AHMEDABAD MUNICIPAL CORPORATION &ANR. ETC.versusRAJUBHAI SOMABHAI BHARWAD AND ANR. ETC.

                     [2015] 8 S.C.R. 263


 AHMEDABAD MUNICIPAL CORPORATION &ANR. ETC.                       A
                               v.
    RAJUBHAI SOMABHAI BHARWADANDANR. ETC.
          (Civil Appeal Nos.10310-10311 of2014)
                                                                  B
                        JULY01, 2015
      [DIPAK MISRA AND UDAY UMESH LALIT, JJ.]

        Gujarat Panchayats Act, 1993-ss.5, 55, 101, 227-
Whether Sarpanch, while representing Gram Panchayat, is c
empowered to enter into a settlement with workmen
(employee of the. Gram Panchayat) on behalf of the Gram
Panchayat without proper resolution by the Gram Panchayat
- Held: Power to enter into settlement/compromise is
conferred on Gram Panchayat and not on the Sarpanch - D
 The provisions of the rules whereby the conditions of service
of the employees of the Panchayat are governed also show
that Sarpanch has to act in accordance with the Act and the
resolutions passed by the Panchayat -Thus, in absence of
the authority and in absence of statutory permissibility, E
entering into settlement by Sarpanch is inconceivable in law
- Sarpanch cannot be said to be employer of the workmen
as defined uls.2(g) of Industrial disputes Act- The Sarpanch
in the present case not only acted contrary to the provisions
of the Act, but also against the spirit of the responsibility cast F
on the local self-Government - Constitution of India, 1950-
Part IX - Industrial Disputes Act, 1947 - s.2(g) - Gujarat
Panchayat Services (Conduct) Rules, 1998.

       Words and Phrases - 'Panchayat' - Meaning of, in G
the context ofArt. 243(d) of the Constitution of India, 1950.

       Allowing the appeals, the Court

       HELD: 1. Section 5 of the Gujarat Panchayats Act,          H
                             263
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A clearly lays down that a village panchayat is a body
  corporate. The Sarpanch has been conferred certain
  executive functions under sub-Section 55(2) of the Act
  but the said power does not enable him to enter into a
  compromise. The power to enter into a compromise has
B been specifically postulated in Section 101 of the Act and
  that the said power has been conferred on the village
  panchayat. [Para 13] [277-G-H; 278-A]

      Board of Trustees, Ayurvedic and Unani Tibia College,
C     Delhi v. State of Delhi 1962 Suppl (1) SCR 156: AIR
      1962 SC 458 - followed.

      Daman Singh and others v. State of Punjab and others
      AIR 1985 SC 973: 1985 (3) SCR 580 - referred to.
D
         2. A body corporate can sue or be sued in its
  name. Section 101, confers power on the village
  panchayat to enter into a compromise. The village
  panchayat represented itself through the Sarpanch.
E Nothing has been brought on record that the Panchayat
  had conferred any authority on the Sarpanch to enter
  into any kind of settlement with the workman. In the
  absence of any authority and in the absence of any
  statutory permissibility, it is absolutely inconceivable in
F law that a Sarpanch can enter into settlement with a
  workman. A Sarpanch is required to look after the interest
  of the Gram Panchayat. The Legislature has given
  certain executive powers uls. 55 of the Act. It has its
  limitations. [Paras 14, 16] [280-B-D, G-H]
G
         3. The conditions of service are controlled and
  governed by the Gujarat Panchayat Service (Conduct)
  Rules, 1998 and certain powers are conferred on the
  Sarpanch. As the provisions would show, he has to act
H in accordance with the provisions of the Act and the
AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 265
           SOMABHAI BHARWAD

resolutions passed by the village panchayat [Para 13] A
(277-D-E]

