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PETITIONER: PRAGA TOOLS CORPORATION

       Vs.

RESPONDENT: SHRI C. A.  IMANUAL & ORS.

DATE OF JUDGMENT: 19/02/1969

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. BHARGAVA, VISHISHTHA

CITATION:  1969 AIR 1306            1969 SCR  (3) 773  1969 SCC  (1) 585  CITATOR INFO :  RF         1970 SC1150  (10)  F          1975 SC1329  (5)  MV         1975 SC1331  (124,126)  RF         1976 SC2216  (7)  D          1979 SC1628  (28)  RF         1981 SC 212  (38,51)  RF         1986 SC1571  (47,52)  RF         1988 SC 469  (6)  F          1989 SC1607  (20)

ACT: Constitution of India, Art. 226-Writ of mandamus whether can be  issued  against a company-High  Court  holding  petition under  Art.  226  to  be  misconceived  but  still  granting declaration  to  some  petitioners that  action  of  company against  them was illegal--Competence of High Court to  pass such order.

HEADNOTE: The  appellant was a company registered under the  Companies Act, 1913.  At the material time 56% of its shares were held by   the  Union  Government,  32%  by  the  Andhra   Pradesh Government and 12% by private individuals.  On July 1,  1961 a  settlement  was arrived at between the  company  and  the workmen’s union under which the workmen inter alia agreed to observe  industrial truce for a period of three  years  i.e. upto July 1, 1964 and not to resort to strikes, stoppage  of ’work or go slow tactics.  On December 10, 1962 the  company and  the said union entered into a supplementary  settlement under  which the company agreed not to retrench  or  lay-off any  of  the workmen during the said period of  truce.   The said  two  settlements were arrived at and recorded  in  the presence of the Commissioner of Labour under s. 2(p) and  s. 18(1) of the Industrial Disputes Act, 1947 and were to be in force  as  aforesaid until July 1, 1964.   On  December  20, 1963,  however, the company entered into  another  agreement with  the said union.  The effect of this agreement  was  to enable   the   company  notwithstanding  the   two   earlier settlements  to carry out retrenchment of 92 of the  workmen with  effect  from January 1, 1964.  Some  of  the  affected workmen  filed  a  writ  petition under  Art.  226 of  the

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Constitution  praying  for a writ of  mandamus  against  the company restraining it from giving effect to the said agree- ment.   The Single Judge dismissed the petition  on  merits. In appeal the Division Bench held that the company being one registered  under  the  Companies Act  and  not  having  any statutory  duty or function to perform was not  one  against which  a writ petition for mandamus or any other writ  could lie.    No  such  petition  could  also  lie   against   the conciliation officer who had signed the agreement, as on the facts of the case it was not he who sought to implement  the agreement.  The Division Bench however held that though  the writ   petition  was  not  maintainable  it  could-grant   a declaration  in favour of three of the petitioners that  the impugned agreement was illegal and void.  The competency  of the High Court to make such a declaration was challenged  by the company in appeal before this Court. HELD  :  (i)  ",The condition precedent to the  issue  of  a mandamus  is that there is in one claiming it a legal  right to the performance of a legal duty by one against whom it is sought.   An  order  of  mandamus is,  in  form,  a  command directed  to a person, corporation or an  inferior  tribunal requiring  him  or  them to do a  particular  thing  therein specified which appertains to his or their office and is  in the  nature of a public duty.  It is however  not  necessary that  the person or authority on whom the statutory duty  is imposed  need be a public official or an official  body.   A mandamus  can  issue,  for instance, to  an  official  of  a society to compel him to carry out the terms of the  statute under or by which the society 774 is  constituted  or  governed  and  also  to  companies   or corporations  to  carry  out duties placed on  them  by  the statutes  authorising their undertakings. A  mandamus  would also lie against a company constituted by a statute for  the purposes  of fulfilling public responsibilities. [778  H-779 C] In  the present case the company being a non-statutory  body and  one  incorporated  under the Companies  Act  there  was neither  a  statutory nor a public duty imposed on it  by  a statute  in respect of which enforcement could be sought  by means  of  a  mandamus  nor was there  in  its  workmen  any corresponding right for enforcement of any such statutory or public duty.  The High Court therefore was right in  holding that  no  writ petition for a mandamus or an  order  in  the nature of mandamus could lie against the company. [779 D-E] Sohan  Lal v. Union of India, [1957] S.C.R. 738,  Regina  v. Industrial  Court & Ors., [1965] 1 Q.B. 377, R. v.  Lewisham Union,  [1897]  1 Q.B. 498, 501, Mc.  Clelland  v.  Northern Ireland General Health Services Boards, (1957) 1 W.L.R. 594, Ridge   v.   Baldwin,  [1964]  A.C.  40,  Short   v.   Poole Corporation,  [1926], Ch. 66 at pp. 90 to 91  and  Attorney- General V. St.  Ives R.D.C. [1961] 1 Q.B. 366, referred to. (ii)The  High  Court was however in error in  granting  the declaration in favour of the three workmen. [781 A] Once  the writ petition was held to be misconceived  on  the ground  that  it could not lie against a company  which  was neither a statutory company nor one having public duties  or responsibilities imposed on it by statute, no relief by  way of  a  declaration  as  to the  invalidity  of  an  impugned agreement  between  it and its employees could  be  granted. The  only course open to the High Court was to  dismiss  the petition  and  leave the workmen to the remedies  under  the Industrial Disputes Act. [780 F-H] Bidi,  Bidi  Leaves’ and Tobacco  Merchants  Association  v. State  of  Bombay,  [1962] Supp.  1 S.C.R.  381  and  A.  B.

