Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1886 OF 2007

Dalco Engineering Private Ltd. … Appellant

Vs.

Shree Satish Prabhakar Padhye & Ors. … Respondents   

WITH

CIVIL APPEAL NO. 1858 OF 2007

Fancy Rehabilitation Trust & Anr. … Appellants

Vs.

Union of India & Ors. … Respondents   

J U D G M E N T

R. V. RAVEENDRAN, J.

Facts in CA No.1886/2007 :

The appellant  is  a  private  limited  company incorporated  under  the  

provisions of the Companies  Act,  1956. The respondent – S.P. Padhye –  

(also referred to as ‘the employee’) was employed as a Telephone Operator  

by the appellant for more than two decades. The respondent’s service was

terminated by the appellant with effect from 31.12.2000 on the ground that  

he  had  become  deaf  (85% reduction  in  ability  to  hear).  The  respondent  

complained  to  the  Disability  Commissioner,  Pune,  in  regard  to  such  

termination, alleging that he was fit, able and normal when he joined service  

of the appellant and as he acquired the hearing impairment during the period  

of service, he should have been continued in employment in some suitable  

post.  The  Disability  Commissioner  made  an  order  dated  12.10.2001  

suggesting  to  the  employer  to  undertake  a  social  responsibility,  by  re-

employing the respondent to discharge any other work. The suggestion was  

not accepted by the employer.  

2. According to the respondent, the Commissioner, instead of making a  

mere  suggestion,  ought  to  have  issued  a  direction  to  the  employer,  in  

exercise  of  jurisdiction  under  section  47 of  the  Persons  with  Disabilities  

(Equal Opportunities, Protection of Rights and Full Participation) Act, 1995  

(‘the Act’, for short). He therefore filed a writ petition seeking the following  

reliefs  (i)  quashing of the order  dated 12.10.2001; and (ii)  a  direction to  

implement the provisions of the Disabilities Act by directing the employer to  

reinstate  him in  service in a suitable  post,  with retrospective  effect  from  

1.1.2001,  in  the  same  pay-scale  and  service  benefits.  The  High  Court  

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allowed the said writ petition by judgment dated 23.12.2005, and directed  

the employer to reinstate the respondent and shift him to a suitable post with  

the same pay-scale and service benefits and with full back-wages. The High  

Court  held  that  the  appellant,  though a  private  limited company,  was  an  

“establishment” as defined under section 2(k) of the Act and consequently  

section 47 of the Act enjoined it  not to dispense with the services of its  

employee who acquired a disability.

Facts in CA No.1858/2007 :

3. The first Appellant is a Public Trust (for short the ‘Trust’) working for  

the  benefit  of  the physically  and mentally  challenged persons,  took up a  

house-keeping contract from the third respondent Company on 24.7.2000.  

The  appellant  employed  several  physically  handicapped  persons  for  

executing the said contract. The third respondent terminated the appellant’s  

contract  on 18.7.2006.  Feeling aggrieved,  the appellant  filed a  complaint  

dated 22.7.2006 with the Disability Commissioner, Pune followed by a writ  

petition in the High Court for quashing the notice terminating the contract.  

The appellant also sought a direction for rehabilitation of the persons with  

disabilities who were employed by it for executing the said house-keeping  

contract, under the provisions of the Act. A Division Bench of the Bombay  

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High Court by judgment dated 19.9.2006 dismissed the writ petition holding  

that the third respondent was not an “establishment” within the meaning of  

section 2(k) of the Act and, consequently, the provisions of the Act did not  

apply and that the Disability Commissioner had no jurisdiction to issue any  

direction to the third respondent. It also held that the earlier decision in S.P.   

Padhye (which is the subject matter of the first case) was per incuriam as it  

ignored two binding decisions of this court - the Constitution Bench decision  

in  Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi [1975 (1) SCC  

421] and the decision in S.S. Dhanoa v. Municipal Corporation, Delhi [1981  

(3) SCC 431]. Feeling aggrieved, the appellants have filed this appeal.

