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PETITIONER: D. R. GURUSHANTAPPA

       Vs.

RESPONDENT: ABDUL KHUDDUS ANWAR & ORS.

DATE OF JUDGMENT: 27/01/1969

BENCH: BHARGAVA, VISHISHTHA BENCH: BHARGAVA, VISHISHTHA SHELAT, J.M. VAIDYIALINGAM, C.A.

CITATION:  1969 AIR  744            1969 SCR  (3) 425  1969 SCC  (1) 466  CITATOR INFO :  R          1975 SC1053  (7)  MV         1975 SC1331  (125)  RF         1976 SC2283  (40)  RF         1981 SC 658  (10)  C          1984 SC 161  (27)  D          1984 SC 385  (9,19)  R          1985 SC 211  (15,17)

ACT: Representation  of  the  People Act (43  of  1951),  s.  10- Candidate elected employed in a company owned by Government- If  disqualified-Constitution  of  India  Arts.  102(1)  and 191(1)-Scope of.

HEADNOTE: The first respondent was appointed in a undertaking  started and  managed  by the State Government, as its  own  concern. Later  a  company  was  registered  and  it  took  over  the undertaking.  All the shares in the company were held by the Government  though  some were in the name of  its  officers. The   Directors  of  the  Company  were  appointed  by   the Government a Minister was one of the first Directors of  the Company; the appointment of the Secretary of the Company was subject  to  approval of the Government; and,  even  in  the general working of the company, Government had the power  to issue  directions to the Directors which were to be  carried out  by  them.   When the concern was taken  over  from  the Government  by  the  Company,  the  services  of  the  first respondent  were not terminated and he was continued in  the same  post  by  the company which he was  holding  when  the concern  was being run by the Government, and there  was  no fresh contract entered into between him and the company.  He was  later  promoted to the post of  Superintendent  in  the Company,  and he successfully contested a seat to the  State Legislature.   The  appellant  an  unsuccessful   candidate, challenged  the  election contending : (i)  that  the  first respondent  when  initially  appointed to  the  post  was  a government  servant arid, even after that concern was  taken over  by the company, he continued to be in the  service  of the  Government  and (ii) alternatively, that  ever  if  the

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first  respondent ceased to be Government servant, he  still continued  to  hold  an office of  profit  under  the  State Government,  though technically he was in the employment  of the company. HELD  :  The first respondent was not holding an  office  of profit under the State Government. (i)  When the undertaking was taken over by the company as a going concern, the employees working in the undertaking were also  taken  over and since, in law, the company had  to  be treated  as  an  entity  distinct  and  separate  from   the Government,  the employees, as a result of the  transfer  of the undertaking, became employees of the company and  ceased to be employees of the Government.  The first respondent was a workman at the time of the transfer of the undertaking and as  a  workman,  he had, under s.  25FF  of  the  Industrial Disputes  Act, become an employee of the new employer,  viz. the company.  In view of this provision of law, there was no need  for any specific contract being entered  into  between the  Government  and the first  respondent  terminating  his Government  service;  nor  was there any need  for  a  fresh contract  being  entered into between the  company  and  the first  respondent  to make him an employee of  the  company. Further,  after  the  undertaking  was  taken  over  by  the company,  the  employees, who were workmen, were  no  longer governed  by the State’s Civil Service  Regulations.   Their conditions of service were determined by the Standing Orders of the Company which were certified under 426 the  Industrial Employment (Standing Order) Act, 1946.   The mere  inclusion  in the Civil List of the name of  a  person could  not prove that that person was in the service of  the Government,  unless  evidence  was  tendered  to  show   the circumstances under which the name was included in the Civil List  and  to exclude the possibility of  names  of  persons other than those in government service being included in the Civil  List.   No  such evidence was  given  in  this  case. Finally the post, which he was holding while the concern was being run by the Government, ceased to be a Government  post in the transfer of the undertaking to the company and became a  post  under  the company, so that  the  first  respondent ceased  to  be in Government service by continuing  in  that post. [429E, G; 430B, E-H], (ii) The  fact  that  the Government had  control  over  the Managing  Director and other Directors as well as the  power of issuing directions relating to the working of the company could  not lead to the inference that every employee of  the company was under the control of the Government.  The  power to appoint and dismiss first respondent did not vest in  the Government  or in any Government servant, The power to  con- trol  and  give  directions as to the manner  in  which  the duties  of  the  office were to be performed  by  the  first respondent  also  did not vest in the Government but  in  an officer  of  the company.  Even the power to  determine  the question of remuneration payable to the first respondent was not vested in the Government which could only lay down rules relating  to the conditions of service of the  employees  of the company.  In the case of election as, President or Vice- President, the disqualification arises even if the candidate is holding an office of profit under the local or any  other authority under the control of the Central Government or the State  Government, whereas, in the case of a  candidate  for election  as  a Member of any of the Legislatures,  no  such disqualification  is  laid down by the Constitution  if  the office  of  profit  is held under the  local  or  any  other authority  under  the  control of  the  Government  and  not