        4. Section 2{g) of Industrial Disputes Act, 1947
defines the term "employer". By no stretch of
imagination, it can be held that the Sarpanch is the B
em_ployer of the workman. He belongs to the village
panchayat services, if he had properly been appointed.
It is the village panchayat which is the employer. [Para
15] (280-E-F]
                                                          c
       5. The parliament by the Constitutional
amendment required the State Legislature to bring their
State laws in conformity with Part IX of the Constitution.
Power has been conferred on the Panchayats so that
they are able to function as an institution of self- o
Government. The State Legislature has also been
empowered to make provisions by which powers are
given to the Gram Panchayats. Once responsibility is
given they a.re to be carried out with sanguine
responsibility. (Para 17] (281-F-H]                        E

 .    6. The Sarpanch in the present case by entering
into a settlement has not only acted contrary to the
provisions of the Act, but also the spirit of the
responsibility cast on the local self-Government. [Para   F
17] (281-H; 282-A]

                   Case Law Reference

1962 Suppl (1) SCR 156        Followed         Para 14
                                                          G
1985 (3) SCR 580              Referred to.     Para 14

      CIVILAPPELLATE JURISDICTION : Civil Appeal Nos.
10310-10311 of2014.
      From the Judgment and Order dated 17.07.2013 in     H
266         SUPREME COURT REPORTS                  [2015] 8 S.C.R.


A     Letters Patent Appeal No. 1070 of 1998 in Special Civil
      Application No. 7469 of 1997 and the judgment and final order
      dated 30.07.1998 in Special Civil Application No. 7469 of
      1997 of the High Court of Gujarat atAhmedabad.

B            Hemantika Wahi, Swati Vaibhav, Shasawat Panda for
      the Appellants.

            0. P. Bhadani,AshokAnand, Rakesh Kumar Singh, for
      the Respondents.
c           The Judgment of the Court was delivered by

            DIPAK MISRA, J. 1. The present appeals, by special
  leave, assail the judgment and order dated 17 .7 .2013 in LPA
  No. 1070/1998wherebythe Division Bench of the High Court
D has opined that against the order of the learned Single Judge
  under Article 227 of the Constitution of India, an intra-court
  appeal is not maintainable, and also question the defensibility
  of judgment and order dated 30. 7 .1998 passed by the learned
  Single Judge in Special Civil Application No. 7469 of 1997
E whereunder he has concurred with the award passed by the
  Labour Court which had, on the strength of a compromise
  entered into by the Sarpanch of Nava Naroda Gram Panchayat,
  the 2"d respondent with the workman and on that basis had
F directed his reinstatement in service or. the post of a clerk
  with full back wages.

          2. Atthe outset, it is necessary to clarify that we are not
  disposed to dwell upon the maintainability of the letters patent
  appeal before the Division Bench as that issue would be
G addressed separately in other cases. It is also apposite to
  mention here that the orders have been assailed by the Gram
  Panchayat as well as by the Ahmedabad Municipal
  Corporation (for short, 'the Corporation'), for both had preferred
H the intra-court appeal assailing the award of the Labour Court
  as well as the judgment and order of the learned Single Judge.
AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 267
     SOMABHAI BHARWAD [DIPAK MISRA, J.]

Be that as it may, as the Panchayat has preferred the appeal, A
it requires to be addressed on merits.

        3. The factual score which is necessary to be depicted
are that the 1•1 respondent was appointed as a 'Mukadam'
with the Gram Panchayat vide order dated 21. 5.1995. He was B
dismissed from service by oral order dated 23.1.1996. The
said order of dismissal constrained the first respondent to raise
an industrial dispute vide Reference No. 531 of 1996 before
the Labour Court, Ahmedabad. No written statement was filed
before the Labour Court, but a compromise was entered into C
between the workman and the Sarpanch stating, inter alia, that
the workman was working as a clerk in the Gram Panchayat
and he would be reinstated in service on the post of Clerk with
continuous service and would be entitled to get all future
benefits and further whatever amount is payable towards the D
post of Clerk, would be paid in three monthly instalments and
his service would be continuous.

