmuch as the Certifying Officer had no jurisdiction to adjudicate on the fairness or reasonableness of the provisions of the standing orders, an industrial dispute could validly be raised about the fairness or reasonableness of these provisions and that might be the subject matter of a valid reference under Section 10 of the Act, but once the power to adjudicate on the fairness and reasonableness is conferred on the Certifying Officer under the Standing Orders Act, it must be held on the principle of harmonious construction of the two Acts that the industrial court’s jurisdiction to ex-amine whether any of the existing provision of the standing orders are reasonable or far is taken away. He relied very much on the observations of Mukharji, J. of the Calcutta High Court in Haji Ismail Said and Sons (Private) Ltd. v. Fourth Industrial Tribunal, (1966) 2 Lab LJ 59 = (AIR 1966 Cal 375) where the learned Judge observed at page 67(of Lab LJ) = (at p 379 of AIR): “The indication seems to be that the standing order as such is not intended to be put into the melting pot as an industrial dispute under the Industrial Disputes Act under Section 7 thereof and read with the schedules thereunder.
….. It was not intended that a number of institutions, authorities and administrative agencies should thereafter be working at cross-purposes and dealing with the same problem, for that would lead not only to conflicts of decisions, but utter confusion in the field.”
10. This argument, though attractive, will not, I think, bear close scrutiny if we keep in mind the objects of the two Acts.
As pointed out by their Lordships of the Supreme Court in Rohtak and Hissar Districts Electric Supply Co. Ltd. v. State of Uttar Pradesh, AIR 1966 SC 1471, the primary object of the Standing Orders Act is “to secure to industrial employees clear and unambiguous conditions of their employment. The obvious object of the Act is to avoid any confusion in the minds of the employers or the employees in aspect of their rights and obligations concerning the terms and conditions of employment and thereby avoid unnecessary industrial disputes” (page 1476). But, the principal objects of the Industrial Disputes Act, as pointed out in Workmen of Dimakuchi Tea Estate v. Management, of Dimakuchi Tea Estate, AIR 1958 SC 353 at p. 358 are –
(1) the promotion of measures for securing and preserving amity and good relations between the employer and workmen:
(2) an investigation and settlement of industrial disputes, between employers and employers, employers and workmen, or workmen and workmen, with a right of re-presentation by a registered trade union or federation of trade unions or association of employers or a federation of associations of employers;
(3) prevention of illegal strikes and lockouts :
(4) relief to workmen in the matter of lay-off and retrenchment; and
(5) collective bargaining.
The Standing Orders Act cannot obviously deal with all these subjects. There is no provision therein for the Certifying Officer to grant interim relief while an application for modification of the standing orders is pending, nor has he jurisdiction to prohibit strikes or lock-outs during the pendency of the proceedings for modification of the standing orders Hence, if the workmen feel that some of the provisions of the existing standing orders are unfair and unreasonable and equire modification and threaten to go on strike thereby paralysing the activities of a key industry the Certifying Officer will be helpless He can only expedite the proceedings for modification of the standing orders and do nothing more On the other hand, under the Industrial Disputes Act once a reference is made to the Tribunal by the appropriate Government under Section 10 and an order prohibiting strike or lock-out is issued by the Government under Sub-section (3) of Section 10, a strike or lock-out will be illegal by virtue of Section 24 and persons who participate in such illegal strike or lock-out will have to face the penalties provided under the Act Thus, one of the main objects of the Act namely prevention of illegal strikes and lock-outs, can be achieved only if the appropriate Government has jurisdiction to refer an industrial dispute to the appropriate Tribunal under Section 10 even though that dispute may deal with nothing else but fairness or reasonableness of some of the provisions of the standing
orders. The only limitation is that the subject matter of the dispute must relate to the various items described in the second and third schedules of the Act. Here, there is no doubt that the two subjects referred for adjudication are relatable to item 4 of the third schedule.