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directly   under  any  of  the  Government.   This   clearly indicates that in the case of eligibility for election as  a member of a Legislature, the holding of an office of  profit under a corporate body like a local authority does not bring about disqualification even if the local authority be under. the  control  of the Government.  The mete  control  of  the Government  over the authority having the power to  appoint, dismiss,  or control the working of the officer employed  by such authority does not disqualify the officer from being  a candidate for election as a member of the Legislature in the manner  in which such disqualification comes into  existence for  being elected as the President or  the  Vice-President. [433F; 434H; 435 A-C] By  s.  10  of the Representation of  the  People  Act,  the disqualification  is limited to a person holding the  office of  a managing agent, manager or secretary of a  company  in the  capital of which the Government has not less  than  25% share,  and  the disqualification does not  apply  to  other employees of the company.  This gives two indications as  to the scope of the disqualification laid down in Arts.  102(1) (a)  and 191 (1) (a) of the Constitution.  One is  that  the holding  of an office in a company, in the capital of  which the  Government has not less than 25% share, is not  covered by  the disqualifications laid down in Arts.  102(1)(a)  and 191(1)   (a),  as,  otherwise,  this  provision   would   be redundant.  The second is that even Parliament, when passing the  Act, did not consider it necessary to disqualify  every person  holding  an  office of  profit  under  a  Government company, but limited the disqualification to persons holding the  office of managing agent,, manager or secretary of  the company.   The  fact that the entire share  capital  in  the company  in this case is owned by the Government  does  not, make any difference. [435 D-H] 427 Gurugobinda  Basu v. Sankari Prasad Ghosal & Ors.  [1964]  4 S.C.R. 311 and Maulana Abdul Shakur v. Rikhab Chand,  [1958] S.C.R. 387, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 718 of 1968. Appeal  under s. 116-A of the Representation of  the  People Act, 1951 from the judgment and order dated November 17, 1967 of the Mysore High Court in Election Petition No. 7  of 1967. S.   V.  Gupte,  Shyamala  Pappu, S. S.  Javali  and  Vineet Kumar, for the appellant. Lily Thomas, for respondent No. 1. The Judgment of the Court was delivered by Bhargava,  J. This appeal under section II 6A of the  Repre- sentation  of the Peoples’ Act No. 43 of  1951  (hereinafter referred  to  as  "the Act") has been filed by  one  of  the unsuccessful   candidates   for  election  to   the   Mysore Legislative Assembly from No. 152, Bhadravati  Constituency, against the judgment of the High Court of Mysore  dismissing his election petition for setting aside the election of  the successful candidate, respondent No. 1. After the nomination papers had been filed, the scrutiny of the nomination papers took  place  on the 21st January, 1967 and  five  nomination papers  were  declared as valid.  They were  the  nomination papers  of the appellant, respondent No. 1  and  respondents Nos. 2 to 4. The polling for the Constituency took place  on 15th  February, 1967, and after the counting of  votes,  the results  were declared on 22nd February,  1967.   Respondent

