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PETITIONER: HOUSING BOARD OF HAVANA

       Vs.

RESPONDENT: HAVANA HOUSING BOARD EMPLOYEES UNION AND ORS.

DATE OF JUDGMENT30/10/1995

BENCH: AHMAD SAGHIR S. (J) BENCH: AHMAD SAGHIR S. (J) KULDIP SINGH (J)

CITATION:  1996 AIR  434            1996 SCC  (1)  95  JT 1995 (8)    37        1995 SCALE  (6)139

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T S. SAGHIR AHMAD, J.      Whether  the   Haryana  Housing   Board  is   a  "Local Authority" within  the meaning  of  Section  32(iv)  of  the Payment of  Bonus Act, 1965 is the question to be decided in these appeals. If it is held that it is a "Local Authority", this Act,  namely, the Payment of Bonus Act, would not apply to its  employees, as  it is provided in Section 32(iv) that it  would   not  apply  to  those  categories  of  employees (including  the   employees  of   the   "Local   Authority") enumerated, specified and categorised therein.      "Local Authority"  has not  been defined in the Payment Bonus Act,  1965 but it has been defined in Section 3(31) of the General Clauses Act, 1897 as under      "  ’Local   authority’  shall   mean   a      municipal committee, district board body      of port commissioners or other authority      legally entitled to, or entrusted by the      Government  of   a  municipal  or  local      fund."      Incidentally, "Local  authority" has  also been defined in Section  2(J) of  the Haryana  Housing Board Act, 1971 as under:      "(J)   ’Local    authority’   means    a      municipality   constituted   under   the      Punjab Municipal Act, 1911 (Punjab Act 3      of   1911),    or   a   Gram   Panchayat      constituted  under   the   Punjab   Gram      Panchayat Act,  1952 (Punjab  Act  4  of      1953), or  a Panchayat Samity or a Zilla      Parishad constituted  under  the  Punjab      Panchayat Samities  and  Zilla  Parishad      Act, 1961  (Punjab Act 3 of 1961), or an      Improvement Trust  Improvement under the      Punjab Act 4 of 1922)."

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    Both the  definitions are conclusive in nature and only those  bodies  including  the  Municipal  Board  or  a  Gram Panchayat etc.  Will be  treated as "Local authority" as are mentioned therein.  But there is a significant difference in as much  as the  words "Authority  legally  entitled  to  or entrusted by  the Government with, the control or management of a  Municipal or  Local  Fund"  which  are  found  in  the definition contained  in the  General Clauses  Act  are  not found in  the definition of "Local Authority" in the Haryana Housing Board Act, 1971.      Concept of "Local Authority" is also found contained in Entry 5, List II of the Seventh Schedule of the Constitution which provided as under:      "5.   Local  Government, that is to say,      the constitution and powers of municipal      corporations,    improvement     trusts,      district   boards,   mining   settlement      authorities and  other local authorities      for the purpose of local self-government      or village administration."      The Entry  empowers the  State Legislature  to make law with respect  to any  subject relating  to Local  Government including the constitution of "Local Authorities". The State Legislature  can  also  confer  such  powers  as  it  itself possesses upon  a "Local  Authority", including the power of taxation (within  the limits of List II) for the purposes of Local Self  Government. The  "Local Authority", undoubtedly, is   a   representative   body   but   notwithstanding   its representative  character,   it   remains   a   sub-ordinate Authority created  by a  statute and,  therefore, it  cannot claim the  power of  taxation  which  belong  to  the  State Legislature except  to the extent it is conferred upon it by the statute which creates it.      The Municipal  Committees, the  District  Boards,  Gram Panchayats and Panchayat Samitis etc. represent the units of Local Self  Government where  people of  a local area govern themselves through  their elected representatives in respect of a  large number  of  matters  including  construction  of buildings, roads,  parks,  lighting  of  streets,  sewerage, conservancy  and   water  works   etc.  These   Local   Self Governments, namely,  the Municipal  Boards and the District Board etc.  are constituted under statutory provisions which elaborately provide who, on being elected, become members of the Municipal Boards or the District Board. These Boards are basically independents bodies with very little or minimal of Government control  and that  too in the limited field. They formulate their  own policies  and implement  those policies through the machinery provided under law. They have power to levy Panchayat, municipal or other local taxes and have also the power to realise those taxes through coercive processes, if they  are not  paid immediately on demand. They have also the right to raise, built up and manage their "local funds".      Under the  basic principle of statutory interpretation, the words  "Other Authority",  having  been  placed  in  the company of "Municipal Council" and "District Boards" etc. in the definition  of "Local  Authority" in the General Clauses Act  can   be  interpreted  to  mean  a  "Body"  having  and possessing, practically  all the  attributes of  a Municipal Board or  the District  Board so  far as  their  independent existence is concerened.      Similarly, in  the definition  of "Local  Authority" in the Haryana  Housing Board  Act, 1971,  it has been provided that  it  shall  mean  the  Municipality,  Gram  Panchayats, Panchayat Samitis, Zila Parishads and Improvement Trusts. It hardly requires to be mentioned that the Municipal Board,

