{"id":204538,"date":"2007-09-21T00:00:00","date_gmt":"2007-09-20T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/mohammad-sadiq-ors-vs-state-of-uttar-pradesh-ors-on-21-september-2007"},"modified":"2015-06-19T07:18:38","modified_gmt":"2015-06-19T01:48:38","slug":"mohammad-sadiq-ors-vs-state-of-uttar-pradesh-ors-on-21-september-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/mohammad-sadiq-ors-vs-state-of-uttar-pradesh-ors-on-21-september-2007","title":{"rendered":"Mohammad Sadiq & Ors vs State Of Uttar Pradesh & Ors on 21 September, 2007"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Mohammad Sadiq & Ors vs State Of Uttar Pradesh & Ors on 21 September, 2007<\/div>\n
Author: . A Pasayat<\/div>\n
Bench: Dr. Arijit Pasayat, Lokeshwar Singh Panta<\/div>\n
           CASE NO.:\nAppeal (civil)  4590 of 2004\n\nPETITIONER:\nMohammad Sadiq & Ors\n\nRESPONDENT:\nState of Uttar Pradesh & Ors\n\nDATE OF JUDGMENT: 21\/09\/2007\n\nBENCH:\nDr. ARIJIT PASAYAT & LOKESHWAR SINGH PANTA\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T<\/p>\n
CIVIL APPEAL NO. 4590 OF 2004
\n[With Civil Appeal No.4606 of 2004]<\/p>\n
Dr. ARIJIT PASAYAT, J.\n<\/p>\n
1.\tThese appeals are inter-linked and are directed against
\ncommon judgment of the Allahabad High Court.  By the
\nimpugned judgment the order passed by the learned Single
\nJudge was set aside.\n<\/p>\n
2.\tBackground facts in a nutshell are as follows:\n<\/p>\n
\tRetrenched employees of Institute of Engineering and
\nRural Technology (for short ‘IERT’), 105 in number, filed a writ
\npetition against the State of U.P. and its functionaries as well
\nas the IERT praying for quashing the order dated 24.3.1999 by
\nwhich it was decided that the Training-cum-Production Centre
\nof IERT was to be closed down w.e.f. 31.3.1999 and the
\nworkmen employed were to be retrenched after paying
\ncompensation.\n<\/p>\n
\tWhile allowing the writ petition the learned Single Judge
\ngave directions which essentially read as follow:-\n<\/p>\n
“The respondents are directed to prepare a
\nlist of the employees who were appointed prior
\nto 1.10.1986 in the production-cum-training
\nCentre of IERT, and were working
\ncontinuously till the date of their retrenchment
\ni.e. 31.3.1999 by excluding those who have
\nretired, or have not given their option for
\nabsorption, to be absorbed in the vacancies in
\nother polytechnics of the State of Government,
\nwhich are recognized and funded or in any
\nother technical institution, or any post which it
\nmay deem to be fit, in accordance with their
\neligibility and after relaxing age and other
\nterms and conditions of recruitment.  As and
\nwhen petitioners are offered absorption on any
\nequivalent post, they will vacate the quarters
\noccupies by some of them in the premises of
\nIERT. Since petitioners have accepted
\nretrenchment compensation, no direction with
\nregard to payment of salary is required to be
\ngiven.  The State Government is directed to
\ndraw the list, prepare the scheme and to offer
\nappointment by absorption, preferably within a
\nperiod of four months.  There is no order as
\ncost.”\n<\/p>\n
3.     \tThe present respondents questioned correctness of the
\norder by filing special appeal before the High Court. By the
\nimpugned judgment the High Court allowed the special
\nappeal. It held that IERT is not an instrumentality of the State
\nand\/or could not be termed to be State Government or a
\npublic Corporation. It was held that the finding of learned
\nSingle Judge that IERT is wholly owned, controlled and
\nmanaged by the State Government is not correct.\n<\/p>\n
4.\tLearned counsel for the appellants submitted that the
\nbasic questions are as follows:-\n<\/p>\n
(a)\tWhether IERT was an instrumentality of the State.\n<\/p>\n
(b)\tWhether the Uttar Pradesh Absorptions of Retrenched
\nEmployees of Government\/Corporations in Government
\nService Rules, 1991 (in short the ‘Absorption Rules’) is
\napplicable to the writ petitioners-appellants.\n<\/p>\n
(c)\tWhether after receiving compensation, the concerned
\nemployees could question the closure.\n<\/p>\n
5.\tIt was submitted that IERT is registered under the
\nSocieties Registration Act, 1860 (in short the ‘Societies Act’)
\nand in terms of the Absorption Rules the concerned employees
\nwere entitled to be given protection of the Absorption Rules.  It
\nis submitted that the expression “established” means that the
\ninstitution has come into existence and, therefore, even
\nthough IERT has been registered under the Societies Act, that
\ndoes not mean it is not established or constituted under any
\nUttar Pradesh Act.\n<\/p>\n
6.\tIn response, learned counsel for the respondent
\nsubmitted that the concept of “established” or “constituted” is
\ndifferent from a body registered under the Societies Act.\n<\/p>\n
7.\tThe contentions raised need consideration.  It has been
\naccepted that there was no material placed before the High
\nCourt to establish that IERT is an instrumentality of the State.
