HEAVY ENGINEERING MAZDOOR UNION versus THE STATE OF BIHAR & ORS.

Citation: [1969] 3 S.C.R. 995 · Decided: 12-03-1969 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Dismissed

Cited by 15 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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995 
HEAVY ENGINEERING MAZOOOR UNION 
v. 
THE STATE OF BffiAR & ORS. 
March 12, 1969 
[J. M. SHELAT AND V. BHARGAVA, JJ.] 
Industrial Disputes Act, 1947, ss. 2(a) and !(}-Industry carritd'on 
by company incorporated under the Companies Act, 1956--E:ntire share 
capital subscribed by Central Government-Whether industry ca"ied on 
"under the authorirry of" the Central Government and if that the "apprn. 
priatt government". 
Industrial Employment (Standing Orders) Act, 1946-Question.r pend-
ing before certifying authority-If bar to a reference of adjudication under 
s. 10 of the Industrial Disputes Act, 1947. 
The Heavy En.gioeering Corporation Limited was incorporated under 
the Companies Act and its entire share capital contributed by the C.Cntral 
Government. It was therefore a Government Company under s. 617 of 
the Companies Act. 
Its Menwrandum and 
Articles conferred large 
powers on the Central Governrnent including the power to give directions 
as regards the operation of the Company, the wages and salaries of its 
employees, and the appointment of directors of the company, 
Certain 
disputes arose between the Company and its workmen whereupon the 
State Government of Bihar referred these disputes by a notification in 
November 1956 to the Industrial Tribunal for adjudication. 
The work-
men through their union filed a writ petition under Arts: 226 and 227 
of the Constitution disputing the validity of the reference on two grounds : 
(i) that the appropriate Government to make the said reference under 
s. 10 of the Industrial Disputes Act; 1947 was the Central Government 
and not the State Government; and (ii) that the questions refer'red for 
adjudication were at the time actually pending before 
the 
certifying 
authority under the Industrial Employment (Standing Orders) Ac\!, 1946. 
on an application for modificatioa of the Company's Standing Orders and 
therefore the said questions would not be indust'rial disputes which could 
be validly refei:red for adjudication. 
The High Court negatived both the 
contentions and upheld the validity of the reference. 
In appeal to this Court under Art. 133(i) (c) it was contended inter alia 
on behalf of the appellant that the industry in question was "carried on 
under the authority of the Central Government" within the meaning of 
s. Z(a) of the Act and the reference under s. 10 was therefore required to 
be made by that Government. 
HELD, Dismissing the appeal: (i) The words "under the· authority 
of' mean pursuant to the authority, such as where an agent o'r a servant 
acts under or pursuant to the authority of his principal or master. That 
obviously cannot be said of a company incorporated under the Companies 
Act whose Constitution, powers and functions are provided for and re~ 
gulated by its memorandum of association and the articles of association. 
An incorporated company has a separate existence and the law recognises 
it as a juristic person separate and distinct from its members. The mere 
fact that the entire share capital of the respondent-company was contri-
buted by the C.Cntra\ Government and the fact that all its shares were 
L 11 Sup CI;69-14 
996 
SUPREME COURT REPORTS 
[1969] 3 S.C.R. 
held by the President and certain officers of the Central Government did 
A 
not make any difference. [998 H-999 Gl 
Salomon v. Salomon & Co., [1897) 
A.C. 22; Janson v. Driefontain 
CoMO/idated Mines; [1902) A.C. 484; Kuenigi v. Donnersmarck, [1955) 
I Q.B. 515; Graham v. Public Works Commissioners, 
[19011 
(2) K.B. 
781; 
The State Trading Corporation of India Ltd. v. The Commercial 
Tax Officer, Visakhapatnam 
[1964) 
4 S.C.R. 99 at 
188, per Shah J; 
Tamlin v. Hannaford [1950) I K.B. 18 at 25, 26; London County Te"i-
B 
torial and Auxiliary Forces Association v. Nichols, 
[19481 2 All. E.R. 
432;· referred to. 
Although extensive powers were conferred on Central Government to 
give directions in regard to various matters; the·se powers were derived 
from the company's memorandum and articles and not by reason of the 
company bein2 the agent of the Central Government. [1000 BJ 
The definition of "employer" in s. 2(g) of the Act suggests that an 
industry carried on by and under the authority of the Government means 
either the industry carried on directly by a department of the Government, 
such as the Posts and Telegraphs or the Railways, or one carried on by 
such department throu2h the instrumentality of an agent. [1001 Bl 
Carlsbad M

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