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the  Gram  Panchayat  or  a  Panchayat  Samiti  or  a  Zilla Parishad, or for that matter, Improvement Trust, referred to in this  definition are, at least, partially, if not wholly, elected bodies.      In Municipal  Corporation  of  Delhi  v.  Birla  Cotton Spinning  and  Weaving  Mills,  Delhi  and  Anr.  (1968  (3) S.C.R.251), Hidayatullah,J.  (as he  then was  ) observed as under:      "Local bodies  are subordinate  branches      of  governmental   activity.  They   are      democratic institutions  managed by  the      representatives  of   the  people.  They      function for  public purposes  and  take      away a part of the government affairs in      local areas.  They  are  political  sub-      divisions and  agencies which exercise a      part of  state functions.  As  they  are      intended  to   carry  on   local   self-      government the  power of  taxation is  a      necessary adjunct to their other powers.      They function  under the  supervision of      the government."      In Valjibhai  Muljibhai Soney  and Anr. v. The State of Bombay (New  Gujarat) and  Ors. (1964  (3) S.C.R.  686)  the State Trading  Corporation  was  held  not  to  be  a  local authority within the meaning of Section 3(31) of the General Clauses Act.      The aforesaid  two cases  came to be considered by this Court in  Union of  India and  Ors. v.  R.C. Jain  and  Ors. (1981) (2)  S.C.R. 854)  in which  the question  whether the Development Authority  created under  the Delhi  Development Act, 1957  was a  "local authority"  within the  meaning  of Section 32(iv)  of the  Payment of  Bonus Act  or  not,  was involved and on a consideration of all the attributes of the Delhi Development  Authority, it  was held  to be  a  "local authority". This  Court speaking through O. Chinnappa Reddy, J. observed as under:      "What   then    are   the    distinctive      attributes and  characteristics, all  or      many of  which a Municipal Commissioners      shares with  any other  local authority?      First,   the   authorities   must   have      separate legal  existence  as  corporate      bodies.   They    must   not   be   mere      governmental  agencies   but   must   be      legally independant entities. Next, they      must  ordinarily,   wholly  or   partly,      directly or  indirectly, be  elected  by      the inhabitants  of the area. Next, they      must enjoy a certain degree of autonomy,      with freedom  to decide  for  themselves      questions of  policy affecting  the area      administered by  them. The degree of the      dependents may vary considerably but, an      appreciable measure  of  autonomy  there      must be. Next, they must be entrusted by      statute with such governmental functions      and duties  as are  usually entrusted by      statute with such governmental functions      and duties  as are  usually entrusted to      municipal   bodies,    such   as   those      connected with  providing  amenities  to      the inhabitants  of the  locality,  like      health and education services, water and      sewerage, town planning and development,

