Supreme Court of India
TATA MEMORIAL HOSPITAL WORKERS UNIONversusTATA MEMORIAL CENTRE AND ANOTHER
- Citation
- 2010 INSC 487
- Decided
- 9 August 2010
- Disposal
- Appeal(s) allowed
- Bench
- ALTAMAS KABIR
Holding
The State Government is the appropriate government for Tata Memorial Centre, making the applications under the MRTU‑PULP Act maintainable and the High Court’s judgment erroneous.
Summary
The Tata Memorial Hospital Workers Union, a trade union registered under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, sought to maintain its recognition against a rival workers' association. The rival argued that the Tata Memorial Centre (TMC) was under the Central Government, making the applications under sections 13 and 14 of the Act non‑maintainable. The Supreme Court examined whether the "appropriate government" for TMC, for purposes of the Industrial Disputes Act, 1947 and the MRTU‑PULP Act, was the State or the Central Government, focusing on the nature of TMC’s property, its governance by a society’s Governing Council, and the absence of Central Government control. Applying the tests laid down in Steel Authority of India Ltd. and earlier cases, the Court held that TMC functions independently and is not an instrument of the Central Government; therefore the State Government is the appropriate government. Consequently, the applications filed by the rival union are maintainable, the industrial court’s dismissal on merits stands, and the High Court’s contrary judgment is set aside.
Issues considered
- The appropriate government for Tata Memorial Centre under the Industrial Disputes Act and the MRTU‑PULP Act
- Whether the applications under sections 13 and 14 of the MRTU‑PULP Act are maintainable
- Whether the property of the Centre is vested in the Central Government or the Governing Council of the Society
- Whether the Centre functions as an agent of the Central Government or as an independent entity
Legislation cited
Subjects
appropriate governmentindustrial disputestrade union recognitionstate vs central governmentproperty vestingTata Memorial Centrelabour law
Judgment
[2010] 9 S.C.R. 723
TATA MEMORIAL HOSPITAL WORKERS UNION A
v.
TATA MEMORIAL CENTRE AND ANOTHER
(Civil Appeal No. 6394 of 2010)
AUGUST 9, 2010
B
[ALTAMAS KABIR, CYRIAC JOSEPH AND H.L.
GOKHALE, JJ.]
Maharashtra Recognition of Trade Unions and
Prevention of Unfair Labour Practices Act 1971: C
s. 2(3) - Tata Memorial Centre - 'Appropriate
Government' for -Determination of - Held: State Government
is the 'appropriate government' for Tata Memorial Centre for
the purpose of Industrial Disputes Act and MRTU and PULP 0
Act - TMC cannot be held to be functioning under authority
of the Central Governmen.t - Property dedicated to TMC will
be deemed to be vested in the Governing Council of TMC-
Society though Central Government has not transferred it to
the Society- Day to day affairs of TMC and its property funds, E
employment of its staff and their conditions of service are
administered and controlled by the Governing Council of
TMC - Evidence establishes independent functioning of
TMC under its Governing Council - Industrial Disputes Act,
1947 - s. 2(a) - Labour laws.
F
Industrial Disputes Act, 1947 - s. 2(a) - Appropriate
Government - Concept of - Explained.
The appellant is a trade union registered under the
Maharashtra Recognition of Trade Unions and Prevention G
of Unfair Labour Practices Act 1971 (M.R.T.U. & P.U.L.P.
Act, in short), and the employees of respondent no. 1 are
the members of the appellant-trade union. Respondent
no. 2-workers association is another trade union
723 H
724 SUPREME COURT REPORTS [2010] 9 S.C.R.
A functioning under respondent no. 1. Respondent no. 2
filed applications before the industrial court seeking
cancellation of the recognition of the appellant union u/
s. 13 of the M.R.T.U. and P.U.L.P. Act and seeking its
substitution in place of the appellant union u/s. 14 of the
8 M.R.T.U. and P.U.L.P. Act. Respondent no. 1 raised an
objection in the written statement that the 'appropriate
government' for respondent no. 1 was the Central
Government and not the State Government and,
therefore, the proceedings under the M.R.T.U. and
c P.U.L.P. Act, were not maintainable. The industrial court
held that the 'appropriate government' for respondent no.
1 was the State Government and not the Central
Government; and the applications filed by respondent
no. 2 were held to be maintainable under the Act, though
the first application was not pressed and the second
0
application was dismissed on merits. Respondent no. 1
filed a writ petition. T.he Single Judge of the High Court
dismissed the same. The Division Bench of the High
Court allowed the appeal holding that the Central
Government was the 'appropriate government' for
E respondent no. 1 establishment for the purposes of
application of s. 2(3) of the M.R.T.U. and P.U.L.P. Act read
with s. 2(a) of the Industrial Disputes Act 1947; and the
applications filed by respondent no. 2 were not
maintainable. Therefore, the appellant filed the instant
F appeal.
Allowing the appeal, the Court
HELD: 1. Respondent no. 1 establishment cannot be
G held to be functioning under the authority of the Central
Government. The State Government is the appropriate
Government for respondent no. 1 for the purposes of
Industrial Disputes Act 1947 and the M.R.T.U. and P.U.L.P.
Act, 1971. The judgment of the Division Bench of the High
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 725
TATA MEMORIAL CENTRE
Court cannot be sustained. The two applications filed by A
respondent no. 2 would be maintainable under M.R.T.U.
and P.U.L.P. Act. The order of the industrial court holding
them to be maintainable but dismissing them on merits
is correct. [Para 64] [771-C-F]
B
2. Entry 22 in list Ill (Concurrent List) of the Seventh
Schedule to the Constitution of India relates to 'Trade
Unions; industrial and Labour disputes'. Entry 23
thereunder is 'social security and social insurance;
employment and unemployment'. Entry 24 is 'welfare of C
labour including conditions of work, provident fund,
employer's liability, workmen's compensation, invalidity
and old age pensions and maternity benefits'. Subject to
the provisions contained in clauses (1) and (2) in Article
246, the Legislature of a State can also make laws on
these subjects, and this is how the M.R.T.U. and P.U.L.P. D
Act 1971 makes provisions for recognition of trade unions
for collective bargaining, and for prevention of unfair
labour practices. It is also in the fitness of things that the
Industrial Disputes Act which is the principal Central Act
for investigation and settlement of Industrial Disputes E
lays down that for the industrial disputes concerning the
specified industries and for those carried on by or under
the authority of the Central Government, the Central
Government will be the 'appropriate government', but in
relation to any other industrial dispute the State F
Government will be the 'appropriate government'. [Para
18] [7 44-C-F]
Steel Authority of India Ltd. vs. National Union Watetfront
Workers (2001) 7 SCC 1; Heavy Engineering Mazdoor Union G
vs. The State of Bihar (1969) 3 SCR 995; Hindustan
Aeronautics Ltd. vs. Workmen (1975) 4 SCC 679; Rashtriya
Mill Mazdoor Sangh, Nagpur vs. Model Mills 1984 (Supp)
SCC 443; Carlsbad Mineral Water Mfg. vs. P.K. Sarkar AIR
1952 Calcutta 6; Food Corporation of India Workers Union
vs. Food Corporation of India 1985 (2) SCC 294; Air India H
726 SUPREME COURT REPORTS [2010) 9 S.C.R.
A Statutory Corporation vs. United Labour Union (1997) 9 SCC
377; R.D. Shetty vs. International Airport Authority of India
(1979) 3 SCC 489; Ajay Hasia vs. Khalid Muzib Sehravardi
(1981) 1 sec 722, referred to.