Questions for decision

4) The  employee  relies  on  section  47  which  provides  that  no  

establishment shall  dispense  with,  or  reduce  in  rank,  an  employee  who  

acquires a disability during his service. Section 47 of the Act is extracted  

below :-

“47.  Non-discrimination  in  Government  employment.—(1)  No  establishment  shall  dispense with,  or reduce in rank, an employee  who  acquires a disability during his service:

Provided that, if an employee, after acquiring disability is not suitable for  the post he was holding, could be shifted to some other post with the same  pay scale and service benefits:

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Provided further that if it is not possible to adjust the employee against  any post, he may be kept on a supernumerary post until a suitable post is  available or he attains the age of superannuation, whichever is earlier.

(2) No promotion shall be denied to a person merely on the ground of  his disability:

Provided that the appropriate Government may, having regard to the type  of work carried on in any establishment,  by notification and subject  to  such conditions, if any, as may be specified in such notification, exempt  any establishment from the provisions of this section.”   

The term “establishment” employed in section 47 is defined in section 2(k)  

of the Act as follows :

“2. Definitions.—In this Act, unless the context otherwise      requires, --  

x x x x x

(k) “establishment” means a corporation established by or under a Central,  Provincial or State Act, or an authority or a body owned or controlled  or  aided  by the  Government  or  a  local  authority  or  a  Government  company as defined in section 617 of the Companies Act 1956 (1 of  1956) and includes Departments of a Government;”

5. The  question  is,  having  regard  to  the  definition  of  the  word  

‘establishment’ of section 2(k) of the Act, whether the requirement relating  

to non-discrimination of employees acquiring a disability during the course  

of  service,  embodied  in  Section  47,  is  to  be  complied  with  only  by  

authorities falling within the definition of State (as defined in Article 12 of  

the  Constitution),  or  even  by  private  employers.  This  leads  us  to  the  

following two questions:-

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(i) Whether  a  company  incorporated  under  the  Companies  Act  (other  

than  a  Government  company  as  defined  in  section  617  of  the  

Companies Act, 1956) is an “establishment” as defined in section 2(k)  

of the Act ?        

(ii) Whether  the  respondent  in  the  first  case  and  the  appellant  in  the  

second case are entitled to claim any relief with reference to section  

47 of the Act ?

Re:  Question (i)

6. Let us examine the meaning of the crucial word ‘establishment’ used  

in  sub-section  (1)  of  section  47  of  the  Act.  The  definition  of  the  word  

‘establishment’  in  section  2(k),  when  analyzed,  shows  that  it  is  an  

exhaustive definition, and covers the following categories of employers:  

(i) a corporation established by or under a Central, Provincial, or State  Act;  

(ii) an  authority  or  a  body  owned  or  controlled  or  aided  by  the  Government;  

(iii) a local authority;  

(iv) a Government company as defined in Section 617 of the Companies  Act, 1956; and  

(v) Departments of a Government.  

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It  is  not  in dispute  that  the employers in these  two cases  are companies  

incorporated  under  the  Companies  Act,  1956  which  do  not  fall  under  

categories (ii) to (v) specified in Section 2(k) of the Act.   

7. The  employee  contends  that  a  company  incorporated  under  the  

Companies Act is a Corporation falling under the first category enumerated  

in  section  2(k),  that  is  ‘Corporation  established  by  or  under  a  Central,  

Provincial  or  State  Act’,  on  the  following reasoning :  that  a  corporation  

refers to a company; that Companies Act is a Central Act; and that therefore  

a  company  incorporated  and  registered  under  the  Companies  Act  is  a  

Corporation established under a Central Act. He contends that the use of the  

words “by or under” is crucial. According to him, ‘a corporation established  

by an Act’ would refer to a corporation brought into existence by an Act;  

and  a  ‘corporation  established  under  an  Act’  would  refer  to  a  company  

incorporated under the Companies Act.  On the other  hand,  the employer  

contends  that  the  term  ‘Corporation  established  by  or  under  a  Central,  

Provincial or State Act’ refers to a statutory Corporation which is brought  

into  existence  by  a  statute,  or  under  a  statute  and  does  not  include  a  

company which is registered under the Companies Act. It is submitted that  

Companies  Act  merely  facilitates  and  lays  down  the  procedure  for  

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incorporation of a company which, when incorporated, will be governed by  

the provisions of the said Act and therefore, a company registered under the  

Companies Act, is not a corporation established under an Act.  