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    roads, markets,  transportation,  social      welfare services  etc.etc.  Broadly,  we      may say  that they may be entrusted with      the  performance  of  civic  duties  and      functions  which   would  otherwise   be      governmental   duties   and   functions.      Finally, they  must have  the  power  to      raise funds for the furtherance of their      activites and  the fulfilment  of  their      projects  by   levying   taxes,   rates,      charges,  or   fees.  This   may  be  in      addition   to    monies   provided    by      government or  obtained by  borrowing or      otherwise. What  is  essential  is  that      control or  management of  the fund must      vest in the authority."      Since  this   decision  will   equally  apply   to  the definition of  "Local Authority"  set  out  in  the  Haryana Housing Board  Act, 1971 as that definition is substantially similar to  the  definition  of  "Local  Authority"  in  the General Clauses  Act, it  is  in  the  light  of  the  above principals that  it has  to  be  seen  whether  the  Haryana Housing Board  answers the  attributes specified above so as to be  treated a  "local authority"  within the  meaning  of Section 32(iv) of the Payment of Bonus Act.      The Haryana  Housing Board  Act, 1971  in its  preamble states that  it is  "an Act  to provide  for measures  to be taken  to   deal  with  and  satisfy  the  need  of  housing accommodation."      The Statement  of "Objects  and Reasons" set out at the time of introduction of the Bill in the Legislative Assembly indicate, inter alia, as under:      "Next to  food and  clothing housing  is      the  basic  necessity  of  mankind.  The      housing problem  has become  serious  on      account of  the phenomenal  increase  in      population. Repid  industrialisation has      led to  the congestions  in urban areas.      The   concentration    of   almost   all      industries  in   urban  areas   and  the      comparative  high   wages  paid  to  the      factory workers coupled with the lack of      sufficient opportunities  in  the  rural      areas have  resulted in  a  large  scale      shift      of       population      from      villages..........           With  a   view   to   achieve   the      aforesaid   object    the   matter   was      considered   in    the   conference   of      Ministers for Housing, Urban Development      and Town  Planning held  at a  Bangalore      from  19th   to  20th  June,  1969.  The      consensus  of   opinion  was   that  the      statutory State  Housing Boards  are the      best agencies  for tentative  and speedy      implementation    of     the     housing      programmes. Accordingly,  it is proposed      to constitute  a Haryana  State  Housing      Board. Hence  the Haryana  Housing Board      Bill, 1971."      The Haryana  Housing Board  (for Short, ’the Board’ has been established  and constituted under Section 3 of the Act which, inter  alia, provides  that the Board shall be a body corporate having  perpetual succession and a common seal and shall have  the  power  to  acquire,  hold,  administer  and

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transfer property,  movable or  immovable, and to enter into contracts.      Sub-section (4)  of Section  3 provided  that the Board shall consist  of a Chairman, a Chief Administrator and such other Members,  not more that 12 and not less that 6, as the State Government  may, from  time to  time, by  Notification appoint. Unider  Section 5  of the Act, the State Government has the  power to  grant such  leave to the Chairman and the Chief Administrator  as may  be admissible to them under the Rules made under the Act.      Section 7 provides that every Member of the Board shall hold office for a period of three years from the date of his appointment and  shall be paid such salary and allowances as may be  prescribed. Conditions  of service are also required to be  prescribed by  Rules made  under the  Act. It is also provided in this Section that on the expiry of the term of 3 years,  a  Member  shall  be  eligible  for  re-appointment. Section 7-A indicates that the Chairman, Chief Administrator and other Members of the Boards shall hold office during the pleasure of the State Government.      Section 14  provides for the appointment of one or more committees for  any particular  local area  for  purpose  of discharging such  duties or performing such functions of the Board as  may be  delegated to  them with  due regard to the circumstances and requirements of that area.      Chapter III of the Act deals with the Housing Schemes. Section 20 provides as under:      "20.  Duty of Board to undertake housing      schemes.-- Subject  to the provisions of      this Act  and subject  to the control of      the  State  Government,  the  Board  may      incur expenditure and undertake works in      any area  for the  framing and execution      of  such   housing  schemes  as  it  may      consider necessary  from time to time or      as may  be entrusted  to it by the State      Government."      The exercise  of power  by the  Board  in  framing  and executing  Housing  Schemes  is  not  only  subject  to  the provisions of the Act but also subject to the control of the State Government.      The matters  which may  be provided  for in  a  Housing Scheme are  indicated in  Section 21 which include laying or re-laying of  the land,  construction and re-construction of buildings, construction  and alteration  of streets and back lanes, drainage,  water supply  and  lighting  of  the  area included in  the Scheme,  Parks,  playing  fields’  sanitary arrangements etc.      The accounts  of the  Board are  to be  audited by such persons as  are deputed  by the  Government (See sub-section (2) of  Section 61)  and the Board does not seem to have any choice in  the matter  except to submit its accounts to that person. The Board has also to comply with such directions as may be  issued to it by the State Government after a perusal of the  auditor’s report.  Special audit may also be made of the Board’s  accounts under  the  directions  of  the  State Government.      Other statutory  provisions indicating  control of  the State Government over the Board are contained in Sections 71 and 72 of the Act relevant portions of which are re-produced below:      "71.   Power   of  government   to  give      direction   to    Board.--   The   State      Government  may   give  the  Board  such      directions  as   in  its   opinion   are