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Abdulkadir  v. State of Kerala, [1962] Supp. 2  S.C.R.  741, distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 612 of 1966. Appeal  by special leave from the judgment and  order  dated April  16,  1965 of the Andhra Pradesh High  Court  in  Writ Appeal No. 37 of 1964. S. V. Gupte and R. Thiagarajan, for the appellant. Janardan Sharma, for respondents Nos.  1 and 3. The Judgment of the Court was delivered by Shelat, J. The Praga Tools Corporation (hereinafter referred to  as  the  Company) is a company  incorporated  under  the Indian  Companies Act, 1913.  At the material time  however, the  Union Government and the Government of  Andhra  Pradesh between them held 56% and 32% of its shares respectively and the balance of 12% shares were held by private  individuals. Being the largest shareholder, the Union Government had  the power  to nominate the company’s directors.  Even so,  being registered under the Companies Act and governed by 775 the provisions of that Act, the company is a separate  legal entity  and  cannot  be  said  to  be  either  a  Government corporation or an industry run by or under the authority  of the Union Government. At  the material time there were two rival workmen’s  unions in  the  company, the Praga Tools Employees  Union  and  the Praga Tools Corporation Mazdoor Sabha (hereinafter  referred to  as  the union and the sabha respectively).  On  July  1, 1961  settlement was arrived at between the company and  the said  union  under which the workmen inter  alia  agreed  to observe  industrial truce for a period of three  years  and not  to  resort  to strikes, stoppage  of  work  or  go-slow tactics.  On December 10 1962 the company and the said union entered  into  a supplementary settlement  under  which  the company agreed not to retrench or lay-off any of the workmen during  the  said period of truce on an assurance  from  the said union of cooperation and willingness of the workmen  to carry  out alternative tasks assigned to them even  if  they were  in a slightly lower cadre without loss of  emoluments. The said two settlements were arrived at and recorded in the presence  of the Commissioner of Labour under ss.  2(p)  and 18(1) of the Industrial Disputes Act, 1947 and were to be in force  as  aforesaid until July 1, 1964.   On  December  20. 1963,  however, the company entered into an  agreement  with the said union to which the said sabha was not a party.  The agreement  recited that there were several disputes  between the  company  and the union and that some of them  were  the subject-matter  of  conciliation proceedings and  some  were pending  arbitration or adjudication.  Clause  (1)  provided that the said agreements dated July 1, 1961 and December 10, 1962  to  the extent that they were inconsistent  with  this agreement would stand automatically repealed or modified  by this  agreement.   Clause  (6)  stated  that  there  was  an immediate,  unavoidable need for reducing substantially  the overhead  expenditure  of  the  company  and  for  effecting economy  and therefore notwithstanding the  agreement  dated December’ 10, 1962 "both the parties have prepared a list of the  categories  and persons who would be  retrenched  after careful  consideration".  The said list was attached to  the agreement as annexure VI.  Clause (6) also provided that the agreement  dated December 10, 1962 stood modified so  as  to allow  the  said retrenchment to take place  immediately  in