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No.  1 received 15,862 votes, while the  appellant  received 13,380 votes.  The other three candidates, respondents 2  to 4,  were  also  unsuccessful having  received  much  smaller number  of votes.  On 5th April, 1957, the  appellant  filed the election petition challenging the election of respondent No.  1 on a number of grounds, out of which we need  mention only  one  single  ground, as the appeal in  this  Court  is confined  to  that  ground  alone.   It  was  pleaded   that respondent No. 1 Was disqualified under Article 191 (1)  (a) of  the  Constitution from being chosen as a member  of  the Legislative  Assembly, because he was holding an  office  of profit  under the Government of the State of Mysore  on  the date  of  scrutiny.  This ground, as well as  other  grounds taken  by the appellant for challenging the validity of  the election  of respondent No. 1 were all rejected by the  High Court  and  the  election petition  was  dismissed.’  Conse- quently,  the appellant has come up in this appeal  to  this Court.   Though,  in this appeal, a number of  grounds  were raised, Mr. S. V. Gupte, counsel for the appellant, confined the  case  to  this  sole  ground  of  disqualification   of respondent No. 1 on the date of scrutiny. 428 The  facts  relevant  for deciding this  issue  may  now  be stated.   On  the  date of scrutiny, respondent  No.  1  was employed as Superintendent, Safety Engineering Department in the  Factory  run  by the Mysore Iron &  Steel  Works  Ltd., Bhadravati.   His salary was more than Rs. 500  per  mensem. The past history of the service of respondent No. 1 was that he was appointed in the year 1936 in the Mysore Iron & Steel Works,  Bhadravati, which was started by the  Government  of Mysore  and was being managed by the Government as  its  own concern.  He continued to be a servant of the Government  of Mysore when, in the year 1962, a private limited Company was registered  under the name of Mysore Iron &  Steel  Limited, Bhadravati (hereinafter referred to as "the Company")  under the  Indian Companies Act, 1956, and this Company took  over the  Mysore  Iron & Steel Works from the  Government.   Res- pondent No. 1 had first joined service as a daily worker  in 1936,  but  was  promoted  as  Chargeman,  Asstt.   Foreman, Foreman and thereafter as Assistant Superintendent which was the  post held by him in the year 1962 at the time when  the concern was taken over by the Company.  Subsequently, he was promoted as Superintendent in the year 1964 and was  working on  that post at the time of the election in 1967.   It  was also  the common case of the parties that the shares of  the Company  were held cent per cent by the  Mysore  Government, though some of the shares were shown in the names of some of the Officers in the service of the Mysore Government.  Under the  Articles  of  Association of  the  Company,  the  first Directors of the Company were the Minister-in-charge of  the Industries  Portfolio in the Mysore Government,  the  Secre- taries  to the Mysore Government in the Finance  Department, and in the Commerce and Industries Department, the  Managing Director  of  the Mysore Iron & Steel Ltd.,  and  the  Chief Conservator  of  Forests  of  the  Mysore  Government.   The Governor of Mysore was entitled to appoint all or a majority of  the  members of the Board of Directors so  long  as  the Government  of Mysore held not less than 51 per cent of  the total  paid-up  capital  of the Company or so  long  as  the Governor  continued  to  be  interested  in  any   fiduciary capacity.   The Board of Directors could also co-opt one  or more  individuals as Directors.  Thus, the State  Government had considerable control in appointment of Directors of  the Company  as  well  as in the  appointment  of  the  Managing Director  who  was   to be appointed by  the  Governor  from