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    necessary to  expedient for carrying out      the purposes  of this  Act, after giving      an opportunity to the Board to state its      objections, if  any, to  such directions      and   after    considering   the    said      objections and  it shall  be the duty of      the   Board    to   comply   with   such      directions.      72.   Control  of State  Government over      Board. (1)  The State  Government  shall      due  regard  to  the  circumstances  and      requirements of that area.      Chapter III of the Act deals with the Housing Schemes.      Section 20 provides as under:      "20.  Duty of Board to undertake housing      schemes.-- Subject  to the provisions of      this State  Government,  the  Board  may      incur expenditure and undertake works in      any area  for the  framing and execution      of  such   housing  schemes  as  it  may      consider necessary  from time to time or      as may  be entrusted  to it by the State      Government."      The matters  which may  be provided  for in  a  Housing Scheme are  indicated in  Section 21 which include laying or re-laying of  the land,  construction and re-construction of buildings, construction  and alteration  of streets and back lanes, drainage,  water supply  and  lighting  of  the  area included in  the Scheme,  Parks,  playing  fields,  sanitary arrangements etc.      The accounts  of the  Board are  to be  audited by such persons as  are deputed  by the  Government (See sub-section (2) of  Section 61)  and the Board does not seem to have any choice in  the matter  except to submit its accounts to that person. The Board has also to comply with such directions as my be  issued to  it by the State Government after a perusal of the  auditor’s report.  Special audit may also be made of the Board’s  accounts under  the  directions  of  the  State Government.      Other statutory  provisions indicating  control of  the State Government over the Board are contained in Sections 71 and 72 of the Act relevant portions of which are re-produced below:      "71.   Power   of  government   to  give      direction   to    Board.--   The   State      Government  may   give  the  Board  such      directions  as   in  its   opinion   are      necessary to  expedient for carrying out      the purposes  of this  Act, after giving      an opportunity to the Board to state its      objections, if  any to  such  directions      and   after    considering   the    said      objections and  it shall  be the duty of      the   Board    to   comply   with   such      directions.      72.   Control  of State  Government over      Board. (1)  The State  Government  shall      exercise  superintendence   and  control      over the  Board and its officers and may      cail for such information as it may deem      necessary and, in the event of its being      satisfied  that   they  Board   is   not      functioning properly  and is abusing its      powers and  is guilty  of corruption  of      mismanagement, it  may, by notification,