8. The  words  “a  Corporation  established  by  or  under  a  Central,  

Provincial or State Act” is a standard term used in several enactments to  

denote a statutory corporation established or brought into existence by or  

under statute. For example, it is used in sub-clause (b) of Clause Twelfth of  

Section 21 of the Indian Penal Code (‘IPC’ for short) and Section 2(c)(iii) of  

the  Prevention  of  Corruption Act,  1988 (‘PC Act’  for  short).  Both these  

statutes provide that a person in the service of a ‘Corporation established by  

or  under  a  Central,  Provincial  or  State  Act’  is  a  public  servant.  The  

Prevention  of  Damage  to  Public  Property  Act,  1984  defines  ‘public  

property’ as meaning any property owned by,  or in the possession of,  or  

under the control of (i) the Central Government (ii) any state government; or  

(iii) any local authority; or (iv) any corporation established by, or under, a  

Central, Provincial or State Act; or (v) any company as defined in Section  

617  of  the  Companies  Act,  1956;  or  (vi)  any  institution,  concern  or  

undertaking  which  the  Central  Government  may,  by  notification  in  the  

Official Gazette, specify in that behalf provided that the Central Government  

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shall  not  specify  any  institution,  concern  or  undertaking  under  that  sub-

clause unless such institution, concern or undertaking is financed wholly or  

substantially  by  funds  provided  directly  or  indirectly  by  the  Central  

Government or by one or more State Governments, or partly by the Central  

Government and partly by one or more State Governments. Thus the term is  

always used to denote certain categories of authorities which are ‘State’ as  

contrasted from non-statutory companies which do not fall under the ambit  

of ‘State’.

9. The meaning of the term came up for consideration in S. S. Dhanoa  

vs.  Municipal  Corporation,  Delhi  and  Ors.  -  1981  (3)  SCC  431  with  

reference to section 21 of IPC. This Court held:  

“Clause  Twelfth  does  not  use  the  words  "body  corporate",  and  the  question is whether the expression "corporation" contained therein, taken  in collocation of the words "established by or under a Central, Provincial  or  State  Act"  would  bring  within  its  sweep  a  cooperative  society.  Indubitably, the Cooperative Store Limited is not a corporation established  by a Central or State Act. The crux of the matter  is whether  the word  'under' occurring in Clause Twelfth of Section 21 of the Indian Penal Code  makes  a  difference.  Does  the  mere  act  of  incorporation  of  a  body  or  society under a Central or a State Act make it a corporation within the  meaning of Clause Twelfth of Section 21. In our opinion, the expression  'corporation'  must,  in  the  context,  mean  a  corporation  created  by  the   Legislature and not a body or society brought into existence by an act of a   group of individuals. A cooperative society is, therefore, not a corporation  established by or under an Act of the Central or State Legislature.

A corporation is an artificial being created by law having a legal entity  entirely separate and distinct from the individuals who compose it with the  

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capacity of continuous existence and succession, notwithstanding changes  in its membership. …….. The term 'corporation' is, therefore, wide enough  to include private corporations. But, in the context of Clause Twelfth of  Section 21 of the Indian Penal Code, the expression 'corporation' must be  given a narrow legal connotation.

Corporation, in its widest sense, may mean any association of individuals  entitled to act as an individual. But that certainly is not the sense in which  it is used here. Corporation established by or under an Act of Legislature  can only mean a body corporate which owes its existence, and not merely   its  corporate  status,  to  the  Act.  For  example,  a  Municipality,  a  Zilla  Parishad or a Gram Panchayat owes its existence and status to an Act of  Legislature.  On  the  other  hand,  an  association  of  persons  constituting  themselves into a Company under the Companies Act or a Society under  the  Societies  Registration  Act  owes  its  existence  not  to  the  Act  of  Legislature but to acts of parties though, it may owe its status as a body  corporate to an Act of Legislature.

There is a distinction between a corporation established by or under an Act  and a body incorporated under an Act. The distinction was brought out by  this  Court  in  Sukhdev  Singh  and  Ors.  v.  Bhagatram  Sardar  Singh  Raghuvanshi & Ors - (1975) 1 SCC 421.  It was observed :

A company incorporated under the Companies Act is not  created by the Companies Act but comes into existence in  accordance with the provisions of the Act.