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amongst  the Directors nominated by him.  The  Governor  was also   entitled  to  appoint  from  amongst  the   nominated Directors  a  Chairman  and Vice-Chairman of  the  Board  of Directors.   Even  the Secretary of the Company  had  to  be appointed by the Board of Directors after obtaining approval of  the  Governor.  In respect of other  employees  of   the Company,  recruitment  and service conditions had to  be  in accordance  with  the rules which may be prescribed  by  the Governor from time to time.  When the concern was taken over from                             429 the  Government by the Company,, the services of  respondent No.  1 were not terminated and he was continued in the  same post  by the Company which he was holding when  the  concern was  being  run  by  the Government.   There  was  no  fresh contract entered into between him and the Company.  On these facts, two alternative contentions were raised by Mr.  Gupte to  urge that respondent No. 1 was disqualified  under  Art. 191  (1 ) (a) of the Constitution.  The first  argument  was that respondent No. 1, when initially appointed to a post in the  Mysore  Iron & Steel Works in 1936,  was  a  government servant  and, even after that concern was taken over by  the Company,  he  continued to be in the service of  the  Mysore Government.   In the alternative, the second contention  was that,  even  if respondent No. 1 ceased to be  a  government servant,  he  still continued to hold an  office  of  profit under  the Government of Mysore though, technically, he  was in the employment of the Company. So  far as the first point is concerned, reliance is  placed primarily  on  the circumstance that then  the  concern  was taken over by the Company from the Government, there were no specific  agreements terminating the government  service  of respondent No. 1, or bringing into existence a  relationship of master and servant between the Company and respondent No. 1.  That  circumstance,,  by  itself,  cannot  lead  to  the conclusion  that  respondent  No.  1  continued  to  be   in government service.  When the undertaking was taken over  by the Company as a going concern, the employees working in the undertaking  were  also taken over and since,  in  law,  the Company has to be treated as an entity distinct and separate from  the  Government,  the employees, as a  result  of  the transfer of the undertaking, became employees of the Company and ceased to be employees of the Government.  This position is  very clear at least in the case of those  employees  who were  covered  by  the  definition  of  workmen  under   the Industrial  Disputes Act in whose-cases, on the transfer  of the undertaking, the provisions of section 25FF of that  Act would apply.  Respondent No. 1 was a workman at the time  of the transfer of the undertaking in the year 1962, because he was holding the post of an Assistant Superintendent and  was drawing a salary below Rs. 500 per mensem.  As a workman, he would, under s. 25FF of the Industrial Disputes Act,  become an  employee of the new employer, viz., the  Company,  which took  over the undertaking from the Mysore Government  which was  the  previous employer.  In view of this  provision  of law, there was, in fact,, no need for any specific  contract being  entered  into  between  the  Mysore  Government   and respondent No. 1 terminating his government service, nor was there  any  need  for a fresh contract  being  entered  into between  the  Company and respondent No. 1 to  make  him  an employee of the Company. 8SUP.C.1/69-9 430 This position is further clarified by the circumstance that, after the undertaking was taken over by the Company, the em-