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accordance  with law.  The clause further provided  that  in order   to  mitigate  the  consequences  of   the   proposed retrenchment  the company bad evolved a scheme of  voluntary retirement with terminal benefits superior to those provided under  the  Industrial  Tribunals Act,  but  the  scheme  of voluntary retirement would be available to the workmen  only for a period of 10 days from the date of the agreement.   It further provided 776 that  the  company  and the said union had  agreed  that  an attempt would be made to rehabilitate the retrenched persons by  helping  them to obtain alternative employment  and  the company  bad  for that purpose contacted public  sector  and other  industries  and in particular the  Heavy  Engineering Corporation, Ranchi for absorption as far as possible of the retrenched  personnel.  The effect of this agreement was  to enable   the  company,  notwithstanding  the   two   earlier settlements,  to  carry  out  retrenchment  of  92   workmen mentioned in annexure VI thereto with effect from January 1, 1964. Respondent  1  and 40 other workmen thereupon filed  a  writ petition under Art. 226 in the High Court of Andhra  Pradesh challenging  the validity of the said  agreement  impleading therein  the  company,  the  said  union  and  the  Regional Assistant Commissioner as respondents.  The petition claimed a writ of mandamus or an order in the nature of mandamus  or any other order or direction restraining the respondents  to implement or enforce the said agreement.  The writ  petition was in the first instance heard by a learned Single Judge of the High Court before whom the workmen raised the  following contentions : (1) that the said agreement dated December 20, 1963  was  invalid as it was entered into by  the  union  in collusion with the company and was in violation of the  said two earlier settlements, (2)  that   there   could   be   no industrial dispute within the meaning   of  s. 2(k)  of  the Act as the said two earlier settlements, not having     been terminated  under  s. 19(2) were in  force,  that  therefore there  could  not be a valid conciliation under  S.  12  and accordingly  the  fact of the  conciliation  officer  having signed  the impugned agreement gave no binding force to  it, (3) that the retrenchment of the 92 work-men was illegal and void  as it was in breach of s. 25(F) inasmuch as no  notice thereof  was  given to the appropriate Government,  and  (4) that  the  company being under the management of  the  Union Government,  the  appropriate Government in  regard  to  the dispute  was  the  Central  Government  and  not  the  State Government and consequently the impugned agreement which was signed  by the conciliation officer appointed by  the  State Government  was not valid and no retrenchment could  validly be effected under the force of such agreement. The learned Single Judge negatived these contentions holding that the company was neither an industry run by or under the authority  of the Union Government nor under its  management but  being a company registered under the Companies Act  the appropriate  Government was the State Government.   He  also held  that  there  was no proof of  the  said  union  having entered  into the impugned agreement in collusion  with  the company.  He further held that the union by its letter dated April 5, 1963, 777 had  raised an industrial dispute and had thereby  requested that the question of retrenchment should be settled  between the  parties, that the said dispute with the consent of  the company  and the union was brought for  conciliation  before the  conciliation officer and that the  impugned  agreement,

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having  been  brought  about  in  the  course  of  the  said conciliation   proceedings,  was  binding  on  all   workmen including  the petitioners in the writ petition despite  the fact  that  they were members of the sabha and  not  of  the union.   In this view the learned Single Judge held that  it was  not  necessary  for  him  to  decide  the   preliminary objection raised by the company that no writ petition for  a mandamus  could  lie  against it.   He  dismissed  the  writ petition  on merits on the basis of the  aforesaid  findings given  by him. 28 out of the said 41 workmen who  had  filed the writ petition filed a letters patent appeal against  the said  judgment.  The Division Bench of the High Court  which heard the appeal held : (1) that since the dispute  relating to  the company’s right to retrenchment was already  settled under  s.  18(1)  by the said  supplementary  settlement  of December  10, 1962, no industrial dispute could be  said  to exist or arise until the said settlement was duly terminated under  S.  19(2),  that therefore there could  be  no  valid conciliation  proceedings  in  respect of  the  question  of retrenchment and that the impugned agreement permitting  the company  to  retrench, though it bore the signature  of  the conciliation officer, was not a valid agreement; (2) that so long  as  the earlier settlements were not  terminated  they held the field, and (3) that the said letter dated April  5, 1963 relied on by the learned Single Judge as having  raised an industrial dispute regarding retrenchment did not in fact contain or raise any such question.  The Division Bench held that the said letter raised only the question of revision of wage-structure  and  other demands but not the  question  of retrenchment.    The  letter  of  July  29,  1963   of   the conciliation office, to the company relied on by the company also referred to the demands contained in the said letter of April 5, 1963, namely, the revision of wage-structure, dear- ness  allowance, promotion and other matters, but  not  the question  of  the  company’s  right  of  retrenchment.   The Division  Bench  therefore held that there  was  nothing  on record  to show that retrenchment was the subject-matter  of any   conciliation  before  the  conciliation  officer   and therefore any agreement conferring on the company the  right to retrench so long as the said earlier settlements were not terminated was invalid in spite of the conciliation  officer having given his assent to, and affixed his signature on it. The learned Judges however, held that the company being  one registered  under  the  Companies Act  and  not  having  any statutory  duty or function to perform was not  one  against which a writ petition for a mandamus or any other writ could lie.    No  such  petition  could  also  lie   against   the conciliation officer as on 778 the facts of the case that officer did not have to implement the  impugned agreement.  The Division Bench, however,  held that though the writ petition was not maintainable it  could grant  a  declaration in favour of  three  workmen,  namely, appellants  6,  16  and  25 before  it,  that  the  impugned agreement  was  illegal  and void  and  dismissed  the  writ petition  subject  to  the said  declaration.   The  company challenges  in this appeal by special leave the validity  of this judgment making such a declaration. Thus  the  only  question which arises  in  this  appeal  is whether in the view that it took that the writ petition  was not  maintainable against the company the High  Court  could still grant the said declaration. In  our view the High Court was correct in holding that  the writ  petition  filed under Art. 226  claiming  against  the company  mandamus or an order in the nature of mandamus  was

