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CASE NO.: Appeal (civil) 496-497 1999

PETITIONER: DISTT.  MANAGER, APSRTC, VIJAYAWADA

       Vs.

RESPONDENT: K.  SIVAJI & ORS.

DATE OF JUDGMENT:       30/11/2000

BENCH: S.R.Babu, S.B.Variiava

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T..J       J U D G M E N T S.  N.  VARIAVA, J.

     These Appeals are against a Judgment dated 5th August, 1986  passed  by the High Court of Andhra Pradesh.   Briefly stated  the  facts are as follows:  The Appellant is a  Road Transport  Corporation  established under Section 3  of  the Road  Transport Corporation Act, 1950.  The Respondents  are employees of the Appellant Corporation.  The Respondents had filed  an application under Section 15(2) of the Payment  of Wages  Act  claiming wages for holidays declared  under  the Andhra   Pradesh  Factories   and  Establishments  (National Festival and other Holidays) Act, 1974 (hereinafter referred to  as  the  said  Act).  This claim was  contested  by  the Appellant.   The  Appellant pointed out that under the  said Act  only 7 days holiday were to be given, whereas they  had already  granted  15  days   holiday.   The  Appellant  also contended that by virtue of Section 11(1)(c) of the said Act the  provisions of the said Act were not applicable to them. The  Appropriate Authority did not accept the contentions of the Appellant and directed them to make payment for the work done  by the Respondents on holidays declared under the said Act.   The  Appeals  filed  by   the  Appellant  were   also dismissed.   The Appellants, therefore, filed Writ Petitions in  the  High  Court  of Andhra Pradesh, which  came  to  be disposed  of  by Judgment dated 5th August, 1986.  The  High Court  has held that the Appellant is not under the  control of  the Central or the State Government and that, therefore, the  provisions  of the said Act are applicable.   The  High Court  has  held  that  even though an  institution  may  be treated  as a State within the meaning of Article 12 of  the Constitution  of India, it did not necessarily mean that  it was under the control of the State Government or the Central Government,  as the case may be.  The High Court has  relied upon  Section  68-A  of  the Motor Vehicles  Act,  1988  and concluded,  from  this  provision, that the  Road  Transport Corporation   established  under  Section  3  of  the   Road Transport  Corporation  Act is distinct from the Central  or State  Government.   It  is  this Judgment  which  has  been assailed  before  us.  At this stage, it must  be  mentioned that  before the High Court the Appellant had relied upon  a Judgment  delivered by a concurrent Bench of the same Court, wherein  it  has been held that once an establishment  is  a

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State  within the meaning of Article 12 of the  Constitution of India it would clearly show that it was under the control of  the  Central  or the State Government.  The  High  Court noticed  this Judgment as commented as follows:  "There  can be  no  manner  of  doubt about the same  and  there  is  no incongruity in applying the same tests to section 11(1)(c).

     It  is  seen from the judgment that the learned  Judge examined  the Memorandum and the Articles of Association  of this company (H.M.T.) and held:

     "These  articles are signed by the President of  India and  other  officers of the Government who are described  as Subscribers.   These articles establish that the undertaking is under the deep and pervasive control of the Government."

     Hence,  it is not correct to state that he rested  his conclusion solely on the ground that the company was treated as a State for the purpose of Article 12 of the Constitution of  India,  Hence  I  am not persuaded to  accept  that  any institution  which is treated as a State within the  meaning of Article 12, must be deemed to be under the control of the State  Government or the Central Government, as the case may be."

     On  this basis, the High Court refused to follow  that Judgment.   We  have also read that Judgment.  It  is  clear from  the  reading  of  that   Judgment  that  it  has  been categorically   held  that  both  in   Article  12  of   the Constitution  of India and Section 11(1)(c) of the said Act, the  words  "under the control of the Government" are  used. It has been held that the same meaning has to be ascribed to both.  It has been held that if an establishment was a State within the meaning of Article 12, then it would be under the control  of  the  Government  for the  purposes  of  Section 11(1)(c)  of  the said Act.  Having so held, the Court  then considered  the  Memorandum and Articles of  Association  by stating  as under:  "However, since this matter is argued at length  that  I  shall also consider the nature  of  control exercised by the central Government on the undertaking."