Tests emerging for determining whether the industry is
8
carried on under the authority of the Central Government
or the State Government:
3.1. When it comes to an industry governed under the
Industrial Disputes Act 1947, to be covered under the
C M.R.T.U. and P.U.L.P. Act, the State Government has to
be the 'appropriate government' in relation to any
industrial dispute concerning such industry. As per the
scheme of section 2 (a) of the Industrial Disputes Act, for
the industrial disputes concerning the industries specified
o in sub-section (i), and for the industries which are carried
on by or under the authority of the Central Government,
. the Central Government is the appropriate government.
Section 2 (a) (ii) provides that 'in relation to any other
industrial dispute' the State Government is the
E 'appropriate government'. Therefore, in an industrial
dispute concerning industries, other than specified
industries it has to be examine whether the industry is
carried on by or under the authority of the Central
Government. When it does not fall under either of the two
F categories, the State Government will be the appropriate
government. The said exercise is to be done basically in
the context of an industrial dispute to find out as to
whether in relation to any industrial dispute concerning
that industry, the Central Government is the 'appropriate
G government' or the State Government is the 'appropriate
government'. The word 'concerning' is defined as
'involving' or 'about'. It also means 'relating to',
'regarding' or 'respecting', having proximate, intimate and
real connection with the establishment. [Paras 45 and 46)
[761-8-G]
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 727
TATA MEMORIAL CENTRE
Oxford dictionary; Webster's Dictionary, referred to. A
3.2. The Industrial Dispute Act is an Act for
investigation and settlement of industrial disputes and
the M.R.T.P. and P.U.L.P. Act, 1971 is for recognition of
trade unions for facilitating collective bargaining for 8
certain undertakings and for prevention of certain unfair
practices amongst other objectives. The examination of
the issue as to which government is the 'appropriate
government' is to be carried out in this context. [Para 46]
[761-H; 762-A-B]
c
3.3. The test to determine whether the industry
carried on by the establishment is under the Authority of
the Central Government, is whether an undertaking/
instrumentality of the Government is carrying on an
industry under the Authority of the Central Government D
and not whether the undertaking is an instrumentality or
agency of the Government for purposes of Article 12 of
the Constitution. [Para 30] (753-G-H; 754-A-B]
Steel Authority of India Ltd. vs. National Union Waterfront E
Workers (2001) 7 SCC 1, followed.
3.4. The propositions in Steel Authority are to be seen
in the backdrop that merely because the government
companies I corporations and societies are discharging
public functions and duties that does not by itself make F
them agents of the Central or the State Government. The
industry or undertaking has to be carried under the
authority of the Central Government or the State
Government. That authority may be conferred either by
a statute or by virtue of a relationship of principle and G
agent, or delegation of power. When it comes to
conferring power by statute, there is not much difficulty.
However, where it is not so, whether the undertaking is
functioning under authority is a question of fact. It is to
H
728 SUPREME COURT REPORTS [2010] 9 S.C.R.
A be decided on the facts and circumstances of each case.
[Para 50] [763-G-H; 764-A-B]
Heavy Engineering Mazdoor Union vs. The State of
Bihar (1969) 3 SCR 995, referred to.
B How is the property of the respondent no. 1 vested:
4.1. Respondent no. 1 is an 'industry' within the
concept of industry as defined in s. 2(j) of the Industrial
Disputes Act 1947. Respondent no. 1 is not covered
c under the Bombay Industrial Relations Act 1946. [Para
16] [743-D]
4.2. The Tata Memorial Hospital was set up by Sir
Dorabji Tata Trust. It was being maintained out of the
funds of the Trust itself as well as from the grants made
0 over by the Central Government as well as by the State
Government. The Indian Cancer Research Centre was set
up by the joint collaboration of Sir Dorabji Tata Trust and
the Central Government by an agreement dated
07.10.1953. The initial grant for the Centre was given by
E the Central Government and it was meeting the expenses
of the Centre though it was set up on the land belonging
to the Trust. In 1957 Sir Dorabji Tata Trust decided to
dedicate to the nation the property on which the Tata
Memorial Centre stands. An agreement was entered
F between the trustees and the Central Government on
04.02.1957. The control and the management of the
hospital was transferred to the Central Government and
a vesting order was passed in the same year to that effect
by the City Civil Court in appropriate proceedings. In the
G year 1966, the Central Government and the Dorabji Tata
Trust entered into an agreement by virtue of which Tata
Memorial Hospital and the Indian Cancer Research
Centre were amalgamated and respondent no. 1 society
was created and the administration and the management
H of the Centre was vested in the Governing Council of the
TATA MEMORIAL HOSPITAL WORKERS UNION v. 729
TATA MEMORIAL CENTRE
said Society. Respondent no. 1-Centre was registered as A
a Society under the Societies Registration Act, 1860 as
well as under the Bombay Public Trust Act, 1950. [Para
52] [764-E-H; 765-A-B]
4.3. Under the agreement of 1957, the Dorabji Tata 8
Trust handed over the property to the Central
Government and that vesting had been continued in the
agreement of 1966 also. However, as per the said
agreement, the future acquisitions were to vest in the
Governing Council of the Society. Rule-26 of the Rules C
and Regulations of respondent no. 1-Society provides
that all properties and funds of the Centre (except the
immovable properties as specified) vest in the Council.
[Para 53] (765-D-E]
4.4. Section 5 of the Societies Registration Act D
provides for deemed vesting of the immovable properties
belonging to a society into the Governing Body of such
society. The raison d'etre of section 5 is that once a trust
is established and a society is registered for the
administration of the trust, the statute contemplates that E
the society should be fully autonomous and that the lack
of actual transfer of property of the trust should not
prevent the governing body in its administration. Law
recognizes that it would be proper to regard that as done
which ought to have been done. The deeming provision F
creates a fictional vesting in favour of the Governing
Council and not in favour of the Society or the Trust. Also
the society is not a body corporate. Since the society
cannot hold the property in its name, vesting of the
property in the trustees is likely to hinder the G
administration of the trust property, particularly, where..-
the trustees themselves or their legal representatives
claim adversely to the trust. Thus, the law vests the
property belonging to the society in its Governing Body.
(Para 55] [766-F-H; 767-A-C]
H
730 SUPREME COURT REPORTS [2010] 9 S.C.R.
A Board of Trustees, Ayurvedic and Unani Tibia College,
Delhi vs. The State of Delhi and Anr. AIR 1962 SC 458; 11/achi
Devi (D) by L.Rs. and Others vs. Jain Society, Protection of
Orphans India and Ors. AIR 2003 SC 3397, relied on.
4.5. The phrase 'property belonging to a person' has
8
two general meanings - (1) ownership, (2) the absolute
right of user. 'Belonging' connotes either ownership or
absolute right of user. The Centre has an absolute right
of user over its immovable properties which it has been
C exclusively exercising all throughout. Section 5 of the
Societies Registration Act clearly declares that the
property belonging to the society, meaning under its user,
if not vested in the trustees shall be deemed to be vested
in the Governing Council of the society. In the instant
case, it is nobody's case that the property remains vested
D in the Trustees of the Dorabji Tata Trust. The Central
Government has never claimed any title to the property
adverse to respondent no. 1. The property dedicated to
the Tata Memorial Centre has not been transferred to the
Society by the Central Government. But the fact is that it
E is the Governing Council of respondent no. 1 which has
been administering and controlling the day to day affairs
of Tata Memorial Centre and its property funds,
employment of its staff and their conditions of service.