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ployees,  who were workmen, were no longer governed  by  the Mysore  Civil  Service  Regulations.   Their  conditions  of service  were  determined  by the  Standing  Orders  of  the Company which were certified under the Industrial Employment (Standing  Orders)  Act, 1946.  These Standing  Orders  even referred  to  certain  employees as  "lent  Officers".   The reference  was obviously to persons who continued to  be  in the Government service, but whose services were lent to  the Company.    It  was  conceded  in  the  present  case   that respondent No. 1 was not a lent officer as envisaged by that expression used in the Standing Orders. Respondent  No. 1 further came to be governed by  the  Works Service  Rules.   It  is true that, under  the  Articles  of Association,  the  Governor  had  the  power  to  lay   down conditions  of service of the employees of the Company;  but that cannot mean that the employees of the Company continued to  be in the service of the Government.  Reliance  in  this connection was also placed on behalf of the appellant on the fact  that  the name of respondent No. 1’  appeared  in  the Mysore Civil List under the heading "Iron and Steel.   Ltd., Bhadravati"  from which an inference was sought to be  drawn that  respondent  No. 1 must have  continued  in  government service,  as,  otherwise,  his  name  would  not  have  been included in the Civil List.  The mere inclusion in the Civil List  of the name of a person cannot be held to  prove  that that  person  is in the service of  the  Government,  unless evidence  is tendered to show the circumstances under  which the  name was included in the Civil List and to exclude  the possibility  of  names  of  persons  other  than  those   in government  service  being included in the Civil  List.   No such  evidence was given in this case.  On the  other  hand, the  same  Civil List shows that even the names  of  certain employees of the Universities in the State are also included in  it,, and, on the face of it, University employees  could not  be  held to be in government service.  The  Civil  List relied  upon clearly is not confined to names of persons  in Mysore  Government  service  only, so  that  this  piece  of evidence relied on by the appellant also does not  establish that respondent No. 1 continued to be in government  service after the undertaking was taken over by the Company. Finally,  there  is the circumstance that it  is  not  shown that,  after the undertaking was taken over by the  Company, respondent No. 1 continued to hold a lien on any  Government post.   In  fact, the post, which he was holding  while  the concern was being run by the Mysore Government, ceased to be a Government post on the transfer of the undertaking to  the Company  and  became  a  post under  the  Company,  so  that respondent  No.,  1 ceased to be in  government  service  by continuing  in  that post.  The first contention  raised  on behalf of the appellant, therefore, fails.                             431 On the second contention that, even if respondent No. 1  was not holding a government post, he must be held to be holding an  office of profit under the Government, Mr. Gupte  relied on  the  principles laid down by this Court  in  Gurugobinda Basu  v. Sankari Prasad Ghosal and others(1).  The Court  in that  case brought out the distinction between an office  of profit under the Government and a post in the service of the Government by stating               "We agree with the High Court that for holding               an office of profit under the Government,  one               need  not be in the service of Government  and               there  need be no. relationship of master  and               servant between them.  The Constitution itself               makes a distinction between ’the holder of  an

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             office  of  profit under the  Government’  and               ’the  holder  of a post or service  under  the               Government’  see  Arts.  309  and  314.    The               Constitution  has  also  made  a   distinction               between  ’the  holder of an office  of  profit               under  the Government’ and ’the holder  of  an               office  of  profit  under  a  local  or  other               authority   subject   to   the   control    of               Government’; see Art. 58(2) and 66-(4)." The Court then proceeded to consider the earlier decision in the case of Maulana Abdul Shakur v. Rikhab Chand and Anr.(1) and held :-               "it  is clear from the aforesaid  observations               that  in  Maulana Abdul Shakur’s  case(2)  the               factors which were held to be decisive were  :               (a)  the power of the Government to appoint  a               person  to an office of profit or to  continue               him  in that office or revoke his  appointment               at their discretion, and (b) payment from  out               of Government revenues, though it was  pointed               out  that  payment from a  source  other  than               Government revenues was not always a  decisive               factor." After this reference to Maulana Abdul Shakur’s case (2)  the Court proceeded, to apply the principles to the facts of the case before it.  In that case, the question was whether  the appellant  was  holding  an  office  of  profit  under   the Government   of  India.   It  was  pointed  out   that   the appointment  of  the appellant as also  his  continuance  in office rested solely with the Government of India in respect of  the  two  Companies  for which he  was  employed  as  an Auditor.  His remuneration was also fixed by the Government. The  Court assumed for the purposes of the appeal  that  the two   Companies   were  statutory   bodies   distinct   from Government, but noted the fact that, at the same time,  they were  Government Companies within the meaning of the  Indian Companies Act.  Emphasis was laid on the circumstance  that, in  the  performance  of his functions,  the  appellant  was controlled by the Comptroller (1) [ 1 964] 4 S.C.R. 31 1. (2) [1958] S.C.R, 387, 432 and Auditor-General who himself was undoubtedly holder of an office  of  profit under the Government, though  there  were safeguards  in  the  Constitution as to the  tenure  of  his office  and removability therefrom.  Under Art. 148  of  the Constitution,   the   Comptroller  &   Auditor-General   was appointed  by  the President and he could  be  removed  from office in like manner and on the like grounds as a Judge  of the  Supreme  Court.   ’Me salary and  other  conditions  of service of the Comptroller & Auditor-General were to be such as might be determined by Parliament by law and, until  they were  so  determined, they were to be as ’specified  in  the Second  Schedule  to  the  Constitution.   Other  provisions relating  to  the Controller and Auditor-General  were  also taken  notice  of  and an inference  was  drawn  from  these provisions  that  the  Comptroller  and  Auditor-General  is himself a holder of an office of profit under the Government of  I ndia,  being  appointed  by  the  President,  and  his administrative  powers are such as may be prescribed by  the rules,  made by the President, subject to the provisions  of the  Constitution  and of any law made by  Parliament.   The Court then held:-               "Therefore, if we look at the matter from  the               point  of  view of substance  rather  than  of