         4. The legal acceptability of the award was assailed by
the Gram Panchayat on the ground that the Sarpanch had             E
entered into a compromise with the workman without any
authority from the Gram Panchayat and, therefore, the award
passed by the Labour Court was null and void. It was urged
that in the absence of any resolution by the Gram Panchayat,
tbe compromise and the consequent award were absolutely            F
unsustainable and deserved to be axed in exercise of writ
jurisdiction by the High Court. The learned Single Judge by
the impugned order dated 30. 7 .1998 considering the
submission opined that there was no mention in the writ petition
that the said compromise was entered into by the village           G
Sarpanch on account of any fraud or misrepresentation or
undue influence; that when the Gram Panchayat was made a
party and the Sarpanch was representing· the said Panchayat,
the Sarpanch was entitled under Section 55 of the Gujarat          H
Panchayats Act, 1993 (for brevity, "the Act"), to sign the
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A compromise; that the Sarpanch being the Chief Officer is the
  employer of the workman as per sub-clause 2 to Section 2(g)
  of the Industrial Disputes Act, 1947 and hence, the
  compromise executed between him and the workman was
  valid and legally enforceable; that while interpreting the award
B on the strength of compromise, it was open to the Panchayat
  to reinstate him on the post of Mukadam, the post which he
  was holding at the time of his retrenchment and that when there
  was admission in respect of the compromise before the Labour
  Court, there was no illegality in the award passed by the Labour
C Court. Being of this view, the learned Single Judge dismissed
  the writ petition.

          5. The Gram Panchayat and the Corporation preferred
  the intra-court appeal and as has been stated hereinbefore,
D the Division Bench relying on a Full Bench decision of the High
  Court in Revaben wdlo Ambalal Motibhaf'and Ors. vs.
  Vinubhai Purshottambhai Patel and others 1, ruled that the
  appeal was not maintainable. Hence, an appeal has been
  preferred against the order passed by the Division Bench and
E another appeal questioning the justifiability of the order passed
  by the Labour Court that has been affirmed by the learned
  Single Judge.

         6. As has been clarified earlier, we are not delving into
F the issue whether the intra-court appeal was maintainable or
  not. We shall only address to the correctness of the award
  passed by the Labour Court and the soundness of the judgment
  and order passed by the learned Single Judge concurring with
  the same. There is no cavil over the fact that the award has
G been passed by the Labour Court on the basis of a
  compromise entered into between the Sarpanch of the Gram
  Panchayat and the workman. Ms. Hemantika Wahi, learned
  counsel appearing for the appellant has raised a singular
H contention that the Sarpanch could not have entered into a
      1 20 13 (1) GLH 440
 AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 269
      SOMABHAI BHARWAD [DIPAK MISRA, J.]

compromise without the authority, that is, a resolution passed    A
by the Gram Panchayat.

        7. We have heard Ms. Hemantika Wahi, learned
counselfortheappellantand Mr. O.P. Bhadani learned counsel
for the respondent.                                               B

       8. The singular question that emerges for consideration
is whether the Sarpanch while representing the concerned
Gram Panchayat could have entered into a compromise on
behalf of the Gram Panchayat without a proper resolution of       c
the Gram Panchayat. The said issue has to be appreciated in
the backdrop of the provisions of the Act. Section 55 of the
Act enumerates the executive functions of Sarpanch and Upa-
Sarpanch. The relevant part of the said provision is reproduced
below:-                                                           D

  "55. Executive functions of Sarpanch and Upa-
  Sarpanch.-(1) Save as otherwise expressly provided
  by or under this Act, the executive power, for the purpose
  of carrying out the provisions of this Act and the              E
  resolutions passed by a village panchayat shall vest in
  the Sarpanch thereof who shall be directly responsible
  for the due fulfillment of the duties imposed upon the
  panchayat by or under this Act. In the absen(fe of the
  Sarpanch his powers and duties shall, save as may be            F
  otherwise prescribed by rules, be exercised and
  performed by the Upa-Sarpanch ..

  (2) Without prejudice to the generality of the foregoing
  provision:-                                                     G
  (a) the Sarpanch shall-
     (i) preside over and regulate the meetings of the
     panchayat;

     (ii) exercise supervision and control over the acts done     H
270          SUPREME COURT REPORTS                     [2015] 8 S.C.R.