Hence, the property dedicated to respondent no. 1 will be
F deemed to be vested in the Governing Council of
respondent no. 1-Society. [Para 56] [767-D-H; 768-A-B]
Att. Gen. vs. Oxford and C. Railway Co. 31 L.J. (1862)
218; The Governors of St. Thomas', St. Bartholomew's, and
G Bridewell Hospital vs. Hudgell (1901) 1 KB 381, referred to.
Whether the Control and Management of the Hospital and
the Research Centre is independently with the
respondent no. 1:
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 731
TATA MEMORIAL CENTRE
5.1. The Central Government has the power to A
appoint four nominees on the Governing Council of
respondent no. 1. Mere power to appoint the Directors
does not warrant a conclusion that the particular
undertaking is a Central Government Undertaking. It is
to be seen whether the undertaking is functioning as the B
agent of the Central Government. In the instant case, the
society was . creat.ed to entrust the control and
management ofJhe Hospital and the Research Centre to
the Society. Rule-3 of the Society also lays down that the
administration and the management vests in the c
Governing Council. As per Rules and Regulation Nos. 3
and 4, the administration and management of the Centre
is vested in the Council which is declared to be an
executive body of the centre. The final decision on the
extent of applicability of these rules to respondent no. 1
0
rests with the Tata Memorial Governing Council. Thus, as
per the .Rules and Regulations, the entire administration
and management of Tata Memorial Centre is with the
Governing Council. [Paras 57 and 58] [768~8-H; 769-A-
B]
E
Heavy Engineering Mazdoor Union vs. The State of
Bihar (1969) 3 SCR 995, relied on.
5.2. It has clearly come in the evidence of the Chief
Administrative Officer of respondent no. 1 that there was F
no interference of the Central Government in the day to
day activities of respondent no. 1. The decisions Were
taken by the directors of respondent no. 1 itself. It can
be seen from the bye-laws of respondent no. 1 that the
appointments and the service conditions were modeled G
on the pattern of Department of Atomic Energy, but the
pay, allowances and pension, etc. are on the pattern of
the Mumbai Municipal Corporation, and which are fixed
by the decisions of the Governing Council of respondent
no. 1. The material and the evidence clearly show that the
H
732 SUPREME COURT REPORTS [2010] 9 S.C.R.
A entrustment of the management and control of the
Hospital and the Research Centre to the Society was
complete and it has been so functioning thereafter. [Para
59] [769-C-E]
5.3. In a case where an industry is carried on by or
8
under the authority of the Government, the employer is
defined as the authority prescribed in this behalf or Head
of the Department. In the instant case, no such authority
has been prescribed, nor any head of the department
notified by the Central Government. On the contrary, right
C from the time the society was created, its administration
and management is completely under its Governing
Council and it is functioning independently. No contrary
evidence has been produced. The evidence of the Chief
Administrative Officer of the Tata Memorial Centre
D establishes the independent functioning of respondent
no. 1 under its Governing Council. It is the Governing
Council which has been exercising the executive powers
of the employer. [Para 60] [769-F-H; 770-A]
E 5.4. The rules of business of the Government of India
are for the purpose of allocation of business between
various departments of the Government of India
whenever the Government of India has to take a decision.
Mere allocation of business under any department would
F not in any manner decide the issue as to whether a
particular industry is under the control of the Central
Government. The business rules cannot be conclusive to
show that any institution or organization listed under the
allocation of business, would be part of any department
G of the Government of India. Even if a Minister appoints
the directors, gives directions, calls information or
supervises business, that will not make the industry an
agent of the Government. Even on the test of control and
management of the Hospital and the Centre, they are
functioning independently under respondent no. 1
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 733
TATA MEMORIAL CENTRE
Society. They cannot be said to be 'under the control', of A
the Central Government. [Paras 61, 62) [770-B-G]
Tata Memorial Centre vs. Sanjay Verma 1997 (75)
Indian Factories and Labour Reports 4, approved.
5.5. Until the instant litigation, neither the Central B
Government nor the Dorabji Tata Trust or even the
Governing Council of respondent no. 1 ever disputed the
application of the MRTU and PULP Act to respondent no.
1 establishment. Prior to the applications leading to the
instant appeal, respondent no. 1 also filed complaints C
under the MRTU and PULP Act. Neither the appellant nor
the second respondent ever disputed the application of
the Act. Respondent no. 1 by its own conduct acquiesced
into the application of the Act, and the appellant-Union
was recognized under the Act right from 1985. [Para 63) D
[770-H; 771-A-C]
5.6. On the test of control and management of the
Hospital and the Centre, they are functioning
independently under respondent no. 1 society. They
E
cannot be said to be 'under the control' of the Central
Government. In the circumstances the State Government
shall have to be held as the appropriate Government for
·respondent no. 1 for the purposes of l.D. Act and
consequently the M.R.T.U. and P.U.L.P. Act. The order
F
passed by the Division Bench of the High Court is set
aside and the order passed by the industrial court as
upheld by the Single Judge, is restored. [Paras 62 and
64] [770-G; 771-E-F]
Case Law Reference: G
(2001) 1 sec 1 Referred to. Para 5, 28 -
37,47,50,64
(1969) 3 SCR 995 Referred to. Para 19, 24,
47, 57, 60 H
734 SUPREME COURT REPORTS [2010] 9 S.C.R.
A (1975) 4 sec 679 Referred to. Para 24, 48
1984 (Supp) SCC 443 Referred to. Para 25
AIR 1952 Calcutta 6 Referred to. Para 25
1985 (2) sec 294 Referred to. Para 26, 49
B
(1997) 9 sec 377 Referred to. Para 27
(1979) 3 sec 489 Referred to. Para 27
(1981) 1 sec 122 Referred to. Para 27
c
(2001) 1 sec 1 Referred to. Para 28
(2001) 1 sec 1 Followed. Para 30
AIR 1962 SC 458 Relied on. Para 55
D AIR 2003 SC 3397 Relied on. Para 55
31 L.J. (1862) 218 . Referred to. Para 56
(1901) 1 KB 381 Referred to. Para 56
E 1997 (75) FLR 4 Referred to. Para 61
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6394 of 201 O.
From the Judgment & Order dated 10.02.2009 of the High
F Court of Judicature at Bombay in Appeal No. 133 of 2002 in
W.P. No. 2148 of 2001.
Colin Gonsalves. Vinod, T. Mirajkar, Divya Jyoti Jaipuriar,
Jyoti Mendiratta for the Appellant.
G Soli J. Sorabjee, Amit Kr. Singh, Shiv Kumar Suri for the
Respondents.
The Judgment of the Court was delivered by
H GOKHALE J. 1. Leave granted.