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    suspend the Board:           Provided that  the Board  shall  be      reconstituted, within  a period  of  one      year from the date of its suspension, in      the prescribed manner.      (2)   When  the Board is suspended under      sub-section    (1),     the    following      consequences shall ensue, namely:-      (a) ......................      (b) ......................      Chapter IV  deals with  the acquisition and disposal of land. Chapter  VII deals  with the Board’s finance, accounts and audit.  Section 56  provides that the Board shall have a fund called  the Housing  Board Fund  which shall consist of all moneys  received by  or behalf  of the Board as also all proceeds of  land or  any other kind of property sold by the Board, including  all rents,  interest,  profits  and  other moneys accruing  to the Board which has also been authorised by sub-section  (2) to  accept grants,  donations and  gifts from the  Central Government  or the  State Government  or a local  authority   or  any   individual  or   body,  whether incorporated or  not, for all or any of the purposes of this Act.      Section 72A  provides for appeals against orders passed by the  officers of  the Board  or the Chairman. Section 72B which provides  for a  revision to the State Government lays dow as under:      "72B.     Revision.-- The Government may      either suo  motu or on an application of      a party, call for and examine the record      of any  proceedings or decision or order      passed by  the  Board,  Chairman,  Chief      Administrator or  competent authority or      Deputy Commissioner or any other officer      appointed by  the State  Government  for      the purpose  of satisfying  itself as to      the legality  or properiety  of any case      it shall  appear to  the government that      any such decision or order passed and if      in any  case  it  shall  appear  to  the      government that  any  such  decision  or      order should  be modified,  annulled  or      revised,  the   Government  may,   after      giving the  persons affected  thereby an      opportunity of  being heard,  pass  such      order thereon as it may deem fit."      The above  provisions clearly  spell out that the Board which is  basically and essentially a creation of the Act of State Legislature consists of persons appointed by the State Government on  salary basis.  The Board’s  personnel are not elected by  the people  and there  is no element of people’s choice being  represented in  any manner in the constitution of  the  Board.  The  Board  functions  strictly  under  the supervision and control of the State Government and does not hold or possess a "local fund". What constitutes the fund of the Board has already been specified above.      These functions  as are  indicated in  a Housing Scheme are essentially  performed by  Municipal Boards or Municipal Council which,  undoubtedly, are  "Local Authorities" but on that analogy  the Haryana Housing Board cannot be treated to be a "local authority" as the extent of control of the State Government under  which the  Board has  to  function  is  so prominently pervasive  that it  is almost destructive of its independence which  will also be apparent from the fact that in the matter of settlement of its Annual Programmes, Budget

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and Establishment  schedule, the  Board has  to  obtain  the sanction of  the State  Government under  Section 24  of the Act. The  supplementary budget  and programme,  if any,  has also to be sanctioned by the State Government.      We need not refer to other provisions as the provisions already referred  to above  are sufficient to bring home the point that  Haryana Housing  Board does  not have  even  the semblance of  independence which  are normally  possessed by local self  Governments, like  Municipal Boards  or District Boards etc.  The Board  also does not even partially consist of elected representatives of the people.      The Board,  no doubt, has the power to levy and realise Betterment Charges (See Section 40 to Section 43 of the Act) and various  amount of  money due from presons in possession of the  properties of  the Boards  by way  of rent  etc. are recoverable as arrears of land revenue but that by itself is not sufficient  to clothe  the Board  with the  status of  a "local authority".      It  is   contended  by  the  learned  counsel  for  the appellant that  since it  has already  been provided in sub- section (3)  of Section  3 of the Haryana Housing Board Act, 1971 that  for purposes  of this  Act, namely,  the  Haryana Housing Board  shall be deemed to be a "Local Authority", it cannot but  be treated  to be  a "Local  Authority" with the consequence that  it is  not liable  to  pay  bonus  to  its employees as  it would  squarely fall  within the exceptions set out in Section 32(iv) of the Payment of Bonus Act. We do not agree.      Sub-section (3) of Section 3 provides as under:      "(3)  For  the purposes  of this Act and      the  Land  Acquisition  Act,  1894,  the      Board shall  be deemed  to  be  a  local      authority.      Explanation- The  purpose  of  this  Act      referred to  in sub-section  (3) include      the management and use of lands      and building  belonging to or vesting in      the Board  under or  for the purposes of      this Act  ant the exercise of its rights      over and  with respect to such lands and      buildings for the purposes of this Act."      It will  be seen  that the Legislature itself has given the Board  limited status  of "Local  Authority only for the purpose of  Land Acquisition  Act as  also the  parent  Act, namely, the Haryana Housing Board Act, 1971, under which the Board has  been constituted and established. The Legislature has given  this status  only fictionally  as the  Board,  in reality, is  not a "Local Authority" and that too only for a limited purposes. The Legislature could well have given this status to the Board for purpose of other Acts also including the  Payment  of  Bonus  Act  but  this  has  not  done  and consequently the Board cannot, specially in view of what has been stated  above, be  treated as  "local authority", under the Payment of Bonus Act.      There does  not, therefore,  appear to be any reason to differ from  the view  expressed by the learned Single Judge or by  the Division  Bench (in  appeal )  of the  Punjab and Haryana High Court that the Board is not a "local authority" as it  does not  possess the  attributes indicated  by  this court in the case of R.C. Jain (supra).      Learned counsel  for  the  appellant  referred  to  the decision of  this court in Surya Kant Roy v. Imamul Hak Khan (1975 (1) S.C.C. 531) wherein it was found that :      "Mines Board of Health constituted under      the Bihar  and Orissa  Mining Settlement