11. It is true, as pointed out by Mukherji, J. in the aforesaid Calcutta decision, that if the Industrial Tribunal and the Certifying Officer are both engaged at the same time in examining the fairness and reasonableness of some of the provisions of the standing orders and the necessity for modifying the same, confusion may result. The Certifying Officer’s decision is subject to appeal before the Industrial court under Section 6 of the Standing Orders Act and a difficult question may arise as to whether the decision of the Industrial court will prevail or else whether the decision of the Industrial Tribunal under the Industrial Dispute Act will prevail. But such conflicts can always be avoided if the Certifying Officer on coming to know about the pendency of the same question before the Industrial Tribunal under the Act stays his proceedings. Here, the affidavit filed on behalf of the opposite parties dated 23-8-1967. (Annexure XX) shows that the Certifying Officer has stayed the proceedings pending before him in view of the pendency of this writ petition. He may also consider the advisability of staying his proceedings until the termination of the proceedings before the Industrial Tribunal on reference. The position is somewhat similar to litigation pending in two courts dealt with under Section 10 of the Code of Civil Procedure. One of the courts or tribunals must stay its proceedings if the subject matter dealt with by the two tribunals is identical. But it is difficult to accept the extreme contention of Mr. Roy that merely because the proceedings are pending before the Certifying Officer under the Standing Orders Act the dispute has ceased to be an industrial dispute and that no valid reference could be made to the Industrial Tribunal under Section 10 of the Act. The question is essentially one of propriety and not of legality.
12. Mr. Roy relied on Guest, Keen, Williams Pr. Ltd. v. P. J. Starling. AIR 1959 SC 1279, but that decision, in my opinion, does not support his extreme contention. There their Lordships pointed out the change effected in the Standing Orders Act by the amendment of 1956 and observed that prior to the amendment the Certifying Officer could not examine the fairness or reasonableness of any provision of a standing order and that the only remedy open to a workman was to raise an industrial dispute in that behalf. But their Lordships did not go further and say that after the amendment of 1956 no such industrial dispute could be raised and the only remedy open to the workmen was to apply to the Certifying Officer for modification of the standing order. To quote their Lordships’ own words (pages 1283-84): “Subsequent to the amendment of
the Act the employees can raise the samp dispute before the Certifying Officer or before the appellate tribunal and may in a proper case apply for its modification under Section 10(2) of the Act….. The
standing orders certified under the Act no doubt become part of the terms of employment by operation of Section 7; but if an industrial dispute arises in respect of such orders and it is referred to the tribunal by the appropriate government, the tribunal has jurisdiction to deal with it on the merits”.
13. I may in this connection observe that by Central Act 36 of 1956 (by which the Certifying Officer was conferred jurisdiction to adjudicate on the fairness and reasonableness of any of the provisions of the Standing Orders), some of the provisions of the Industrial Disputes Act were also amended. But the Parliament did not say either in the Act or in the Standing Orders Act that once the question of amendment of the standing orders is pending before a Certifying Officer that question cannot be raised as an industrial dispute for the purposes of the Act. They could have easily said so if the intention was as urged by Mr. Roy. Generally, when two tribunals have concurrent jurisdiction to deal with the same subject matter, the Legislature avoids conflict by express provision (see sub-section of Section 435 of the Code of Criminal Procedure). Here, the Parliament knew when they passed the Amending Act 36 of 1956 that the fairness or reasonableness of the provisions of any of the standing orders would by virtue of the amendment be justiciable both before the Certifying Officer and also before the Industrial Tribunal under the provisions of the Act nevertheless they gave no indication as to which of the two tribunals should stay its proceedings pending decision by the other tribunal.
14. I may also refer to a Mysore decision in Bangalore Woollen, Cotton and Silk Mills Co. Ltd. v. Its Workmen, (1965) 2 Lab LJ 13 (Mys) where a similar view was taken and it was held that an industrial dispute may legally be raised and referred to the tribunal under Section 10 of the Act even in regard to matters covered by the provisions of the existing standing orders.
15. The appropriate Government have undoubtedly considerable discretion in the matter. Once it is brought to their notice that the subject matter of the dispute is already pending before a Certifying Officer, they may not make any reference unless the matter is one of urgency requiring immediate action to prevent illegal strikes and lock-outs But if they do make such a reference, it is open to the authorities to move the Certifying Officer to keep the proceedings before him pending until the industrial dispute is decided by the Industrial Tribunal. Once such a decision is given by the Tribunal, the Certifying Officer may amend the standing orders accordingly because the decision of the Tribunal will be binding on
both the employer and the workmen of the industry (see Section 18 of the Act).
16. For these reasons, I dismiss this petition and hold that there is no invalidity in the notification of the Government dated the 15th November, 1966 (Annexure C). There will be no order as to costs.
K.B.N. Singh, J.
17. I agree.