TATA MEMORIAL HOSPITAL WORKERS UNION v. 735
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
2. This appeal is directed against the judgment and order A
of a Division Bench of the Bombay High Court dated 10.2.2009
in Appeal No.133 of 2002 arising out of Writ Petition No. 2148
of 2001, whereby the Division Bench has held that for the first
respondent establishment, the Central Government was the
'appropriate government' for the purposes of application of B
Section 2(3) of the Maharashtra Recognition of Trade Unions
and Prevention of Unfair Labour Practices Act 1971
(hereinafter referred to as the M.R.T.U. and P.U.L.P. Act) read
with Section 2(a) of the Industrial Disputes Act 1947 (hereinafter
referred to as the l.D. Act). The Division Bench has held that c
the State Government was not the 'appropriate government' for
this purpose. Consequently the Applications concerned in the
present matter filed under the MRTU and PULP Act, namely
the Application of the second respondent for cancellation of the
status of the applicant as the recognized union under D
respondent No. 1, and Application for substitution of second
. respondent in place of the appellant, as t~e recognized union,
were held to be non-maintainable. The appellant is aggrieved
by the finding that the State Government is not the appropriate
government and that the MRTU and PULP Act has no
application to the first respondent establishment. It will result into
E
automatic denial of its status as the recognized union under the
MRTU and PULP Act and also into denial of the remedies
available to the appellant and to the employees, of the first
respondent, (against unfair labour practices, if any) and hence
this appeal by special leave. The right of the appellant to F
represent the employees of the first respondent (numbering over
1300) is thus, at stake.
3. The appellant is a Trade Union, registered under the
Trade Unions Act 1926 and the employees of the first G
respondent are its members. It is already registered under
Chapter Ill of the above referred MRTU and PULP Act as the
recognized union for the employees under the first respondent
by an order passed way back on 2.12.1985 by the Industrial
H
736 SUPREME COURT REPORTS [2010) 9 S.C.R.
A Court, Mumbai. Respondent No.2 'Tata Memorial Hospital
Kamgar Sanghatana' (i.e. workers association) is another trade
union functioning under the first respondent. By filing Application
MRTU No. 15of1994 before the Industrial Court, Mumbai, the
respondent No. 2 sought cancellation of the recognition of the
B appellant union under Section 13 of the MRTU and PULP Act.
Thereafter by filing another Application MRTU No.16 of 1994,
the second respondent sought its own recognition in place of
the appellant union under Section 14 of the MRTU and PULP
Act. Both these Applications Nos. 15 and 16 of 1994 were
c heard together. Oral and documentary evidence was led by
parties. The report of the Investigating officer appointed for the
verification of the membership of the two trade unions was
considered. The first respondent in its written statement raised
an objection to the maintainability of these proceedings under
MRTU and PULP Act by submitting that the 'appropriate
0
government' for the first respondent was the Central
Government and not the State Government, and hence, the
proceedings under the MRTU and PULP, were not
maintainable.
E 4. The Application (MRTU) 15 of 1994 had been filed on
the footing that the registration of the appellant as a trade union
itself had been cancelled by the Registrar of Trade Unions
under the Trade Union Act, 1926. The appellant pointed out to
the Industrial Court that the order of cancellation was
F misconceived and had in fact been stayed by the Bombay High
Court by its order passed in the Writ Petition No. 452 of 1994.
Thereupon, the second respondent conceded this position and
filed a pursis (memo) that Application (MRTU) No. 15 of 1994
be allowed to be withdrawn. The Industrial Court disposed of
G the two proceedings by its common judgment and order dated
29.6.2001. In that order it recorded that Application MRTU No.
15 of 1994 was being disposed of for want of prosecution. As
far as the Application No. 16 of 1994 is concerned, the
Industrial Court accepted the report of the Investigating Officer
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 737
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
whereunder he had held that during the relevant period for A
consideration of the Application under section 14 of the MRTU
& PULP Act, the valid membership of the appellant union was
more than that of the second respondent union. While deciding
so, it examined the material on record, considered the rival
submissions and held that the 'appropriate government' for the B
first respondent was the State Government. Therefore, although
the two Applications were held to be maintainable under the
MRTU and PULP Act, the Application No. 16 of 1994 was
dismissed on merits.
5. The first respondent filed Writ Petition No. 2148 of 2001
c
to challenge this judgment and order. The petition came to be
dismissed by a Single Judge of the High Court by holding that
the first respondent is an autonomous body and though the
Central Government was funding the first respondent partially,
it had only a partial control thereof. The Single Judge accepted D
the findings of the Industrial Court on the issue of appropriate
government to· be just, legal and proper and, therefore,
dismissed the Writ Petition, by his order dated 29.10.2001. This
was on consideration of the judgment of this court in Steel
Authority of India & Ors. vs. National Union Waterfront E
Workers & Ors. (2001) 7 SCC 1 (which had been rendered in
the meanwhile on 30.8.2001). This order of the Single Judge
has come to be reversed by the impugned judgment and order
passed by the Division Bench. The Division Bench has held
that the Governing Council of the first respondent was managing F
the institution as a delegate of the Central Government. This
was also on basis of its consideration of the judgment in Steel
Authority of India & Ors. (supra). The Division Bench held that
the Central Government was the appropriate government for the
first respondent and allowed the appeal. Consequently, it set G
aside the orders passed by the Single Judge as well as by the
Industrial Court.
6. Being aggrieved by this judgment and order of the
Division Bench the present appeal by special leave has been
H
738 SUPREME COURT REPORTS [2010] 9 S.C.R.
A filed. The appeal raises the question as to whether the Division
Bench correctly applied the law laid down by this Court in Steel
Authority of India (Supra) to the facts of the present case.
Though the second respondent has been described as a
proforma respondent, notices were issued to both the
B respondents and the affidavit of service with proof has been
filed by the appellant with respect to both of them. The petition
has been opposed by the first respondent by filing an exhaustive
counter and the appellant has filed a rejoinder thereto. Mr. Colin
Gonsalves, learned Senior Counsel has addressed us on behalf
c of the appellant, whereas Mr. Soli J.Sorabjee, learned Senior
Counsel, has defended the order of the Division Bench. Both
the parties have submitted their written submissions and we
have considered the same also.
7. Necessary Relevant Facts
D
Before dealing with the rival submissions on the issue
before the Court, viz. as to whether in the facts of the present
case the central government or the state government is the
'appropriate government,' it will be desirable to refer to the
E necessary relevant facts. The trustees of a public charitable trust
known as Sir Dorabji Tata Trust, established sometime in the
year 1940, a hospital in Mumbai, named as the Tata Memorial
Hospital for the Treatment and Cure of Cancer and Allied
Diseases. The hospital was then being maintained out of the
F funds of the trust and also from the grant made available from
time to time by the Central Government and by the then
Government of Bombay.
8. The Government of India was desirous of establishing
an Indian CanceF Research Centre for Post-Graduate Teaching
G and Research in Cancer and the same was established in
collaboration with the trustees of Sir Dorabji Tata Trust by an
agreement dated 7.10.1953. The Government of India gave the
initial grant for that Centre for setting up of a laboratory on a
portion of the land belonging to the trust and also undertook to
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 739
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
provide recurring expenditure in respect of salaries of the staff A
and contingencies of the management of the said Center.