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    Act, 1920  is a  body  corporate  having      perpetual succession  and a  common seal      with power to hold and acquire property.      It consists  of not  less than seven and      not more than eleven members of whom not      less than two and not more than four are      elected by  owners of  mines within  the      Mining Settlement,  three  non-officials      selected by the State Government and two      or more  members but  not exceeding four      nominated of  the State  Government. The      Chairman of the Board is to be appointed      by the  State Government  from among the      members of the Board. A fund called ’The      Mining Settlment  Funds’ is  formed  for      every mining  settlement  and  the  fund      vests in the Board. The fund consists of      sums charged  by the Board under the Act      from  land-owners,  etc.  as  also  sums      allotted to  the Board  from  the  State      Revenuse; sums  borrowed  by  the  Board      under the  Local Authorities  Loans Act;      Grants received  from local authorities,      associations and  private persons,  etc.      The Board  appoints Health  officers  as      well as  Sanitary Inspectors.  The Board      can impose  taxes like Latrine taxes and      also make  yearly assessment.  There are      certain powers  conferred on  the  State      Government under the Act but they are no      more that  the power  conferred on State      Government’s in respect of various local      bodies. The  respondent was appointed by      the Government  as the  Chairman of  the      Jharia Mines  Board of  Health. We agree      with the learned Judge of the High Court      that  it  is  difficult  to  accept  the      argument that  the Board is wholly under      the control  of the  State Government in      all  its  functions.  The  Board  levies      taxes and  other assessments and has got      its  own   funds.  The   fact  that  the      Government and  other local  authorities      might make  grants to the Board does are      Government    funds     or    Government      properties. The  provisions we  have set      out above  are enough  to establish that      the Board  is a ’local authority’ within      the  meaning   of  that   expression  as      defined in  clause (31)  of Section 3 of      General Clauses Act, 1897."      It  will   be  relevant   to  point   out  the  further observations of the Supereme Court as under:      "Indeed, this  position does not seem to      have been  disputed  by  the  petitioner      before the  High Court  in the course of      his arguments.  We  do  not,  therefore,      think  that   the  mere  fact  that  the      respondent was  appointed as Chairman of      the Board  by the  government would make      him a person holding an office under the      State Government."      Thus, the  decision that  the Mines  Board was  a local authority was  not disputed. In any case, this Court, on the basis of  relevant statutory  provisions specially  that the