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             form, it appears to us that the appellant,  as               the  holder of an office of profit in the  two               Government  companies, the  Durgapur  Projects               Ltd., and the Hindustan Steel Ltd., is  really               under the Government of India; he is appointed               by  the Government of India; he  is  removable               from  office by the Government of,  India;  he               performs   functions   for   two    Government               companies under the control of the Comptroller               and  Auditor-General who himself is  appointed               by  the  President  and  whose  administrative               powers may be controlled by rules made by  the               President."               Thereafter, the Court proceeded to hold:-               "In view of these decisions, we cannot  accede               to  the submission of Mr. Chaudhury  that  the               several   factors   which   enter   into   the               determination of this question-the  appointing               authority, the authority vested with power  to               terminate the appointment, the authority which               determines  the remuneration, the source  from               which  the  remuneration  is  paid,  and   the               authority  vested  with power to  control  the               manner  in which the duties of the office  are               discharged  and  to give  directions  in  that               behalf  must all co-exist and each  must  show               subordination  to Government and that it  must               necessarily follow that if one of the elements               is  absent,  the test of a person  holding  an               office under the Government, Central or State,               is not satisfied.  ’Me cases we have  referred               to    specifically   point   out   that    the               circumstance that the source                                    433               from  which  the remuneration is paid  is  not               from  public revenue is a neutral  factor  not               decisive  of  the question.  As we  have  said               earlier,  whether stress will be laid  on  one               factor  or the other will depend on the  facts               of each case.  However, we have no  hesitation               in saying that where the several elements, the               power  to appoint, the power to  dismiss,  the               power to control and give directions as to the               manner  in which the duties of the office  are               to  be performed, and the power  to  determine               the  question of remuneration are all  present               in a given case, then the officer in  question               holds  the  office  under  the  authority   so               empowered." Mr., Gupte, from these views expressed by the Court,, sought to  draw  the inference that the primary  consideration  for determining whether a person holds an office of profit under a  Government is the amount of control which the  Government exercises over that officer.  In the present case, he relied on  the circumstance that all the shares of the Company  are not only owned by the Mysore Government, but the  Directors of  the Company are appointed by the Government  a  Minister was  one  of  the  first  Directors  of  the  Company;   the appointment  of the Secretary to the Company is  subject  to approval of the Government; and, even in the general working of the Company, Government has the power to issue directions to the Directors which must be carried out by them.  It  was urged  that respondent No. 1 was directly under the  control of  the  Managing Director who is himself appointed  by  the Government  and  may  even be a  ’lent  officer’  holding  a