A           and actions taken by all officers and servants of the
            panchayat;

            (iii) incur contingent expenditure upto fifty rupees at
            any one occasion;
B
            (iv) operate on the fund of the panchayat including
            authorization of payment, issue of cheques and
            refunds;

            (v) be responsible for the safe custody of the fund of
c           the panchayat;

            (vi} cause to prepare all statements and reports
            required by or under this Act;

o           (vii) exercise such other powers and discharge such
            other functions as may be conferred or imposed upon
            him by this Act or rules made thereunder."

               The aforesaid provision, as is perceptible, confers
E     certain powers on the Sarpanch for carrying out the purpose
      of provisions of the Act and the resolutions passed by village
      Panchayat and he shall be directly responsible for the due
      fulfillment of the duties imposed upon the Panchayat by or under
      the Act. That apart, the powers that have been mentioned in
F     sub-Section ( 1) is qualified by the words "Save as otherwise
      expressly provided by or under this Act". Sub-section (2)
      stipulates that without prejudice to the generality of the provision
      contained in sub-Section (1), the Sarpanch has been given
      certain powers.
G
          9. Having mentioned the powers of the Sarpanch, it is
  necessary to appreciate how a Village Panchayat functions
  under the Act. Section 2(14) defines "Panchayat" which means
  a village panchayat, taluka panchayat or district panchayat.
H Section 3 deals with establishment of Panchayats on different
  tiers. The said provision reads as follows:-
 AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 271
      SOMABHAI BHARWAD [DIPAK MISRA, J.]

  "3. Establishment of Panchayats of different tiers.-          A
  For the purpose ofthisAct, there shall be in each district-
     (1) A village panchayat for each village.
     (2) A taluka panchayat for each' taluka.
     (3) A district panchayat for each district."               B

        10. Section 4 provides for a Gram Sabha for a village
performing such functions as provided by or under the Act.
Section 5 stipulates that a village panchayat shall be a body
corporate. Chapter V of the Act provides for conduct of c
business, administrative powers and duties, property and fund
Accounts, etc. of Panchayat. Part I pertains to provisions
relating to Village Panchayat.' Under the heading (A) conduct
of business finds mention. Section 96 deals with questions to
be decided by majority of votes. It reads as follows:-        D
   "96. Questions to be decided by majority of votes.-
   All questions before a meeting of a panchayat or
   committee thereof or of a gram sabha shall be decided
   by a majority of votes of the members present and unless     E
   otherwise provided in this Act, the presiding officer .of
   the meeting shall have a second or casting vote in all
 . cases of equality of votes:

  Provided that in such circumstances and subject to such       F
  conditions as may be pres·cribed, a decision on any
  question before a panchayat or.committee thereof may
  be taken by circulating the propositions therefore for the
  vote of members."
                                                                G
      Under Caption (B) administrative powers and duties
have been prescribed. Section 99 which deals with
administrative powers of Panchayat reads as follows:-

  "Administrative powers of panchayats.- Subject to
  the provisions of this Act it shall be the duty of each       H
272       SUPREME COURT REPORTS                    [2015] 8 S.C.R.


A     panchayat to make in the area within its jurisdiction, and
      so far as the fund at its disposal will allow, reasonable
      provisions in regard to all or any of the matters specified
      in Schedule I."

B     Section 100 provides for other functions of Panchayat. It
      is as follows:-

      "100. Other functions of panchayats.-(1 )A Panchayat
      may with the previous sanction of the district panchayat,
c     incur expenditure on education or medical relief outside
      its jurisdiction if its finances permit.

      (2) A panchayat may also make provision for carrying
      out in the areas, within the limits of its jurisdiction any
      other work or measure which is likely to promote.-
D
      (a) the health, safety, comfort or convenience,

      (b) social, economic or cultural well being; and

E     (c) education including secondary education of the
      inhabitants of the areas.