9. The trustees of Sir Dorabji Tata Trust subsequently
decided to dedicate the hospital to the Nation with all its assets,
including its funds and the plots of land. They requested the B
Government of India to takeover its control and management
with effect from 4.2.1957. Accordingly, an agreement was
entered into between the trustees and the Central Government
on 4:2.1957 and under clause (1) thereof, the government
agreed to takeover control and management of the hospital and
to manage it at its own expenses from 1.4.1957. Under clause C
(2) of the agreement, the management of the hospital was to
rest in the hands of the Governing Board consisting of seven
members of the Board. Three of them were to be nominated
by the Government of India and three by Sir Dorabji Tata Trust.
The Superintendent of the Hospital was to be the ex-officio D
seventh member of the Governing Board and its Secretary.
Clause (3) of this agreement provided as follows:
"The Trustees of Sir Dorabji Tata Trust shall convey,
assign, transfer and deliver to the Government of India the E
immoveable properties and moveable properties and
assets of the hospital including the Cancer Infirmary Fund
and the assets of the Indian Cancer Research Centre and
the three plots refereed to above" (i.e. plots 107, 108 &
109 of Scheme No.60, Naigaum Estate.Mumbai).
F
10. The Trustees accordingly, filed a. suit being suit No.
568 of 1957 in the Bombay City Civil Court for framing a
Scheme and for giving effect to and incorporating the said
agreement dated 4.2.1957. The City C,lvil Court passed a
decree on 22.3.1957 and sanctioned the :scheme as annexed G
to the schedule. The relevant part of the court's order recorded
that the properties to be conveyed, transferred or assigned by
the trustees to the government being immovable properties
described in schedule 'B' thereto are hereby vested in the
H
740 SUPREME COURT REPORTS [2010] 9 S.C.R.
A government. The administrative control of the Tata Memorial
Hospital and the Indian Cancer Research Centre was thereafter
transferred to the Government of India. It first came under the
Ministry of Health and thereafter under the Department of
Atomic Energy with effect from 1.2.1962.
B 11. The Tata Memorial Centre has come to be specifically
mentioned in the rules for allocation of business of Government
of India framed under Article 77 of the Constitution of India. The
President of India in exercise of his powers under Article 77,
has framed by order dated 14.1.1961, the Rules for allocation
C of business of the Government of India. Rule 2 thereof deals
with the allocation of business and it states that the business
of the government shall be transacted in the Ministries,
Departments and Secretariats, as specified in the first
schedule to these rules (all of which are referred to as the
D departments). Item 22 of the first schedule to the said rules,
deals with the Department of Atomic Energy and item 10 of the
annexure to the schedule concerning Department of Atomic
Energy reads as followed:
E "10. All matters relating the Tata Memorial Centre,
Bombay."
12. Subsequently, an agreement was entered into
between the Government of India and the trustees of Sir Dorabji
Tata Trust on 6.1.1966, and the two institutions viz. Tata
F Memorial Hospital and Indian Cancer Research Centre were
amalgamated into an institution thereafter known as the Tata
Memorial Centre i.e. respondent No.1 herein. The Tata
Memorial Centre was registered as a Society under the
Societies Registration Act 1860 and also as a Public Trust,
G under the Bombay Public Trust Act 1950. Under the rules and
Regulations of this Society, the administration and
management of the Centre vests in a Governing Council under
Rule 3 thereof, and this council is the executive body of the
Centre. The council is constituted under Rule 4 thereof. Rule 3
H
~ '1 ' ' .
TATA MEMORIAL HOSPITAL WORKERS UNION v. 741
TATA MEMO~IAL CENTRE [H.L. GOKHALE, J.]
and 4 (i) of these Rules and Regulations read as follows: A
3. Administration and Management : Subject to
these Rules and such rules as may hereafter be
made from time to time, the administration and
management of the Centre shall vest in the Council, B
which shall be the executive body of the Centre.
4. Constitution of the Council:
(i) The Council shall consist of:
(a) Four members appointed by the
c
Government of India;
(b) Three members appointed by the
Trustees of the Sir Dorabji Tata Trust;
D
(c) The Director of the Centre (ex-officio)
The Director, TMH and the Director, CRI will be permanent
Invitees to the meetings of the Council. PROVIDED that,
to represent other interests, not more than two additional E
members may be co-opted by the Council, for such periods
as the Council may decide with the concurrence of the
Government of India and tr . Trustees of the Sir Dorabji
Tata Trust.
13. The question for our consideration is whether the first F
respondent functions under the authority of the Central
Government as its delegate as held by the Division Bench or
is functioning as an independent entity. This will enable us to
decide as to whether the Central Government or the State
Government is the "appropriate government" for the first G
respondent. We have also to keep in mind that we have to
decide this issue in the context of determination of an
'
application for recognition of a.trade union.
H
742 SUPREME COURT REPORTS [2010) 9 S.C.R.
A Statutory Framework
14. As stated earlier, the two Applications filed before the
Industrial Court, Mumbai which had led to the present Special
Leave Petition were filed under Sections 13 & 14 of the MRTU
and PULP Act 1971. These Sections 13 & 14 appear in
8
Chapter-Ill of the MRTU & PULP Act which Chapter deals with
Recognition of unions. Section 13 deals with Cancellation of
recognition and suspension of rights of a recognized union on
the conditions stipulated therein. Section 14 deals with
C Recognition of other union in place of a union already registered
as a recognized union and conditions therefor. As the preamble
of this Act lays down, one of the objectives of this Act is to
provide for the recognition of trade unions fpr facilitating
collective bargaining for certain undertakings, to state their
rights and obligations; and to confer certain powers on
D unrecognized unions. The other objective of this Act is to
prevent unfair practices with which, we are not directly
concerned in the present matter.
15. Since the question raised in the matter is whether the
E two applications filed under Sections 13 and 14 of MRTU and
PULP Act were maintainable or not, the same will depend upon
as to whether the State Government is the 'appropriate
government' for the first respondent. Section 2 of the MRTU
and PULP Act is relevant in this behalf. It deals with the extent,
F commencement and application of the Act. We are concerned
with sub-Section (3) thereof which reads as follows:
"(1) ............................................... .
(2) ................................................ .
G
(3) Except as otherwise hereinafter provided, this Act
shall apply, to the industries to which the Bombay Industrial
Relations Act, 1946, Born. XI of 1947, for the time being
applies, and also to any industry as defined in clause 0)
of section 2 of the Industrial Disputes Act, 1947, XIV of
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 743
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
1947, and the State Government in relation to any industrial A
dispute concerning such industry is the appropriate
Government under that Act;
Provided that the State Government may by
notification in the Official Gazette, direct that the provisions
8
of this Act shall cease to apply to any such industry from
such date as may be specified in the notification; and from
that date, the provisions of this Act shall cease to apply to
that industry and, thereupon, section 7 of the Bombay
General Clauses Act, 1904, Born. 1 of 1904, shall apply
to such cessor, as if this Act has been repealed in relation C
to such industry by a Maharashtra Act."
16. It is not disputed that the first respondent is an 'industry'
within the concept of industry as defined in Section 20) of the
Industrial Disputes Act 1947. The respondent No. 1 is admittedly D
not covered under the Bombay Industrial Relations Act 1946.
The question is whether in relation to any industrial dispute
concerning the first respondent, the State Government is the
'appropriate government' under the Industrial Disputes Act
1947. I E
17. It, therefore, becomes necessary to look into the
definition of 'appropriate gove· ment' under the Industrial .