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permanent.  post  under the Government.  Respondent  No.  1, thus,  must. be held to be working under the control of  the Government exercised through the Managing Director. We  are unable to accept the proposition that the mere  fact that  the Government had control over the Managing  Director and  other  Directors  as  well  as  the  power  of  issuing directions  relating to the working of the Company can  lead to  the  inference that every employee of  the-  Company  is under   the  control  of  the  Government.   The  power   of appointment and dismissal of respondent No. 1 vested in  the Managing Director of the Company and not in the  Government. Even the directions for the day-to-day work to be  performed by  respondent  No. 1 could only be issued by  the  Managing Director  of  the Company and not by  the  Government.   The indirect control of the Government which might arise because of  the  power  of the Government to  appoint  the  Managing Director  and  to  issue directions to the  Company  in  its general  working  does not bring respondent No.  1  directly under the control of the Government.  In Gurugobinda  Basu’s case(1),  the position was quite different.  In  that  case, the appellant was appointed by (1)  [1964]4S.C.311, 434 the Government and was liable to be dismissed by the Govern- ment.    His  day-to-day  working  was  controlled  by   the Comptroller  and  Auditor-General who was a servant  of  the Government  and was not in any way an office-bearer  of  the two  Companies  concerned.   In  fact,  the  Court  had   no hesitation  in holding that the appellant in that  case  was holding  an office of profit ’under the Government,  because the Court found that the several elements which existed were the  power  to appoint, the power to dismiss, the  power  to control  and give directions as to the manner in  which  the duties of the office are to be performed, arid the power to determine  the question of remuneration.  AR these  elements being  present,  the Court did not find  any  difficulty  in finding  that the appellant was holding an office of  profit under  the Government.  In the case before us, the  position is  quite  different.   The power  to  appoint  and  dismiss respondent  No. 1 does not vest in the Government or in  any government   servant.   The  power  to  control   and   give directions  as  to  the manner in which the  duties  of  the office are to be performed by respondent No. 1 also does not vest  in the Government, but in an officer of  the  Company. Even  the  power to determine the question  of  remuneration payable to respondent No. 1 is not vested in the  Government which can only lay down rules relating to the conditions  of service  of the employees of the Company.  We are unable  to agree  that,  in these circumstances, the  indirect  control exercisable  by  the  Government because  of  its  power  to appoint, the Directors and to give general directions to the Company  can  be held to make the  post  of  Superintendent, Safety Engineering Department, an office of profit under the Government. In  this  connection, a comparison between Arts.  58(2)  and 66(4), and Arts. 102(1) and 191(1)(a) of the Constitution is of significant help.  In Arts. 58(2) and 66(4) dealing  with eligibility  for election as President or Vice-President  of India, the Constitution lays down that a person shall not be eligible for election if he holds any office of profit under the  Government of India or the Government of any  State  or under any local or other authority subject to the control of any  of the said Governments.  In Articles 102 (1  )(a)  and 191  (1)  (a)  dealing with membership of  either  House  of Parliament or State Legislature, the disqualification arises

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only  if  the person holds any office of  profit  under  the Government  of  India or the Government of any  State  other than  an office declared by Parliament or State  Legislature by  law not to disqualify its holder.  Thus, in the case  of election    as    President    or    Vice-President,     the disqualification arises even if the candidate is holding  an office of profit under a local or any other authority  under the   control  of  the  Central  Government  or  the   State Government, whereas, in the case of a candidate for election as   a   Member  of  any  of  the  Legislatures,   no   such disqualification 435 is laid down by the Constitution if the office of profit  is held under a local or any other authority under the  control of  the,  Governments  and not directly  under  any  of  the Governments.   This  clearly indicates that in the  case  of eligibility  for election as a member of a Legislature,  the holding of an office of profit under a corporate body like a local  authority does not bring about disqualification  even if that local authority be under the control of the  Govern- ment.  The mere control of the Government over the authority having the power to appoint, dismiss, or control the working of   the  officer  employed  by  such  authority  does   not disqualify that officer from being a candidate for  election as  a member of the Legislature in the manner in which  such disqualification  comes into existence for being elected  as the  President or the Vice-President.  The Company,  in  the present  case,  no doubt did come under the control  of  the Government  and  respondent No. 1 was holding an  office  of profit  under the Company; but, in view of  the  distinction indicated above, it is clear that the disqualification  laid down  under  Art. 191 (1) (a) of the  Constitution  was  not intended to apply to the holder of such an office of profit. It  also appears to us that it was in view of  this  limited application  of the disqualification laid down in Arts.  102 (1 ) (a) and 191 (1) (a) of the Constitution that Parliament made  an  additional provision in section 10 of the  Act  by laying down that "a person shall be disqualified if, and for so long as, he is a managing agent, manager or secretary  of any  company  or  corporation  (other  than  a  co-operative society) in the capital of which the, appropriate Government has  not less than twenty-five per cent share." It is to  be noted  that the  Parliament,  in  enacting  this  section, limited the disqualification to a person holding the  office of a managing agent, manager or secretary of a company,  and not  to  other employees of the  Company.   This  provision, thus,  gives  two  indications  as  to  the  scope  of   the disqualification laid down in Arts. 102 (1)(a) and 191(1)(a) of  the Constitution.  One is that the holding of an  office in a company, in the capital of which the Government has not less  than  25  per  cent  share,  is  not  covered  by  the disqualifications  laid down in Arts. 102(1)(a) and 191  (1) (a), as, otherwise, this provision would be redundant.   The second  is that even Parliament, when passing the  Act,  did not consider it necessary to disqualify every person holding an office of profit under a Government Company. but  limited the  disqualification  to  persons  holding  the  office  of managing  agent, manager or secretary of the  Company.   The fact  that  the entire share capital in the Company  in  the case  before us is owned by the Government does not, in  our opinion,  make  any  difference.   Under  the  Articles   of Association, it is clear that, though, initially, all shares were  held  by the Government, it is possible  that  private citizens  may  also hold shares in the  Company.   In  fact, there, are provisions indicating that shares held by certain