       (3) A panchayat may, by resolution passed at its meeting
      and supported by two-thirds of the whole number of
      members make provisions for any public reception,
F     ceremony or entertainment in the area within its
      jurisdiction or may make contribution towards an annual
      gathering or such other gathering of panchayats in the
      district or the State or towards the fund of any institution
      which is established with the object of promoting the spirit
G
      of community, self-help and mutual aid among village folk
      and suggesting ways and means for the efficient
      administration of panchayats and which is recognized
      by the State Government:
H     Provided that except with the previous sanction of the
 AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 273
      SOMABHAI BHARWAD [DIPAK MISRA, J.]

  panchayat to which it is subordinate under section 6, the       A
  panchayat shall not incur expenditure exceeding one
  hundred rupees on any such reception, ceremony,
  entertainment or gathering.
  (4) If in respect of any land it comes to the notice of a
                                                                  B
  panchayatthat on account of the neglect of the occupant
  or superior holder thereof or dispute between him and
  his tenant the cultivation of the land has seriously suffered
  the panchayat may bring such fact to the notice of the
  competent authority.                                            c
  (5) A panchayat shall, in regard to the measures for the
  amelioration of the condition of Scheduled Castes and
  Scheduled Tribes and other backward classes, and in
  particular, in the removal of untouchability, carry out the
                                                                  D
  directions of orders given or issued in this regard from
  time to time by the State government or the competent
  authorityand in case the panchayat fails to carry out any
  direction or order so given or issued, it shall be lawful for
  the State Government to withhold the payment to the             E
  panchayat of all or any of the grants payable under
  Chapter XI after the panchayat has been given a
  reasonable opportunity of being heard ..

  (6) A panchayat shall perform other duties and functions
                                                                  F
  as are entrusted to it by or under any other law for the
  time being in force.

  (7) It shall be lawful for a panchayat to render financial
  or other assistance to any person for carrying on in the
  village panchayat any activity which is related to any of       G
  the matters specified in Schedule I."

       11. We have referred to the aforesaid provisions to
show the nature of powers conferred upon the authorities and
how they are to be exercised. Section 101 specifically deals H
274          SUPREME COURT REPORTS                    [2015] 8 S.C.R.

                                   ..
A with the power to compromise which is extracted below:-
         "101. Power to compromise
         (1) A village panchayat may compromise in respect of
         any suit instituted by or against it, or in respect of any
B        claim or demand arising out of any contract entered into
         by it under this Act, for such sum of money or other
         compensation as it shall deem sufficient:

         Provided that if any sanction in the making of any contract
c        is required by this Act, the like previous sanction shall be
         obtained for compromising any claim or demand arising
         out of such contract.

         (2) The panchayat may give compensation out of its fund
         to any person sustaining any dam2ge by reason of the
D
         exercise of any of the powers vested in it and its officers
         and servants underthisAct."

           12. On a plain reading of the aforesaid provision it is
  . graphically clear that specific power has been given to enter
E into a compromise in respect of suits and certain claims but
    the said power is to some extent curbed by the proviso. Be
    that as it may, the power is conferred for entering into any
    compromise on the village Panchayat.

F            13. In this context Section 227 occurring in Chapter XIII
      that deals with provisions relating to services is significant to
      be taken note of. Section 227 deals with Panchayat service
      to be regulated by rules .. To appreciate the controversy we
      think it apposite to reproduce Section 227:-
G
        "227. Panchayat service to be regulated by rules.-
        (1) For the purpose of bringing about uniform scales of
        pay and uniform conditions of service for persons
        employed in the discharge of functions and duties of
H       panchayats, there shall be constituted a panchayat
AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 275
    SOMABHAI BH~RWAD [DIPAK MISRA, J.]

 service in connection with the affairs of panchayats. Such    A
 service shall be distinct from the State service.

 (2) The panchayat service shall consist of such classes,
 cadres and posts and the initial strength of officers and
 servants in each such class and cadre shall be such, as       B
 the State Government may, by order from time to time
 determine:

 Provided that nothing in this sub-section shall prevent a
 district panchayatfrom altering, with the previous approval   c
 of the State Government any class, cadre or number of
 posts so determined by the State Government.

 (3)(a) The cadres referred to in sub-section (2) may
 consists of district cadres, taluka cadres and local
                                                               D
 cadres.

 (b) A servant belonging to a district cadre shall be liable
 to be posted whether by promotion or transfer to any post
 in any taluka in the district.
                                                               E
 (c) A servant belonging to a taluka cadre shall be liable
 to be posted whether by promotion or transfer to any post
 in any village in the same taluka.