     It  is  thus  clear  that  the  decision  that  if  an establishment  is a State within the meaning of Article  12, then  it  is  under the control of the  Government  for  the purposes  of  Section  11(1)(c),  is   not  based  upon   an examination  of the Memorandum and Articles of  Association. This  decision was binding on the learned Judge hearing  the Writ  Petition.  Judicial discipline required that he either follow  it  or refer the matter to a larger Bench.   Sitting singly  the  learned Judge could not have taken a  different view  on the specious ground that the decision was based  on facts.   It  must  be  mentioned that,  as  is  pointed  out hereinafter,  even  on facts the conclusion of  the  Learned Judge  is unsustainable.  At this stage it must be mentioned that  Mr.   Nageshwar  Rao has very fairly stated  that  the Appellant  Corporation  do not want to and will not  recover the  amounts  paid to the employees by virtue of the  orders passed.   He  submits  that the Appellants merely  want  the correct  position  in  law   established.   We  accept  this statement   and  proceed  to   decide  these  Appeals.   The Appellant  had been established under Section 3 of the  Road Transport  Corporation  Act.  Section 3 empowers  the  State Government to establish a Road Transport Corporation so that (a)  advantages  can  be offered to the  public,  trade  and

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industry  by development of road transport, (b) there  could be  co- ordination of different forms of road transport  and (c)  facilities  for  road transport could be  extended  and improved  by  an  efficient and economical  system  of  road transport  service.   This,  therefore, were  the  sovereign functions  which would otherwise have been performed by  the State Government itself.  However, the Act permits the State Government  to delegate these functions to a Road  Transport Corporation  established by it.  Section 5 provides that the superintendence, direction and management of the affairs and business  of  a  Corporation  would   vest  in  a  Board  of Directors.   Section 5 further provides that the Board shall consist  of a Chairman and such other Directors as the State Government  may think fit to appoint.  It also empowers  the State  Government  to  appoint one of the Directors  as  the Vice-Chairman  of  the board.  Section 8 empowers the  State Government  to remove or terminate from office the  Chairman or  other Directors of the Corporation.  Under Section 34 of the  Act,  the State Government may give to the  Corporation general  instructions  which  should  be  followed  by   the Corporation,  and  such  instructions   and  directions  may pertain  to recruitment, conditions of service and  training of  its  employees,  wages  to be  paid  to  the  employees, reserves  to  be  maintained and disposals  of  profits  and stocks.   Section 34 also provides that a Corporation  could not depart from the general instructions issued by the State Government.  Under Section 35 the Corporation has to furnish returns,  statistics, accounts and other information to  the State Government.  Under Section 36 the State Government has the  power to make such inquiries as it choose and if on the inquiries  it was felt necessary, then by virtue of  Section 37,  the  State Government may authorise any person to  take over  the  Corporation and administer it.  Section  38  also gives  to  the  State Government a power  to  supersede  the Corporation.   All  these provisions clearly show  that  the State  Government  has absolute control over  the  Appellant Corporation.  The words used in Section 11(1)(c) of the said Act  are "any factory or establishment under the control  of the  Central  or any State Government" In Article 12 of  the Constitution  of India the words used are "under the control of  Government of India".  Thus, under both of them what  is essential is control of the Government.  We, therefore, fail to  see as to how an establishment, which is deemed to be  a State  within the meaning of Article 12 of the  Constitution of  India, would not be under the control of the  Government for  purposes of Section 11(1)(c) of the said Act.  Reliance on  Section  68-A by the High Court is  entirely  misplaced. Section 68-A(b) of the Motor Vehicles Act merely states that a   State  transport  undertaking   means  any   undertaking providing road transport service and such undertaking may be carried  on  (i) by the Central Government or (ii) any  Road Transport  Corporation  established under Section 3  of  the Road Transport Corporation Act, or (iii) by any Municipality or Corporation or Company owned or controlled by the Central Government  or the State Government.  As seen, under Section 3  of  the Road Transport Corporation Act, it is  the  State Government  who  may either perform the function  itself  or establish a Corporation, which would be performing functions which  are  basically public functions.  Merely because  the State   Government   establishes  a  Corporation  and   that Corporation  is  an  establishment distinct from  the  State Government does not ipso facto mean that that Corporation is not  under  the control of the State Government.  This  very vital  aspect  appears  to have been lost sight  of  by  the learned  Judge.  In our view, it is clear that the Appellant

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Corporation  is  under the control of the State  Government.@@                  JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Therefore,  the  provisions  of the said Act  would  not  be@@ JJJJJJJJJJJJJJJ applicable  to it by virtue of Section 11(1)(c) of the  said Act.   In this view of the matter, the Judgement of the High Court  cannot  be  sustained  and   is  hereby  set   aside. Accordingly the Appeals are allowed.  There will be no order as to costs.