Disputes Act 1947. Under Section 2(a) of the Industrial
Disputes Act 1947 'appropriate government' means;
F
(i) in relation to any industrial dispute concerning an
industry carried on by or under the authority of the
Central Government, (or concerning, industries
specifically mentioned in this sub-section starting
from a railway company upto a major port), the G
Central Government; and
(ii) in relation to any other industrial dispute, the State
Government.
H
744 SUPREME COURT REPORTS [2010] 9 S.C.R.
A Thus, it is clear that under the Industrial Disputes Act, the
Central Government is the 'appropriate government' in relation
to the industrial disputes concerning the industries specified
under Section 2 (a) (i) and for the industries carried on by or
under the authority of the Central Government. Excluding these
8 two categories of industries in relation to any other industrial
dispute, it is the State Government which is the 'appropriate
government'.
18. Entry 22 in list Ill - Concurrent List to the Seventh
Schedule to the Constitution of India relates to 'Trade Unions;
C Industrial and Labour disputes'. Entry 23 thereunder is 'social
security and social insurance; employment and unemployment'.
Entry 24 is 'welfare of labour including conditions of work,
provident fund, employer's liability, workmen's compensation,
invalidity and old age pensions and maternity benefits'. Subject
D to the provisions contained in sub-clauses (1) and (2) in Article
246, the Legislature of a State can also make laws on these
subjects, and this is how the MRTU and PULP Act 1971 makes ·
provisions for recognition of trade unions for collective
bargaining, and for prevention of unfair labour practices. It is
E also in the fitness of things that the Industrial Disputes Act which
is the principal Central Act for investigation and settlement of
Industrial Disputes lays down that for the industrial disputes
concerning the specified industries and for those carried on by
or under the authority of the Central Government, the Central
F Government will be the 'appropriate government', but in relation
to any other industrial dispute the State Government will be the
'appropriate government'. It, therefore, becomes necessary to
examine the phrase 'any industry carried on by or under the
authority' of Central Government on this background while
G applying it to a particular industry and in the instant case, to the
first respondent.
19. Explanation of the concept of appropriate
government by the Judiciary:-
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 745
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
The appeal raises the question as to whether the Division A
Bench has correctly applied the law laid down in Steel Authority
of India (supra). The Steel Authority of India judgment however
once again reiterates the law laid down way back in Heavy
Engineering Mazdoor Union vs. The State of Bihar (1969) 3
SCR, 995, though with a little divergence. It therefore becomes B
necessary to examine as to how the concept of appropriate
government has been explained by the judiciary in the leading
decisions. That will enable us to find out as to what are the tests
in this behalf which have evolved over the years. In Heavy
Engineering case, the State of Bihar had referred an industrial c
dispute between the Heavy Engineering Corporation Ltd., a
company wholly owned by the Central Government and its
workmen for its adjudication by the Industrial Tribunal. The
appellant mazdoor union challenged the reference contending
that the 'appropriate government' to refer the dispute was the
0
Central Government and not the State Government. The High
. Court rejected the contention, and hence ~he matter was carried
to this Court. This Court noted that the Heavy Engineering
Corporation is a Government company within the meaning of
Section 617 of the Companies Act, since its entire share capital
E
was contributed by the Central Government and its shares were
registered in the name of the President of India and officers of
the Central Government. The memorandum of association and
the articles of association of the company conferred large
powers on the Central Government including the power to give
directions as regards the functioning of the company. The F
wages and salaries of the employees were also determined
in accordance with these directions. The Directors of the
company were appointed by the President of India. The
Company was described in its standing orders as a
Government Undertaking. G
20. It was accepted by the corporation that it could not be
said to be an 'industry' carried on by the Central Government.
The limited issue was whether it could be regarded as an
H
746 SUPREME COURT REPORTS [2010] 9 S.C.R.
A 'industry', carried on under the authority of the Central
Government. The question was as to how to construe the phrase
'under the authority of Central Government'.
This court held;
B .... There being nothing in s. 2 (a) to the contrary, the
word 'authority' must be construed according to its ordinary
meaning and therefore must mean a legal power given by
one person to another to do an act. A person is said to
be authorized or to have an authority when he is in such a
c position that he can act in a certain manner without
incurring liability, to which he would be exposed but for the
authority, or, so as to produce the same effect as if the
person granting the authority had for himself done the act.
For instance, if A authorizes B to sell certain goods for and
D on his behalf and B does so, incurs no liability for so doing
in respect of such goods and confers good title on the
purchaser. There clearly arises in such a case the
relationship of a principal and an agent. The words "under
the authority of' means pursuant to the authority, such as
E where an agent or a servant acts under or pursuant to the
authority of his principal or master. Can the respondent-
company, therefore, be said to be carrying on its business
pursuant to the authority of the Central Government? That
obviously cannot be said of a company incorporated under
F the Companies Act whose constitution, powers and
functions are provided for and regulated by its
memorandum of association and the articles of
association." (underlining supplied)
21. This Court noted that an incorporated company has a
G separate existence and the law recognizes it as a juristic
person, separate and distinct from its members. Its rights and
obligations are different from those of its shareholders. Action
taken against it does not directly affect its shareholders. The
company so incorporated derives its powers and functions from
H and by virtue of its memorandum of association and its articles
TATA MEMORIAL HOSPITAL WORKERS UNION v. 747
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
of association. The mere fact that the entire share capital of A
the company was contributed by the Central Government and
the fact that all its shares are held by the President and certain
officers of the Central Government does not make any
difference. The court noted that a notice to the President of India
and the officers of the Central Government, who hold between B
them all the shares of the company would not be a notice to
the company nor can a suit maintainable by and in the name
of the company be sustained by or in the name of the President
and the said officers.
22. The Court noted that the extensive powers are
c
conferred on the Central Government including the power to
give directions as to how the company should function, the
power to appoint its Director and even the power to determine
the wages and salaries payable by the company to its
employees but these powers were derived by the company's D
memorandum of association and the articles of association and
not by reason ·of the company being an agent of the Central
Government. The court thereafter observed as follows:
..... The question whether a corporation is an agent E
of the State must depend on the facts of each case.
Where a statute setting up a corporation so provides, such
a corporation can easily be identified as the agent of the
state as in Graham vs. Public Works Commissioners (
[1901] 2 K.B. 781) where Phillimore, J. said that the Crown F
does in certain cases establish with the consent of
Parliament certain officials or bodies who are to be treated
as agents of the Crown even though they have the power
of contracting as principals. In the absence of a statutory
provision, however, a commercial corporation acting on its G
own behalf, even though it is controlled wholly or partially
by a Government department, will be ordinarily presumed
not to be a servant or agent of the State. The fact that a
minister appoints the members or directors of a
corporation and he is entitled to call for information, to H
748 SUPREME COURT REPORTS [2010] 9 S.C.R.
A give directions which are binding on the directors and to
supervise over the conduct of the business of the
corporation does not render the corporation an agent of
the Government. (see The State Trading Corporation of
India Ltd v. The Commercial Tax Officer, Visakhapatnam
B [1964] 4 SCR 99 at 188, and Tamlin v. Hannaford [1950]
1 K.B. 18 at 25, 26. Such an inference that the corporation
is the agent of the Government may be drawn where it is
performing in substance governmental and non commercial
functions. (cf London County Territorial and Auxiliary
c forces Association v. Nichlos) [1948] 2 All E.R. 432.