 (d) A servant belonging to a local cadre shall be liable      F
 to be posted whether by promotion or transfer to any post
 in the same village.

 (4) In addition to the posts in the cadres referred to in
 sub-section (3), a panchayat may have such other posts        G
 of such classes as the State Government may by general
 or special order determine. Such posts shall be called
 "deputation posts" and shall be filled in accordance with
 the provisions of section 231.
 (5) Subject to the provisions of this Act, the State          H
                 ' ,,
276      SUPREME COURT REPORTS                   [2015] 8 S.C.R.


A     Government may make rules regulating the mode or
      recruitment either by holding examinations or otherwise
      and conditions of service or persons appointed to the
      panchayat service and the powers in respect of
      appointments, transfers and promotions of officers and
8     servants in the panchayts service and disciplinary action
      against any such officers or servants.
      (6) Rules made under sub-section (5) shall in particular
      contain-
c     (a) a provision entitling servants of such cadres in the
      panchayat service to promotion to such cadres in the
      State service as may be prescribed;

      (b) a provision specifying the classes of posts
D     recruitment to which shall be made through the District
      Panchayat Service Selection Committee and the classes
      of posts, recruitment to which shall be made by tlie
      Gujarat Panchayat Service Selection Board, and

E     (c) a provision regarding the percentage of vacancies
      to be reserved for the members of Scheduled Castes,
      Scheduled Tribes and Other Backward Classes in the
      panchayat service.

F     (7) Such rules may provide for inter-district transfers of
      servants belonging to the panchayat service and the
      circumstances in which and the conditions subject to
      which such transfers may be made.

G     (8) The promotion of servant in a cadre in the panchayat
      service to a cadre in the State service in accordance
      with rules made under clause (a) of sub-section (6) shall
      not affect-

      (a) any obligation or liability incurred or default
H
      committed by such servant during the period of his
 AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 277
      SOMABHAI BHARWAD [DIPAK MISRA, J.]

  service in a cadre in the panchayat service while acting      A
  or purporting to act in the discharge of his duties as such
  servant, or

  (b) any investigation, disciplinary action or remedy in
  respect of such obligation, liability or default, and any     B
  such investigation, disciplinary action or remedy may be
  instituted, continued or enforced in accordance with the
  law applicable thereto during the said period of service
  by such authority as the State Government may be
  general or special order specify in this behalf."             C

         On a scrutiny of the aforesaid provision it is vivid that
the services of employees of Panchayat are regulated by rules.
That apart, it is also luminous that it also includes the services
in a Panchayat in a Village. Be it noted, the State Government o
has framed a set of rules namely, Gujarat Panchayat Services
(Conduct) Rules, 1998. It is also noticeable there are various
 rules like Mali (Class IV) (Panchayat Service) Recruitment
 Rules, 1998, Mazdoors (Class IV) (Panchayat Service)
 Recruitment Rules, 1999, Plumber (Class IV) (Panchayat E
Service) Recruitment Rules, 1999, the Post of Cleaner (Class
 IV) (Panchayat Service) Recruitment Rules, 1998 etc. We
 need not dwell upon the facet who would be the competent
authority to remove an employee from service, for that is not
the controversy involved in the instant case. The purpose of F
referring to various provisions and rules is only to highlight the
fact that conditions of service are controlled and governed by
rules and certain powers are conferred on the Sarpa~ch. As
the provisions would show he has to act in accordance with
the provisions of the Act and the resolutions passed by the G
village panchayat. As we may notice from Section 55, the
Sarpanch has been conferred certain executive functions
under sub-Section 55(2) of the Act but the said power does
not enable him to enter into a compromise. The said power H
has been specifically postulated in Section 101 of the Act and
278            SUPREME COURT REPORTS                    [2015] 8 S.C.R.