There  is  thus  a  well-marked  distinction  between  a  body  created  by  a  statute  and a  body  which,  after  coming into  existence,  is  governed  in   accordance with the provisions of a statute.”

(emphasis supplied)

In Executive Committee of Vaish Degree College v. Lakshmi Narain - 1976  

(2) SCC 58, this Court explained the position further:  

“In  other  words  the  position  seems  to  be  that  the  institution  concerned must owe its very existence to a statute which would be  the fountainhead of its powers.  The question in such case to be  asked is, if there is no statute, would the institution have any legal   existence. If the answer is in the negative, then undoubtedly it is a  statutory body, but if the institution has a separate existence of its  own without any reference to the statute concerned but is merely  

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governed  by  the  statutory  provisions  it  cannot  be  said  to  be  a  statutory body.”

[emphasis supplied]

10. A  ‘company’  is  not  ‘established’  under  the  Companies  Act.  An  

incorporated company does not ‘owe’ its existence to the Companies Act.  

An incorporated company is formed by the act of any seven or more persons  

(or two or more persons for a private company) associated for any lawful  

purpose subscribing their names to a Memorandum of Association and by  

complying  with  the  requirements  of  the  Companies  Act  in  respect  of  

registration. Therefore, a ‘company’ is incorporated and registered under the  

Companies Act and not established under the Companies Act. Per contra,  

the Companies Act itself establishes the National Company Law Tribunal  

and National  Company  Law Appellate  Tribunal,  and those  two statutory  

authorities owe their existence to the Companies Act.  

11. Where the definition of ‘establishment’ uses the term ‘a corporation  

established by  or  under  an  Act’,  the  emphasis  should  be  on  the  word  

‘established’ in addition to the words ‘by or under’. The word ‘established’  

refers to coming into existence by virtue of an enactment. It does not refer to  

a company, which, when it comes into existence, is governed in accordance  

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with the provisions of the Companies Act. But then, what is the difference  

between ‘established by a central Act’ and ‘established under a central Act’?  

The  difference  is  best  explained  by  some  illustrations.  A  corporation  is  

established by an Act, where the Act itself establishes the corporation. For  

example, Section 3 of State Bank of India Act, 1955 provides that a Bank to  

be called the State Bank of India shall be constituted to carry on the business  

of banking. Section 3 of Life Insurance Corporation Act, 1956 provides that  

with effect from such date as the Central Government may by notification in  

the Official Gazette appoint, there shall be established a corporation called  

the  Life  Insurance  Corporation  of  India.  State  Bank  of  India  and  Life  

Insurance  Corporation  of  India  are  two  examples   of  corporations  

established by “a Central Act”.  We may next refer to the State Financial  

Corporation Act, 1951 which provides for establishment of various Financial  

Corporations under that Act. Section 3 of that Act relates to establishment of  

State Financial Corporations and provides that the State Government may,  

by notification in the Official Gazette establish a Financial Corporation for  

the State under such name as may be specified in the notification and such  

Financial Corporation shall be a body corporate by the name notified. Thus,  

a State Financial Corporation is established under a central Act. Therefore,  

when  the  words  “by  and  under  an  Act”  are  preceded  by  the  words  

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“established”, it  is clear that the reference is to a corporation established,  

that it is brought into existence, by an Act or under an Act. In short,  the  

term refers  to  a  statutory  corporation  as  contrasted  from a  non-statutory  

corporation incorporated or registered under the Companies Act.  

12. There is indication in the definition of ‘establishment’ itself,  which  

clearly establishes that all companies incorporated under the Companies Act  

are not establishments. The enumeration of establishments in the definition  

of ‘establishment’ specifically includes “a Government Company as defined  

in Section 617 of the Companies Act, 1956”. This shows that the legislature,  

took pains to include in the definition of ‘establishment’ only one category  

of  companies  incorporated  under  the  Companies  Act,  that  is  the  

‘Government Companies’ as defined in Section 617 of the Companies Act.  