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Board has  power to levy taxes and other assessments and has got its  own fund,  found it to be a local authority. It may be pointed  out  that  the  decision  was  rendered  not  in connection with  the provision  of Payment  of Bonus Act but under provisions of the Representation of people Act to find out whether  an office  of profit under the State Government was held by the respondent.      Learned counsel  for the  appellant then cited Kendriya Nagrik Samiti, Kanpur and other vs. Jal Sansthan, Kanpur and others (AIR  1982 Allahabad  406) in  which it was held that Jal Sansthan  constituted by  the State Government under the U.P. Water  Supply and Sewerage Act, 43 of 1975 was a "Local Authority", although,  the Court  had also found it to be an instrumentality of  the State  Government.  The  High  Court noticed that  Jal Sansthan as defined in Section 2(9) of the Act meant  "a  Local  Authority  constituted  by  the  State Government under  Section 18  to perform its functions under the Act  in one  or more local areas" and on account of this definition,  the   High  Court,   after  referring   to  the definition of  the "Local Authority" in Section 4(25) of the U.P. General  Clauses Act,  held that  Jal  Sansthan  was  a "Local Authority"  which was  to  be  treated  at  par  with Municipal Corporation  etc. for  the purposes of Local Self- Government. It  may be  pointed out that under Section 18 of the Act,  Jal Sansthan  consists of,  amongst others,  three Sabhasads of  the Nagar  Mahapalika nominated  by the  State Government.  Sabhasads,  under  the  U.P.  Nagar  Mahapalika Abhihiyam, Municipal Corporation.      Learned counsel  for the appellant also relied upon the decision of  Mahavir and others vs. State of u.p. and others AIR 1979 Allahabad 3 in which Mandi Samiti constituted under the U.P.  Krishi Utpadan  Mandi Adhiniyam  was held  to be a Local Authority for purposes of Land Acquisition Act.      Significantly, Section  12(2) of the Adhiniyam contains a deeming  provision that  "the Committee  shall Acquisition Act, 1894  and any  other law  for the time being in force". (Emphasis  supplied).   This  case  is,  therefore,  clearly distinguishable.      Our attention  was next  drawn to  the decision  of the Mysore High  Court in  Workmen of  Mangalore Port  Trust vs. Management of  the Mangalore  Port and  Ors. (1973 Lab. I.C. 1536) in  which Board  of Trustees  of the Port of Mangalore was held  to be  a "Local  Authority" within  the meaning of Section 32(iv)  of the  Payment of  Bonus Act. The Judges of the Mysore  High Court  relied upon the definition of "Local Authority" contained  in Section 3(31) of the General Clause Act in  which the  Municipal Committee, District Board and a Body  of  Port  Commissioners  are  indicated  to  be  Local Authorities  and  then  they  observed  that  there  was  no difference between  the Body  of Port  Commissioners and the Board of  Trustees of  the Port of Mangalore and, therefore, the letter  has also to be treated as the "Local Authority". They also  relied upon the decision of the Madras High Court in Official  Assignee of  Madras vs. Trustees of the Port of Trust, Madras (AIR 1936 Madras 789) in which the Trustees of the Port  Trust, Madras,  on account  of the  definition  of "Local Authority".  A decision of the Calcutta High Court in Manoranjan Das  vs. Commissioner  Presidency  Division  (AIR 1970 Calcutta  179) which  was cited  before us  also by the learned counsel  for the  appellant, was  considered by  the Mysore High  Court and  it was  noticed  by  them  that  the Calcutta High Court held that since the Calcutta Dock Labour Board had to control and manage its fund which a local fund, it was a "Local Authority" within the meaning of the General Clauses Act.  This decision is, therefore, of no help to the