A it is significant to note that the said power has been conferred
  on the village panchayat.
                14.
                 Section 5 of the Act, as we have stated earlier,
  clearly lays down that a village panchayat is a body corporate.
e In Daman Singh and others v. State ofPunjab and others2
  while dealing with validity of various cooperative societies Act,
  the Court referred to Section 30 of Punjab Cooperative
  Societies Act, 1961 which provided that the registration of
  cooperative societies shall make it a body corporate. While
C dealing the concept of corporation the larger Bench stated:-
           "What is a corporation? In Halsbury's Laws of England,
           4111 Edition., Volume 9, paragraph 1201, it is said:
           "A corporation may be defined as a body of persons (in
D
           the case of a corporation aggregate) or an office (in the
           case of a corporation sole) which is recognised by the
           law as having a personality which is distinct from the
           separate personalities of the members of the body or
E          the personality of the individual holder for the time being
           of the office in question.".

      A corporation aggregate has been defined in para 1204 as,
           "[A] collection of individuals united into one body under a
F          special denomination, having perpetual succession under
           an artificial form, and vested by the policy of the law with
           the capacity of acting in several respects as an individual,
           particularly of taking and granting property, of contracting
           obligations and of suing and being sued, of enjoying
G          privileges and immunities in common and of exercising
           a variety of political rights, more or less extensive,
           according to the design of its institution, or the powers
           conferred upon it, either at the time of its creation or at
           any subsequent period of its existence"
H
      2
          AIR 1985 SC 973
    AHMEDABAD MUNICIPAL CORPORATION v. RAJUBHAI 279
         SOMABHAI BHARWAD[DIPAK MISRA, J.]
'    '
       Thereafter the 'court referred to another Constitution A
Bench decision in Board of Trustees, Ayurvedic and Unani
Tibia College, Delhi v. State of DelhP. In the said case the
Constitution Bench had reproduced statements contained in
Halsbury's Laws of England a part of which was referred to in
Daman Singh (supra) and added:-                               B
    "A corporation aggregate has therefore only one capacity,
    namely, its corporate capacity. A corporation aggregate
. •'may be' .a trading corporation or a non-trading
    corporation. The usual examples of a trading corporation        c
    are (1) charter companies, (2) companies incorporated
    by special Acts of Parliament,
                                 .
                                      (3) companies n3gistered
                                                      '. -' . t -
    undertheCompaniesAct, etc. Non-trading corporations
    are illustrated by (1) municipal corporations, (2) district
    boards, (3) benevolent institutions, (4) universities etc.      D
    An essential element in the legal conception of a
    corporation is that its identity is continuous, that is, that
    the original member or members and his or their
    successors are one. In law the individual corporators, or
    members, of which it is composed are something wholly           E
    different from the corporation itself; for a corporation is a
    legal persona just as much as an individual. Thus, it has
   been held that a name is essential to a corporation; that
   a corporation aggregate can, as a general rule, only act
                                                                    F
    or express its will by deed under its common seal; that at
   the present day in England a corporation is created by
   one or other of two methods, namely, by Royal Charter of
   incorporation from the Crown or by the authority of
   l?arliament that is to say, by or by virtue of statute. There    G
   is authority of long standing for saying that the essence
   of a corporation consists in (1) lawful authority of
   incorporation, (2) the persons to be incorporated, (3) a
   name by which the persons are incorporated, (4) a place,
   and (5) words sufficient in law to show incorporation. No        H
3 1962 Suppl(1)SCR 156:AIR1962 SC458
280       SUPREME COURT REPORTS                   [2015] 8 S.C.R.


A     particular words are necessary for the creation of a
      corporation; any expression showing an intention to
      incorporate wil! be sufficient. n

           The purpose of referring to the same is that the village
B panchayat by a specific provision of the Act is regarded as a
  body corporate. A body corporate as has been held can sue
  or be sued in its name. Section 101, which we have already
  reproduced, confers power on the village panchayat to enter
  into a compromise. As the factual matrix has been uncurtained,
C the village panchayat represented itself through the Sarpanch.
  Nothing has been brought on record that the Panchayat had
  conferred any authority on the Sarpanch to enter into any kind
  of settlement with the workman, the first respondent herein. In
  the absence of any authority and in the absence of any statutory
D permissibility it is absolutely inconceivable in law that a
  Sarpanch can enter into settlement with a workman.