If,  as  contended by the  employee,  all  Companies  incorporated  under  the  

Companies Act are to be considered as ‘establishments’ for the purposes of  

Section 2(k), the definition  would have simply and clearly stated that ‘a  

company incorporated or registered under the Companies Act, 1956’ which  

would have included a Government company defined under Section 617 of  

the  Companies  Act,  1956.  The  inclusion  of  only  a  specific  category  of  

companies  incorporated  under  the  Companies  Act,  1956  within  the  

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definition  of  ‘establishment’  necessarily  and impliedly  excludes  all  other  

types  of  companies  registered  under  the  Companies  Act,  1956,  from the  

definition of ‘establishment’.   It  is clear that the legislative intent was to  

apply section 47 of the Act only to such establishments as were specifically  

defined as ‘establishment’  under section 2(k) of the Act and not to other  

establishments. The legislative intent was to define ‘establishment’ so as to  

be  synonymous  with  the  definition  of  ‘State’  under  Article  12  of  the  

Constitution of India. Private employers, whether individuals, partnerships,  

proprietary concerns or companies (other than Government companies) are  

clearly excluded from the ‘establishments’ to which section 47 of the Act  

will apply.  

13. There is yet another indication in section 47, that private employers  

are excluded. The caption/ marginal note of section 47 describes the purport  

of the section as non-discrimination in Government employment. The word  

‘government’ is used in the caption, broadly to refer to ‘State’ as defined in  

Article  12  of  the  Constitution.  If  the  intention  of  the  legislature  was  to  

prevent  discrimination  of  persons  with  disabilities  in  any  kind  of  

employment, the marginal note would have simply described the provision  

as  ‘non-discrimination  in  employment’  and sub-section  (1)  of  section  47  

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would have simply used the word ‘any employer’ instead of using the word  

‘establishment’ and then taking care to define the word ‘establishment’. The  

non-use of the words ‘any employer’, and ‘any employment’ and specific  

use  of  the  words  ‘Government  employment’  and  ‘establishment’  (as  

defined), demonstrates the clear legislative intent to apply the provisions of  

Section 47 only to employment under the State and not to employment under  

others. While the marginal note may not control the meaning of the body of  

the section, it usually gives a safe indication of the purport of the section to  

the extent possible.  Be that as it may.

14. The learned counsel for the employee submitted that the decision in  

Dhanoa was rendered with reference to a penal statute; and that words or  

terms in such statutes are used in a restrictive and strict sense.  He contended  

that definition of words and terms in a penal statute will not provide a safe  

guide to interpret the same words employed in socio-economic legislations.  

He further contended that the terms used in a socio-economic statute like  

Disabilities Act, providing for full participation and equality, for people with  

disabilities  and to remove any discrimination against  them vis-à-vis  non-

disabled  persons,  should  be  interpreted  liberally.  He  submitted  that  any  

interpretation of the term ‘a corporation established by or under a central,  

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provincial  or  state  Act’  with  reference  to  the  Penal  Code  should  not  

therefore be imported for understanding the meaning of that term when used  

in  the  Act.  He referred to  and relied upon the Statement of  Objects  and  

Reasons of the Act which states that India as a signatory to the Proclamation  

on the Full Participation and Equality of the People with Disabilities in the  

Asian and Pacific Region, enacted the Statute to provide for the following :

(i) to spell out the responsibility of the State towards the prevention of  disabilities, protection of rights, provision of medical care, education,  training, employment and rehabilitation of persons with disabilities;

(ii) to create barrier free environment for persons with disabilities;

(iii) to remove any discrimination against persons with disabilities in the  sharing of development benefits, vis-à-vis non-disabled persons;

(iv) to counteract any situation of the abuse and the exploitation of persons  with disabilities;

(v) to  lay  down  a  strategy  for  comprehensive  development  of  programmes  and  services  and  equalization  of  opportunities  for  persons with disabilities; and

(vi) to  make  special  provision  of  the  integration  of  persons  with  disabilities into the social mainstream.”     

He submitted that keeping the said objects in view, the term ‘establishment’  

should be extended to all  corporations incorporated under the Companies  

Act 1956, irrespective of whether they are in the public sector or private  

sector.  

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14.1) He  also  relied  upon  the  following  principle  of  contextual  

interpretation  enunciated  by   this  Court  in  Reserve  Bank  of  India  vs.   