(underlining supplied)
23. Then the Court looked into the definition of 'employer'
as given in Section 2 (g) of the Industrial Disputes Act. As this
section provides, an employer under clause (g) means, an
D employer in relation to an 'industry' carried on by or under the
authority of any department of the Central Government or the
State Government, the Authority prescribed in that behalf, or
where no such authority is prescribed, the head of the
Department. No such authority was prescribed in regard to the
E business carried on by the respondent company. The Court
observed that the definition of the 'employer' under the Industrial
· Disputes Act on the contrary suggests that an industry carried
on by or under the authority of the Government means either
the industry carried on directly by a department of the
F Government such as the posts and telegraphs or railway, or one
carried on by such department through the instrumentality of an
agent. All these facts led this Court to hold that the Heavy
Engineering Corporation could not be said to be an 'industry'
carried on under the authority of the Central Government.
G
24. We have referred to the Judgment in Heavy
Engineering Mazdoor Union (Supra) extensively for the reason
that it has been followed consistently including the last relevant
judgment of the Constitution Bench in Steel Authority of India
H Ltd. (Supra), though with a slight divergence. The next judgment
TATA MEMORIAL HOSPITAL WORKERS UNION v. 749
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
of significance after Heavy Engineering Mazdoor Sangh, is A
Hindustan Aeronautics Ltd. vs. Workmen reported in (1975)
4 sec 679. In that matter a bench of three judges was
concerned with the dispute between the management of the
Barrackpore branch of the appellant Government Company
situated in West Bengal and its employees. The appellant had B
challenged the Award of the Fifth Industrial Tribunal, West
Bengal and one of the challenges was to the competence of
the Government of West Bengal to make the reference of the
industrial dispute. It was contended that the Barrackpore branch
was under the direct control of the Bangalore Division of the c
Company and since it was a Government Company constituted
under section 617 of the Companies Act, (the shares of which
were entirely owned by the Central Government), the reference
ought to have been made either by the Central Government or
by the Government of Karnataka. This Court negatived the
0
contention. It noted that the Barrackpore Branch was a separate
branch and for the purposes 9f this Act it was an industry
carried on by the Company as a separate unit. This court
followed the dicta in Heavy Engineering Mazdoor Union
(supra) and observed in para 4 as follows:
E
"The workers were receiving their pay packages at
Barrackpore and were under the control of the officers of
the company stationed there. If there was any disturbance
of industrial peace at Barrackpore where a considerable
number of workmen were working the appropriate F
government concerned in the maintenance of the
industrial peace was the West Bengal Government. The
grievances of the workmen of Barrackpore were their own
and the cause of action in relation to the industrial dispute
in question arose there. The reference, therefore, for G
adjudication of such a dispute by the Governor of West
Bengal was good and valid. (underlining supplied)
25. In Rashtriya Mill Mazdoor Sangh, Nagpur vs. Model
Mills, reported in 1984 (Supp) SCC 443, a reference (though
H
750 SUPREME COURT REPORTS [2010] 9 S.C.R.
A under the Bombay Industrial Relations Act, 1946) of the
demands of the employees for payment of bonus was
challenged on the ground that an authorized controller under the
Industries (Development and Regulation) Act, 1951 had been
appointed in respect of the industrial undertaking and since the
B undertaking was being run by an authorized controller under the
authority of a department of the Central Government, the
reference under the Bombay Industrial Relations Act, 1946 was
not competent. A bench of three judges of this Court once again
referred to the interpretation of the expression 'under the
c authority of' rendered in Heavy Engineering Mazdoor Union's
case. The Court noted that in reaching its conclusion in Heavy
Engineering Mazdoor Union's case (supra) this Court had
approved the view of Calcutta High Court in Carlsbad Mineral
Water Mfg. vs. P.K. Sarkar Al R 1952 Calcutta Page 6 wherein
a Division Bench that Court, had held that business which is
0
carried on by or under the authority of the Central Government
must be a Government business. The High Court had further
held that in any industry to be carried on under the authority of
the Central Government it niust be an industry belonging to the
E Central Government, that is to say, its own undertaking. The
Court held in para 17;
"The fact that the authorized controller is appointed by the
Central Government and that he has to work subject to the
directions of the Central Government does not render the
F industrial undertaking an agent of the Central Government
and therefore, could not be said to be an establishment
engaged in an industry carried on by or under the authority
of the Central Government."
G 26. The Judgment in Rashtriya Mill Mazdoor Sangh (supra)
was followed by the Judgment in Food Corporation of India
Workers Union vs. Food Corporation of India reported in
(1985) 2 sec 294. Therein, the Court was concerned with the
Writ Petition filed by the employees seeking the regularization
H of their services under the Contract Labour (Regulation and
TATA MEMORIAL HOSPITAL WORKERS UNION v. 751
. TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
Abolition) Act 1970 (for short the CLRA Act). In that matter, A
inspite of the fact that FCI is a specified industry under Section
2(~) (i) of the Industrial Disputes Act 1947, this Court referred
to the definition of 'appropriate government' under the CLRA
Act 1970. It referred to judgments in Heavy Engineering
Mazdoor Union and Rashtriya'Mill Mazdoor Sangh (supra) with B
approval, and held that for the regional offices and warehouses
which were situated in various states, the State Governments
were the 'appropriate Governments' and not the Central
Government.
27. The scheme of the CLRA Act 1970 came up for C
consideration before a bench of three Judges in Air India
Statutory Corporation vs. United Labour Union (1997) 9 SCC
377. The Court was concerned with the question as to whether
the Central Government was the competent appropriate
government for the purposes of the notification which it had D
issued under that Act to abolish the Contract Labour system in
the establishment of the appellant. The court h&ld that the
Central Government was the appropriate government. The
definition of 'appropriate government' under Section 2 (1) (a)
of that Act was examined by this Court and which reads as E
follows:
"[(a) "appropriate Government" means,-
(i) in relation to an establishment in respect of which
the appropriate Government under the Industrial F
Disputes Act, 1947 (14 of 1947), is the Central
Government, the Central Government. ..
(ii) in relation to any other establishment, the
Government of the State in which that other G
establishment is situated;]
A bench of three Judges, therefore, examined the efficacy of
the judgments starting from Heavy Engineering Mazdoor Union
case (supra). After examining the principles arising out of some H
752 SUPREME COURT REPORTS [2010] 9 S.C.R.
A of the leading judgments on Article 12 of the Constitution of
India, such as those in the case of R.D. Shetty vs. International
Airport Authority of India (1979) 3 SCC 489 and Ajay Hasia
vs. Khalid Muzib Sehravardi (1981) 1 SCC 722 (a Constitution
Bench Judgment), the Court held that corporations and
B companies controlled and held by the State Governments will
be institutions of those states within the meaning of Article 12
of the Constitution. A Priori, in relation to corporations and
companies held and controlled by the Central Government, the
'appropriate government' will be the Central Government. In
c paragraph 28 the court observed : -
"28. From this perspective and on deeper
consideration, we are of the considered view that the two
Judge bench in Heavy Engineering Mazdoor Union case
narrowly interpreted the words 'appropriate government'
D on the common law principles which no longer bear any
relevance when it is tested on the anvil of Article 14.'