          15. Another material aspect which is required to be
  taken note of is that the learned Single Judge has referred to
E Section 2(g) of Industrial Disputes Act, 1947. It defines the
  term "employer". We are disposed to think that by no stretch
  of imagination it can be held that the Sarpanch is the employer
  of the workman. He belongs to the village panchayat services
  if he had properly been appointed. It is the village panchayat
F which is the employer. The laconic analysis on the part of the
  learned Single Judge in this regard does not commend
  acceptance and we are unable to agree with the same.

         16. In the obtaining factual score, we are impelled to
G observe that a Sarpanch is required to look after the interest
  of the Gram Panchayat. The Legislature has given certain
  executive powers under Section 55 of the Act. We repeat at
  the cost of repetition that it has its limitations. He should not
  rush into an area where angels fear to tread. Part IX of the
H Constitution has been inserted by the Constitution 73n:1
AHMEDA8AD MUNICIPAL CORPORATION v. RAJU8HAI 281
    SOMA8HAI 8HARWAD [DIPAK MISRA, J.]

(Amendment) Act, 1992. Article 243 is the dictionary clause. A
Article 243(d) defines "Panchayat" to mean an institution (by
whatever name called) of self-government constituted under
article 2438, for the rural areas. 2438 deals with the
constitution of Panchayats. 243C provides for composition of
Panchayats. 243G deals with powers, authority and 8
responsibilities of Panchayats. The said article is as follows:-

  "243G. Powers, authority and responsibilities of
  Panchayats - Subject to the provisions of this
  Constitution, the Legislature of a State may, by law, endow       C
  the Panchayats with such powers and authority as may
  be necessary to enable them to function as institutions
  of self-government and such law may contain provisions
  for the devolution of powers and responsibilities upon
  Panchayats at the appropriate level, subject to such              D
  conditions as may be specified therein, with respect to-

     (a) the preparation of plans for economic development
     and social justice;
                                                                    E
     (b) the implementation of schemes for economic
     development and social justice as may be entrusted
     to them including those in relation to thEl matters listed .
     in the Eleventh Schedule."
                                                                    F
       17. The purpose of our referring to the same is that the
parliament by the Constitutional amendment required the State
Legislature to bring their State laws in conformity with Part IX
of the Constitution. Power has been conferred on the
Panchayats so that they are able to function as an institution of G
self-Government. The State Legislature has also been
empowered to make provisions by which powers are given to
the Gram Panchayats. Once responsibility is given they are
to be carried out with sanguine responsibility. A Sarpanch, as
we perceive in this case, by entering into a settlement has not H
282          SUPREME COURT REPORTS                   (2015] 8 S.C.R.


A     only acted contrary to the provisions of the Act and but also the
      spirit ofthe responsibility cast on the local self-Government.

            18. In.this context, we cannot be oblivious of a very
   significant facet. The Labour Court as we find in a single line
B order has accepted the settlement and has not made any
   endeavour to even find out whether the Sarpanch was
   authorised with any kind of resolution to enter into compromise/
   settlement by the village panchayat. He should have borne in
   mind that it is not the Sarpanch who was the employer; that
C much of scrutiny was required on the part of the Labour Court.
   It will not be a hyperbole if it is said that it is the bounden duty
   on the part of the presiding officer of the Labour Court to do so
   and we say so without any hesitation, for court has a sacred
 · duty to scrutinize whether a valid compromise has been entered
D into or not. He has to be satisfied thatthe compromise is lawful.

          19. In view of the aforesaid analysis, we allow the
  appeals set aside the order passed by the learned Single
  Judge and that of the Labour Court and remit the matter to the
E Labour Court for fresh adjudication. We may hasten to clarify
  that we have not expressed any opinion on the merits of the
  case. As indicated earlier we have not dwelt upon as regards
  the maintainability of the intra court appeal and we have not
  expressed any opinion on th~t score. Be it clarified, the
F judgment of the Division Bench barring maintainability has not
  dealt with the issue of merits. Regard being had to the peculiar
  facts and circumstan~s of the case there shall be no order as
  to costs.

G     Kalpana K. Tripathy                               Appeals allowed.