\nIn Pradeep Kumar Biswas v. Indian Institute of Chemical
\nBiology and Ors.<\/a> (2002 (5) SCC 111), it has been clearly stated
\nthat even if a society or institute is registered under the
\nSocieties Act and some functionaries of the State Government
\nand other members of the institute, such an institute may not
\nbe termed as an instrumentality of the State, if deep and
\npervasive control over the affairs of the institute was not with
\nthe State Government.  Texts formulated in Ajay Hasia and
\nOrs. v. Khalid Mujib Sehravardi and Ors.<\/a> (1981 (1) SCC 722)
\nwere highlighted. There is basic distinction between a society
\nand a corporation. In Board of Trustees, Ayurvedic and Unani
\nTibia College, Delhi v. State of Delhi (Now Delhi
\nAdministration) and<\/a> another (AIR 1962 SC 458), it was inter
\nalia held as follows:\n<\/p>\n
“(9)\tThe first and foremost question is
\nwhether the old Board was a corporation in the
\nlegal sense of that word. What is a
\nCorporation? Corporations may be divided into
\ntwo main classes, namely, corporations
\naggregate and corporations sole. We are not
\nconcerned in the present case with corporation
\nsole. “A Corporation aggregate has been
\ndefined as a collection of individuals united
\ninto one body under a special denomination,
\nhaving perpetual succession under an artificial
\nform, and vested by the policy of the law with
\nthe capacity of acting in several respects as an
\nindividual, particularly of taking and granting
\nproperty, of contracting obligations and of
\nsuing and being sued, of enjoying privileges
\nand immunities in common, and of exercising
\na variety of political rights, more or less
\nextensive, according to the design of its
\ninstitution, or the powers conferred upon it,
\neither at the time of its creation or at any
\nsubsequent period of its existence”. (Halsbury’s
\nLaws of England, 3rd Edn. Vol. 9, page 4.) A
\ncorporation aggregate has therefore only one
\ncapacity, namely, its corporate capacity. A
\ncorporation aggregate may be a trading
\ncorporation or a non-trading corporation. The
\nusual examples of a trading corporation are (1)
\ncharter companies, (2) companies incorporated
\nby special acts of parliament, (3) companies
\nregistered under the Companies Act, etc. Non-
\ntrading corporations are illustrated by (1)
\nmunicipal corporations, (2) district boards, (3)
\nbenevolent institutions, (4) universities etc. An
\nessential element in the legal conception of a
\ncorporation is that its identity is continuous,
\nthat is, that the original member of members
\nand his or their successors are one. In law the
\nindividual corporators, or members, of which it
\nis composed are something wholly different
\nfrom the corporation itself; for a corporation is
\na legal persona just as much as an individual.
\nThus, it has been held that a name is essential
\nto a corporation; that a corporation aggregate
\ncan, as a general rule, only act or express its
\nwill by deed under its common seal; that at the
\npresent day in England a corporation is
\ncreated by one or other of two methods,
\nnamely, by Royal Charter of incorporation from
\nthe Crown or by the authority of Parliament
\nthat is to say, by or by virtue of statute. There
\nis authority of long standing for saying that the
\nessence of a corporation consists in (1) lawful
\nauthority of incorporation, (2) the persons to
\nbe incorporated, (3) a name by which the
\npersons are incorporated, (4) a place, and (5)
\nwords sufficient in law to show incorporation.