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misconceived  and not maintainable.  The writ obviously  was claimed against the company and not against the conciliation officer  in respect of any public or statutory duty  imposed on  him  by  the Act as it was not he but  the  company  who sought to implement the impugned agreement.  No doubt,  Art. 226  provides  that every High Court shall  have  power  to, issue to any person or authority orders and writs  including writs in the nature of habeas corpus, mandamus etc., or  any of  them for the enforcement of any of the rights  conferred by  Part III of the Constitution and for any other  purpose. But it is well understood that a mandamus lies to secure the performance of a public or statutory duty in the performance of  which the one who applies for it has a sufficient  legal interest.   Thus, an application for mandamus will not  lie for   an  order  of  restatement  to  an  office  which   is essentially   of  a  private  character  nor  can  such   an application   be   maintained  to  secure   performance   of obligations  owed  by a company towards its  workmen  or  to resolve  any  private dispute. (see Sohan Lal  v.  Union  of India)  (1).   In  Regina v. Industrial  Court  &  Ors.  (2) mandamus was refused against the Industrial court though set up under the Industrial Courts Act, 1919 on the ground  that the  reference for arbitration made to it by a minister  was not one under the Act but a private reference.  "This  Court has never exerciseda  general power" said Bruce, J., in  R. v.  Lewisham Union (1)"to enforce the performance  of  their statutory duties by publicbodies  on the application  of anybody who chooses to apply fora   mandamus.    It   has always  required  that the applicant for a  mandamus  should have a legal and a specific right to enforce the performance of  those duties".  Therefore, the condition  precedent  for the issue of mandamus is that there is in one claiming (1) [1957] S.C.R. 738.         (2) [1965] 1 Q.D. 377. (3)  [1897] 1 Q.D. 498, 501. 779 it  a legal right to the performance of a legal duty by  one against  whom  it is sought.  An order of  mandamus  is,  in form,  a  command directed to a person,  corporation  or  an inferior  tribunal requiring him or them to do a  particular thing  therein  specified which appertains to his  or  their office  and  is  in the nature of a  public  duty.   It  is, however,  not necessary that the person or the authority  on whom the statutory duty is imposed need be a public official or  an official body.  A mandamus can issue, for  ins-Lance, to  an official of a society to compel him to carry out  the terms  of  the  statute under or by  which  the  society  is constituted   or   governed  and  also   to   companies   or corporations  to  carry  out duties placed on  them  by  the statutes  authorising their undertakings.  A mandamus  would also lie against a company constituted by a statute for  the purposes   of  fulfilling  public   responsibilities.   (cf. Halsbury’s  Laws  of England, (3rd ed.) Vol. 11, p.  52  and onwards). The company being a non-statutory body and one  incorporated under the Companies Act there was neither a statutory nor  a public  duty imposed on it by a statute in respect of  which enforcement could be sought by means of a mandamus, nor  was there  in  its  workmen any corresponding  legal  right  for enforcement of any such statutory or public duty.  The  High Court, therefore, was right in holding that no writ petition for  a mandamus or an order in the nature of mandamus  could lie against the company. The  grievance of the company, however, is that  though  the High   Court  held  rightly  that  no  such   petition   was maintainable,  it  nevertheless  granted  a  declaration  in