Peerless General Finance and Investment Co. Ltd., - 1987 (1) SCC 424:  

“Interpretation must depend on the text  and the context.  They are the  bases of interpretation. One may well say is the text is the texture, context  is what gives the colour. Neither can be ignored. Both are important. The  interpretation  is  best  which  makes  the  textual  interpretation  match  the  contextual. A statute is best interpreted when we know why it was enacted.   With this knowledge, the statute must be read, first as a whole and then  section by section, clause by clause, phrase by phrase and word by word.  If a statute is looked at, in the context of its enactment, with the glasses of  the  statute-maker,  provided  by  such  context,  its  scheme,  the  sections,  clauses,  phrases  and words  may  take  colour  and  appear  different  than  when the statute is looked at without the glasses provided by the context.  With these glasses we must look at the Act as a whole and discover what  each  section,  each  clause,  each  phrase  and  each  word  is  meant  and  designed to say as to fit into the scheme of the entire Act. No part of a  statute and no word of a statute can be construed in isolation. Statutes have  to be construed so that every word has a place and everything is in its  place.”  

14.2) He  next  relied  upon  the  principle  that  words  in  a  social  welfare  

legislation  should  receive  liberal  and  broad  interpretation,  stated  by  this  

Court in Workman of American Express International Banking Corporation  

v. Management of American Express International Banking Corporation -   

1985 (4) SCC 71 :  

“The principles of statutory construction are well settled. Words occurring  in statutes of liberal import such as social welfare legislation and human  rights  legislation  are  not  to  be  put  in  Procrustean  beds  or  shrunk  to  Liliputian  dimensions.  In  construing these legislations  the imposture  of  literal  construction  must  be  avoided  and  the  prodigality  of  its  misapplication must be recognized and reduced. Judges ought to be more  

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concerned  with  the  ‘colour’,  the  ‘content’  and  the  ‘context’  of  such  statutes (we have borrowed the words from Lord Wilberforce’s opinion in  Prenn v. Simmonds -  1971 (3) All ER 237). In the same opinion Lord  Wilberforce pointed out that law is not to be left behind in some island of  literal  interpretation  but  is  to  enquire  beyond  the  language,  unisolated  from  the  matrix  of  facts  in  which  they  are  set;  the  law  is  not  to  be  interpreted purely on internal linguistic considerations. In one of the cases  cited before us, that is,  Surendra Kumar Verma v. Central Government   Industrial  Tribunal-cum-Labour  Court (1981)  1  SCR  789,  we  had  occasion to say,

Semantic  luxuries  are  misplaced  in  the  interpretation  of  “bread  and  butter”  statutes.  Welfare  statutes  must,  of  necessity, receive a broad interpretation. Where legislation is  designed to give relief against certain kinds of mischief, the  Court  is  not  to  make  inroads  by  making  etymological  excursions.”

14.3) He  next  relied  upon the  following  observations  in  Kunal  Singh v.   

Union of India - 2003 (4) SCC 524, where this Court, referring to the very  

section under consideration, observed thus :  

“Section 47 contains a clear directive that the employer shall not dispense  with or reduce in rank an employee who acquires a disability during the  service. In construing a provision of a social beneficial enactment that too  dealing with disabled persons intended to give them equal opportunities,  protection  of  rights  and  full  participation,  the  view  that  advances  the  object of the Act and serves its purpose must be preferred to the one which  obstructs the object and paralyses  the purpose of the Act.  Language of  section 47 is plain and certain casting statutory obligation on the employer  to protect an employee acquiring disability during service.”  

15. We agree that the socio-economic legislations should be interpreted  

liberally.  It  is  also true that  Courts should adopt different  yardsticks and  

measures  for  interpreting  socio-economic  statutes,  as  compared  to  penal  

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statutes,  and  taxing  statutes.  But  a  caveat.  The  courts  cannot  obviously  

expand the application  of  a  provision  in  a  socio-economic  legislation  by  

judicial interpretation, to levels unintended by the legislature, or in a manner  

which militates  against  the  provisions  of  the  statute  itself  or  against  any  

constitutional  limitations.  In  this  case,  there  is  a  clear  indication  in  the  

statute, that the benefit is intended to be restricted to a particular class of  

employees,  that  is  employees  of  enumerated  establishments  (which  fall  

within the scope of ‘state’ under Article 12). Express limitations placed by  

the  socio-economic  statute  can  not  be  ignored,  so  as  to  include  in  its  

application, those who are clearly excluded by such statute itself.  We should  

not lose sight of the fact that the words “corporation established by or under  

a Central,  Provincial  or  State  Act” is  a  term used in several  enactments,  

intended  to  convey  a  standard  meaning.  It  is  not  a  term which  has  any  

special significance or meaning in the context of the Disabilities Act or any  

other socio-economic legislations. It is a term used in various enactments, to  

refer to statutory corporations as contrasted from non-statutory companies.  