\nNo particular words are necessary for the
\ncreation of a corporation; any expression
\nshowing an intention to incorporate will be
\nsufficient.\n<\/p>\n
10. The learned Advocate for the petitioners
\nhas referred us to various provisions of the
\nSocieties Registration Act, 1860 and has
\ncontended that the result of these provisions
\nwas to make the Board a corporation on
\nregistration. It is necessary now to read some
\nof the provisions of that Act. The Act is entitled
\nan Act for the registration of literary, scientific
\nand charitable societies and the preamble
\nstates that it was enacted for improving the
\nlegal condition of societies established for the
\npromotion of literature, science, or the fine
\narts, or for the diffusion of useful knowledge
\netc., or for charitable purposes. Section 1 of
\nthe Act states that any seven or more persons
\nassociated for any literary, scientific, or
\ncharitable purpose, or for any such purpose as
\nis described in Section 20 of the Act may, by
\nsubscribing their names to a memorandum of
\nassociation and filing the same with the
\nRegistrar or Joint-stock Companies form
\nthemselves into a society under the Act.
\nSection 2 lays down that the memorandum of
\nassociation shall contain and one of the
\nparticulars it must contain is “the objects of
\nthe society”. Section 3 deals with registration
\nand the fees payable therefor. Sections 5 and 6
\nare important for our purposes and should be
\nread in full.\n<\/p>\n
“5. The property, movable and
\nimmovable, belonging to a society registered
\nunder this Act, if not vested in trustees, shall
\nbe deemed to be vested, for the time being, in
\nthe governing body of such society, and in all
\nproceedings, civil and criminal, may be
\ndescribed as the property of the governing
\nbody of such society by their proper title.\n<\/p>\n
6. Every society registered under this Act
\nmay sue or be sued in the name of the
\npresident, chairman, or principal secretary, or
\ntrustees, as shall be determined by the rules
\nand regulations of the society, and, in default
\nof such determination, in the name of such
\nperson as shall be appointed by the governing
\nbody for the occasion :\n<\/p>\n
Provided that it shall be competent for any
\nperson having a claim or demand against the
\nsociety, to sue the president or chairman, or
\nprincipal secretary of the trustees thereof, if on
\nan application to the governing body some
\nother officer or person be not nominated to be
\nthe defendant.”\n<\/p>\n
Section 7 provides for non-abatement of suits
\nor proceedings and the continuance of such
\nsuits or proceedings in the name of or against
\nthe successor of the person by or against
\nwhom the suit was brought. Section 8 says
\nthat if a judgment is recovered against a
\nperson or officer named on behalf of the
\nsociety, such judgment shall not be put in
\nforce against the property, movable or
\nimmovable, or against the body of such person
\nor officer, but against the property of the
\nsociety. Section 10 provides that in certain
\ncircumstances mentioned therein a member of
\nthe society may be sued by the society; but if
\nthe defendant shall be successful in any such
\nsuit brought at the instance of the society and
\nshall be adjudged to recover his costs, he may
\nelect to proceed to recover the same from the
\nofficer in whose name the suit was brought, or
\nfrom the society. Sections 13 and 14 provide
\nfor dissolution of societies and the
\nconsequences of such dissolution. These
\nprovisions have also an important bearing on
\nthe questions before us and are quoted in full.