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appellant as  the concept regarding control and management a "Local Fund"  is outside  the scope  of  the  definition  of "Local Authority" in the Haryana Housing Board Act, 1971.      A decision  of the  Andhra Pradesh  High Court in Budha Veerinaidu vs.  State of  Andhra Pradesh  and Anr.  (143 ITR 1021) has  been cited  to indicate  that Agricultural Market Committee functioning  under the (Andra Pradesh Agricultural Produce and  Live Stock)  Markets Act,1966  was held to be a "Local Authority"  as it was found that the Market Committee was  entrusted  by  the  Government  with  the  control  and management  of   "Local  Fund".   This  decision   is   also distinguishable on  the  ground  that  definition  of  Local Authority in  the Haryana  Housing Board  Act, 1971 does not refer to entrustment, control or management of "Local Fund".      In  12,   I.C.  Bose   Road  Tenants’  Association  vs. Collector of  Howrah and  Ors. (AIR 1977 Calcutta 437) which was next  cited before us, it was not disputed that Calcutta Metropolitan Development  Authority was  a "Local Authority" within the  meaning of  Section 3(3)  of the General Clauses Act.      All the  aforesaid decisions  of  Various  High  Court, therefore, do  not help  counsel for the appellant as all of them are  clearly distinguishable. Moreover, the decision of this Court in Union of India and Ors. vs. R.C. Jain and Anr. (1981 (2)  SCR 854) which has already been referred to above by us was not referred to in any of these decisions as those decisions were  rendered prior to the decision of this Court except the  Allahabad decision  in Kandriya   Nagrik Samiti, Kanpur (supra) in which also this decision was not noticed.      R.C. Jain’s  case (supra)  was, however, noticed by the Bombay High  Court in Krishi Utpanna Bazar Samiti vs. Income Tax Officer  and Others  (158 ITR  742) in which the Hon’ble Judges after  considering  the  scheme  of  the  Maharashtra Agricultural Produce  Marketing (Regulation)  Act, 1963  and after scrutinizing the tests laid down by this Court in R.C. Jain’s case observed as under:      "The Market  Committee clearly satisfies      all these  tests. It is a body corporate      having  separate   legal  existence  and      autonomous. It  is  independent  of  the      Government and  operates  in  a  defined      area. Its office-bearers are elected and      are  free   to  take  their  own  policy      decision.   It   performs   governmental      functions  such   as   running   market,      providing  civil   amenities  and  doing      civil duties. It also performs judicial,      legislative,   executive    and   fiscal      functions."      Learned counsel for the appellant lastly contended that the Haryana  Housing Board  being an instrumentality  of the Government or,  in any  case, being  a statutory  body is an "Authority"  within   the  meaning  of  Article  12  of  the Constitution and  since Local  Authorities  have  also  been referred to  in article 12, the Board Should also be treated as a Local Authority. The argument is fallacious.      Article 12 provides as under:      "12.   Definition.   --  In  this  part,      unless the  context otherwise  requires,      ’the State’  includes the Government and      State’  included   the  Government   and      Parliament of  India and  the Government      and  the  Legislature  of  each  of  the      States   and    all   local   or   other      authorities  within   the  territory  of

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    India  or   under  the  control  of  the      Government of India."      This Article  contains the  definition of "State" which is an  inclusive  definition  and  includes  Government  and Parliament of  India, Government and the Legislature of each of the State as also all local or other Authorities. Article 12 does  not define  "Local Authority"  but defines "State". The attempt  of the  learned counsel for the appellant in to invoke  the   rule  of   ejusdem  generis  which  cannot  be permitted.      When particular  words pertaining  to a  class of genus are followed  by general  words,  the  latter,  namely,  the general words are construed as limited to things of the same kind as  those  specified    (See:  Kavalappara  Kottarathil Kochuni vs.  State of  Madras,  AIR  1960  SC  1080;  Thakur Amarasinghji vs.  State of Rajasthan, AIR 1955 SC 504). This is known  as the  rule  of  ejusdem  generis  reflecting  an attempt to  reconcile incompatibility  between the  specific and general  words (Tribhuwan  Parkash Nayyar  vs. Union  of India, AIR 1970 SC 540).      This Court  in Amar  Chandra vs.  Collector of  Excise, Tripura, AIR  1972 SC  1863 laid  down that the rule applies when "(1)  the statute  contains an  enumeration of specific words; (2) the subjects of enumeration constitute a class or category; (3) that class or category is not exhausted by the enumeration; (4)  the general  terms follow the enumeration; and (5)  there is  no indication  of a different legislative intent".      Thus, it  is essential  for application  of the ejusdem generis rule that enumerated things before the general words must constitute  a category  or a  genus. It was, therefore, pointed out  by Lord  Simonds in  Russel vs.  Scott (1948  2 AII.E.R. 1  (HL)) that  "indeed if  a collection of items is heterogeneous, it  almost seems  a conflict  in words to say that they belong to the same genus".      While interpreting the definitions of "Local Authority" contained in  the aforesaid  two Acts,  namely, the  General Clauses Act  and the  Haryana Housing  Board Act,  1971,  we invoked the  rule of ejusdem generis but this rule cannot be applied to  article 12  as the definition of "State" in this Article includes  several bodies  which are heterogeneous in character and, there is no genus in the definition.      For the reasons stated above, we find no merit in these appeals which  are hereby dismissed but without any order as to costs.