Any interpretation of the  said  term, to include private sector, will not only  

amount to overruling the clear enunciation in  Dhanoa which has held the  

field for nearly three decades, but more importantly lead to the erasure of the  

distinction  maintained  in  the  Constitution  between  statutory  corporations  

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which are ‘state’ and non-statutory bodies and corporations, for purposes of  

enforcement  of  fundamental  rights.  The  interpretation  put  forth  by  the  

employee  would  make  employees  of  all  companies,  public  servants,  

amenable  to  punishment  under  the  provisions  of  Indian  Penal  Code  and  

Prevention  of  Corruption  Act;  and would  also  result  in  all  non-statutory  

companies and private sector companies being included in the definition of  

‘State’  thereby  requiring  them to  comply  with  the  requirements  of  non-

discrimination, equality in employment, reservations etc.  

16. The appellant next contended that the scheme of the Act,  does not  

confine its applicability to government or statutory corporations. Reference  

is invited to some provisions of the Act to contend that obligations/duties/  

responsibilities  are  fixed  with  reference  to  persons  with  disabilities,  on  

establishments other than those falling under section 2(k) of the Act. It was  

submitted that section 39 casts an obligation on all educational institutions,  

to  reserve  not  less  than  three  percent  of  the  seats  for  persons  with  

disabilities. In fact, it is not so. Though, the marginal note of section 29 uses  

the words ‘all educational institutions’ with reference to reservation of seats  

for persons with disabilities, the section makes it clear that only government  

educational institutions and educational institutions receiving aid from the  

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government shall reserve not less than three percent seats for persons with  

disabilities.  It  is  well  recognized  that  an  aided  private  school  would  be  

included within the definition of ‘State’ in regard to its acts and functions as  

an  instrumentality  of  the  State.  Therefore,  care  is  taken  to  apply  the  

provisions  of  the  Act  to  only  educational  institutions  belonging  to  the  

government or receiving aid from the government and not to unaided private  

educational institutions. Further, section 39 of the Act, does not use the word  

‘establishment’.  Reference is  next made to the section 44 which requires  

non-discrimination in transport. This section requires establishments in the  

transport sector to take special measures (within the limits of their economic  

capacity) to permit easy access to persons with disabilities. The employee  

contends  that  this  would  mean  that  all  establishments  whether  statutory  

corporations falling under the definition of section 2(k) of the Act or non-

statuary corporations, or even individuals operating in the transport sector  

should comply with section 44 of the Act. We do not propose to consider  

whether  Section  44  applies  to  non-statutory  corporations  in  the  transport  

sector, as that issue does not arise in this case. Further the use of the words  

“within the limits of their economic capacity” makes it virtually directory.  

Be that as it may.  

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Re : Question (ii)

17. As the appellant in CA No. 1886/2007 and the third respondent in CA  

No.  1858/2007,  are  not  establishments,  within  the  meaning  of  that  

expression in Section 2(k) of the Act, section 47 of the Act will not apply. In  

so  far  the  CA  No.  1858  of  2007,  there  is  an  additional  factor.   Third  

respondent  therein  was  not  the  employer  of  any  persons  with  disability.  

Therefore,  in that case,  the entire question is  academic.  In neither of the  

cases, any relief can be granted under section 47 of the Act.  

18. Therefore CA No. 1886 of 2007 is allowed and CA No. 1858 of 2007  

is dismissed resulting in the dismissal of the respective writ petitions. This  

will not come in the way of employee of any private company, who has been  

terminated  on  the  ground  of  disability,  seeking  or  enforcing  any  right  

available under any other statute, in accordance with the law.  

   _____________________J.       (R.V. RAVEENDRAN)

_____________________J.       (R. M. LODHA)

New Delhi.               _____________________J. March 31,  2010.                          (C. K. PRASAD)

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