\n“13. Any number not less than three-
\nfifths of the members of any society may
\ndetermine that it shall be dissolved, and
\nthereupon it shall be dissolved forthwith, or at
\nthe time then agreed upon, and all necessary
\nsteps shall be taken for the disposal and
\nsettlement of the property of the society, its
\nclaims and liabilities, according to the rules of
\nthe said society applicable thereto, if any, and,
\nif not then as the governing body shall find
\nexpedient, provided that, in the event of any
\ndispute arising among the said governing body
\nor the members of the society, the adjustment
\nof its affairs shall be referred to the principal
\ncourt of Original civil jurisdiction of the district
\nin which the chief building of the society is
\nsituate, and the Court shall make such order
\nin the matter as it shall deem requisite :
\nProvided that no society shall be
\ndissolved unless three-fifths of the members
\nshall have expressed a wish for such
\ndissolution by their votes delivered in person,
\nor by proxy, at a general meeting convened for
\nthe purpose :\n<\/p>\n
Provided that whenever any Government
\nis a member of, or a contributor to, or
\notherwise interested in any society registered
\nunder this Act, such society shall not be
\ndissolved, without the consent of the
\nGovernment of the State of registration.\n<\/p>\n
14. If upon the dissolution of any society
\nregistered under this Act there shall remain,
\nafter the satisfaction of all its debts and
\nliabilities, any property whatsoever, the same
\nshall not be paid to or distributed among the
\nmembers of the said society or any of them,
\nbut shall be given to some other society, to be
\ndetermined by the votes of not less than three-
\nfifths of the members present personally or by
\nproxy at the time of the dissolution, or, in
\ndefault thereof, by such Court as aforesaid :
\nProvided, however, that this clause shall
\nnot apply to any society which shall have been
\nfounded or established by the contributions of
\nshareholders in the nature of a Joint Stock
\nCompany.”\n<\/p>\n
8.\tThe other crucial question is whether the Absorption
\nRules applied to IERT.  The relevant provisions in the rules
\nread as follows:\n<\/p>\n
“In exercise of the powers conferred by the
\nproviso to Article 309 of the Constitution, the
\nGovernor is pleased to make the following
\nrules to provide for the absorption in
\nGovernment Service of the retrenched
\nemployees of the Government or of Public
\nCorporations.\n<\/p>\n
THE UTTAR PRADESH ABSORPTION OF
\nRETRENCHED EMPLOYEES OF
\nGOVERNMENT OR PUBLIC CORPORATIONS
\nIN GOVERNMENT SERVICE RULES, 1991.\n<\/p>\n
\txx\t\txx\t\txx\t\txx<\/p>\n
2(b)\t“Public Corporation” means a body
\ncorporate established or constituted by or
\nunder any Uttar Pradesh Act expect a
\nUniversity of local authority constituted
\nfor the purpose of Local Self Government
\nand includes a government Company
\nwithin the meaning of Section 617 of the
\nCompanies Act, 1956 in which the State
\nGovernment has prepondering interest.\n<\/p>\n
2(c)\t“Retrenched Employees” means a person
\nwho was appointed on a post under the
\nGovernment or a public corporation on or
\nbefore October 1, 1986 in accordance
\nwith the procedure laid down for
\nrecruitment to the post and was
\ncontinuously working in any post under
\nthe Government or such corporation up
\nto date of his retrenchment due to
\nreduction in, or winding up of, any
\nestablishment or the Government of the
\nPublic Corporation, as the case may be
\nand in respect of whom a certificate of
\nbeing retrenched employees has been
\nissued by his appointing authority.”\n<\/p>\n
9.\tA bare reading of the provisions makes the positions
\nclear that in order to bring application of the Rules the public
\ncorporation has to be a body corporate established or
\nconstituted by or under any Uttar Pradesh Act.\n<\/p>\n
10.\tThe fundamental requirement is that the corporation
\nshould have been constituted by or under any Uttar Pradesh
\nAct. Undisputedly, the Societies Act is a Central Act.\n<\/p>\n
11.\tThe impugned judgment of the High Court does not
\nsuffer from any infirmity to warrant interference.  The appeals
\nare dismissed but without any order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Mohammad Sadiq & Ors vs State Of Uttar Pradesh & Ors on 21 September, 2007 Author: . A Pasayat Bench: Dr. Arijit Pasayat, Lokeshwar Singh Panta CASE NO.: Appeal (civil) 4590 of 2004 PETITIONER: Mohammad Sadiq & Ors RESPONDENT: State of Uttar Pradesh & Ors DATE OF JUDGMENT: 21\/09\/2007 BENCH: Dr. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-204538","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nMohammad Sadiq & Ors vs State Of Uttar Pradesh & Ors on 21 September, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/mohammad-sadiq-ors-vs-state-of-uttar-pradesh-ors-on-21-september-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mohammad Sadiq & Ors vs State Of Uttar Pradesh & Ors on 21 September, 2007 - 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