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favour of three of the Raid workmen, a declaration which  it could  not issue once it held that ’the said  writ  petition was misconceived.  The argument was that such a declaration, if  at  all,  could  only issue  against  public  bodies  or companies  or corporations set up or controlled by  statutes in respect of acts done by them contrary to or in breach  of the  provisions  of such statutes.  If  a  public  authority purports to dismiss an employee otherwise than in accordance with  mandatory procedural requirements or on grounds  other than  those sanctioned by the statute the courts would  have jurisdiction  to declare its act a nullity.  Thus,  where  a Hospital  Services’ Board dismissed a clerk for reasons  not authorised   by  the  relevant  conditions  of   service   a declaration  was  granted to the applicant by the  House  of Lords.  (Mc.   Clelland v. Northern Ireland  General  Health Services  Boards)  (1)  Even where the  statutory  power  of dismissal   is  not  made  subject  to  express   procedural requirements  or limited to prescribed grounds  courts  have granted a declaration that it was invalidly exercised if the autho- (1)  [1957] 1 W.L.R. 594. 780 rity  has failed to observe rules of natural justice or  has acted capriciously  or  in  bad  faith  or  for  impliedly unauthorised purposes. (see Ridge v. Baldwin(1) and Short v. Poole  Corporation)  (2).  Declarations of  invalidity  have often  been founded on successful assertions that  a  public duty  has not been complied with. (see  Attorney-General  v. St.  Ives R.D.C.) (3).  It is, therefore, fairly clear  that such  a  declaration can be issued against a  person  or  an authority  or  a corporation where the impugned  act  is  in violation of or contrary to a statute under which it is  set up or governed or a public duty or responsibility imposed on such person, authority or body by such a statute. The  High  Court, however, relied on two decisions  of  this Court  as justifying it to issue the said declaration.   The two  decisions are Bidi, Bidi Leaves’ and Tobacco  Merchants Association  v. The State of Bombay(4) and A. B.  Abdulkadir v.  The  State of Kerala ( 5 ) . But neither  of  these  two decisions  is a parallel case which could be relied on.   In the  first case, the declaration was granted not  against  a company,  as  in  the present case, but  against  the  State Government and the declaration was as regards the invalidity of   certain  clauses  of  a  notification  issued  by   the Government  in pursuance of power under s. 5 of the  Minimum Wages  Act,  1948 on the ground that the said  clauses  were beyond  the  purview of that section.  In  the  second  case also,  certain  rules made under the Cochin Tobacco  Act  of 1081  (M.E.) and the Travancore Tobacco Regulation  of  1087 (M.E.)  were  declared  void ab initio.   These  cases  were therefore not cases where writ petitions were held to be not maintainable  as  having been filed against  a  company  and despite that fact a declaration of invalidity of an impugned agreement  having  been granted. In our view once  the  writ petition  was held to be misconceived on the ground that  it could  not  lie  against  a  company  which  was  neither  a statutory   company   nor  one  having  public   duties   or responsibilities  imposed on it by a statute, no  relief  by way  of  a  declaration  as to  invalidity  of  an  impugned agreement  between  it and its employees could  be  granted. The High Court in these circumstances ought to have left the workmen to resort to the remedy available to them under  the Industrial  Disputes Act by raising an  industrial  dispute thereunder.  The only course left open to the High Court was therefore  to  dismiss it.  No such  declaration  against  a

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company  registered under the Companies Act and not  set  up under   any  statute  or  having  any  public   duties   and responsibilities  to perform under such a statute  could  be issued in writ proceedings in respect of an agreement  which was  essentially of a private character between it  and  its workmen.  The (1) [1964] A.C. 40.   (2) [1926] Ch. 66 at pp. go to 91. (3) [1961] 1 Q.B. 366.   (4) [1962] Supp.  1 S.C.R, 381. (5)[1962] Supp. 2 S.C.R. 741. 781 High  Court,  therefore, was in error in granting  the  said declaration. The result is that the appeal must be allowed and the  said declaration set aside.  In the circumstances of the case  we make no order as to costs. G.C. Appeal allowed. 782