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shareholders can pass 436 by  succession  to members of their family or  can  even  be transferred  by gift to them.  The Articles  of  Association lay down that the Company shall be a private limited company within  the meaning of the Indian Companies Act, 1956,  and, though  the shares in the capital of the Company  are  under the control of the Board of Directors, they have been  given the liberty to allot, grant option over or otherwise dispose of the shares at such time and to such persons, and in  such manner and upon such terms as they may think proper.   Under this  power,  the  Directors can  allot  shares  to  private individuals.   It  is  under  art. 34  of  the  Articles  of Association that a shareholder is given the power, by way of gift  or  for  or without any  pecuniary  consideration,  to transfer any share in the capital of the Company to the wife or  husband of such member, or to a son,  daughter,  father, mother, grandson, grand-daughter, brother, sister, nephew or niece  of such member or the wife or husband of  any  person standing  in such relationship to the  transferring  member. Devolution of shares on sequent to the death of a member, on his heirs is also recognised by the Articles of Association. In  these circumstances, the principles which will apply  to the Company will be on a par with those applicable to  other Government  Companies or Companies in which  the  Government holds  more  than  25 per cent of the  share  capital.   The Company  cannot,  therefore,  be  treated  as  either  being equivalent  to  the  Government or to be  an  agent  of  the Government,  so that the control exercised by its  Directors or  the  Managing Director over respondent No. 1  cannot  be held to be control exercised by the Government. Mr.  Gupte,  in this connection, also urged that  we  should Pierce the veil of the Company being a separate juristic and legal entity,, apart from the Government which owns all  the shares  in the Company, and hold that, in fact, the  Company should  be equated with the Government of Mysore itself  .In our  opinion, in the present case, no question  of  piercing the  veil can arise in view of the provisions of section  10 of  the Act which specifically deals  with  disqualification for membership of persons holding offices under a Company in which  a Government holds shares.  That section  limits  the scone  of  disqualification to holders of  three  particular offices only and in companies in which the share holding  of the  Government is not less ’than 25 per cent.  This  provi- sion  clearly  indicates that, for purposes  of  determining disqualification for candidature to a Legislature, it  would not be appropriate to attempt to lift the veil and equate  a Company with the Government merely because the share-capital of  the  Company  is contributed  by  the  Government.   The discussion  of the relevant Constitutional provisions  above also  supports this view.  In the present  case,  therefore, respondent  No. 1 cannot be held to be holding an office  of profit under the Government of Mysore and was Pot dis- 437 qualified  from being chosen as a member of the Assembly  of the State. The appeal fails and is dismissed with costs. Y.P.                                    Appeal dismissed. 438