28. The question concerning interpretation of the concept
E of 'appropriate government' in Section 2 (1) (a) of the CLRA
Act 1970 and in Section 2 (a) of the Industrial Disputes Act,
1947 was subsequently referred to a Constitution Bench in
Steel Authority of India Ltd. vs. National Union Waterfront
Workers, reported in [(2001) 7 SCC 1]. The Constitution Bench
F examined the relevant provisions and the judgments including
those in the cases of R.D. Shetty and Ajay Hasia (supra). The
question decided by Constitution Bench of this Court in Ajay
Hasia Was with respect to Jammu & Kashmir Regional
Engineering College, Srinagar, which was registered as a
G society under the Jammu & Kashmir Registration of Societies
Act 1898 and wherein it was held to be a State within the
meaning of Article 12 of the Constitution.
29. In para 37 of the judgment in Steel Authority of India
Ltd. (supra), this court held that merely because the government
H companies, corporations and societies are instrumentalities or
TATA MEMORIAL HOSPITAL WORKERS UNION v. 753
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
agencies of the Government, they do not become agents of the A
Central or the State Government for all purposes. The Court
held as follows:
"37. We wish to clear the air that the principle, while
discharging public functions and duties the government 8
companies/corporations/societies which are
instrumentalities or agencies of the Government must be
subjected to the same limitations in the field of public law
- constitutional or administrative law - as the
Government itself, does not lead to the inference that they
become agents of the Centre/State Government for all C
purposes so as to bind such Government for all their acts,
liabilities and obligations under various Central and/or
State Acts or under private law."
30. In para 38, this Court thereafter held as follows: D
"38. From the above discussion, it follows that the
fact of being an instrumentality of a Central/State
Government or being "State" within the meaning of Article
12 of the Constitution cannot be determinative of the E
question as to whether an industry carried on by a
company/corporation or an instrumentality of the
Government is by or under the authority of the Central
Government for the purpose of or within the meaning of the
definition of "appropriate Government" in the CLRA Act.
F
Further, the definition of "establishment" in the CLRA Act
takes in its fold purely private undertakings which cannot
be brought within the meaning of Article 12 of the
Constitution. In such a case, how is "appropriate G
Government" determined for the purposes of the CLRA
Act or the Industrial Disputes Act? In our view, the test
which is determinative is: whether the industry carried on
by the establishment in question is under the authority of
the Central Government. Obviously, there cannot be one H
754 SUPREME COURT REPORTS [2010] 9 S.C.R.
A test for one part of the definition of "establishment" and
another test for another part. Thus, it is clear that the
criterion is whether an undertaking/instrumentality of the
Government is carrying on an industry under the authority
of the Central Government and not whether the
B undertaking is an instrumentality or agency of the
Government for purposes of Article 12 of the Constitution.
be it of the Central Government or the State Government.
(underlining supplied)
31. In para 39, this Court further held as follows:
c
"39. To hold that the Central Government is "the
appropriate Government" in relation to an establishment,
the court must be satisfied that the particular industry in
question is carried on by or under the authority of the
D Central Government. If this aspect is kept in mind it would
be clear that the Central Government will be the
"appropriate Government" under the CLRA Act and the ID ·
Act provided the industry in question is carried on by a
Central Government company/an undertaking under the
E authority of the Central Government. Such an authority may
be conferred, either by a statute or by virtue of the
relationship of principal and agent or delegation of power.
Where the authority, to carry on any industry for or on behalf
of the Central Government, is conferred on the government
F company/any undertaking by the statute under which it is
created, no further question arises. But, if it is not so, the
question that arises is whether there is any conferment of
authority on the government company/any undertaking by
the Central Government to carry on the industry in question.
This is a question of fact and has to be ascertained on the
G
facts and in the circumstances of each case."
32. In the next para 40 the Constitution Bench states that
it shall refer to the cases of this court on this point and thereafter
examines in paragraphs 41 to 44 the earlier referred judgments
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 755
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
in Heavy Engineering Mazdoor Union, Hindustan A
Aeronautics, Rashtirya Mill Mazdoor Sangh and Food
Corporation of India (supra).
33. In paragraph 41 of the judgment, the Constitution Bench
examined the Judgment in Heavy Engineering Mazdoor Union B
case. In Heavy Engineering Mazdoor Union the court had
observed that an inference that the corporation was the agent
of the Government might be drawn where it was performing in
substance governmental and not commercial functions. The
Constitution Bench disagreed with the distinction thus made C
between the Governmental activity and commercial function of
Government Companies. Barring this limited disagreement,
however at the end of para 41 the Constitution Bench observed
that it is evident that the court correctly posed the question
whether the State Government or the Central Government was
the 'appropriate government' and rightly answered it. D
34. In paragraph 42, the Constitution Bench examined the
judgment of Hindustan Aeronautics Ltd. (supra). The
Constitution Bench noted that the judgment in Heavy
Engineering Mazdoor Union case was followed in Hindustan E
Aeronautics and it had taken note of the factor that if there was
any disturbance of industrial peace in Barrackpore, the
'appropriate government' concerned for the maintenance of
internal peace was the West Bengal Government. The court
observed that the factors which weighed with the Court could F
not be said to be irrelevant.
35. In para 43 the Constitution Bench examined the
judgment in Rashtriya Mill Mazdoor Sangh (supra) wherein
although an authorized controller was appointed to replace the
management of the respondent Model Mill, the Rashtriya Mill G
Mazdoor Sangh judgment had held that the undertaking could
not be held to be carried on under the authority of the Central
Government. The Constitution Bench quoted the observations
from the judgment with approval.
H
756 SUPREME COURT REPORTS [2010] 9 S.C.R.
A 36. In para 44 the Constitution Bench referred to the FCI
case (supra). It noted that the FCI judgment had followed the
judgments in Heavy Engineering Mazdoor Union and Rashtriya
Mazdoor Mill Sangh (supra) to hold that the State Government
was the 'appropriate government' pertaining to the regional
B offices and warehouses of the FCI under the CLRA Act. At the
end of this para the Constitution Bench concluded "we find no
illegality either in the approach or in the conclusion arrived
at by the court in these cases." (underlining supplied)
37. In paragraphs 45 and 46, thereafter once again the
C Constitution Bench turned to the judgment in Air India case and
in para 46 it concluded as follows:
"We have held above that in the case of a Central
Government company/undertaking, an instrumentality of the
D Government, carrying on an industry, the criteria to
determine whether the Central Government is the
appropriate Government within the meaning of the CLRA
Act, is that the industry must be carried on by or under the
authority of the Central Government and not that the
E company/undertaking is an instrumentality or an agency of
the Central Government for purposes of Article 12 of the
Constitution; such an authority may be conferred either by
a statute or by virtue of the relationship of principal and
agent or delegation· of power and this fact has to be
ascertained on the facts and in the circumstances of each
F
case. In view of this conclusion, with due respect, we are
unable to agree with the view expressed by the learned
Judges on interpretation of the expression "appropriate
Government" in Air India case." (underlining supplied)
G Submissions on behalf of the Appellant
38. On this background the submission on behalf of the
appellant was that way back since 1966 when the Tata
Memorial Centre (T.M.C.) was constituted into a separate
H society and a public trust, it has all throughout functioned as an
TATA MEMORIAL HOSPITAL WORKERS UNION v. 757
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
independent entity and it could not be considered to be a A
delegate of the Central Government. It was submitted that at
the inception the Tata Memorial Hospital was set up out of the
funds of Sir Dorabji Tata Trust and not of the Central
Government. The Government of India established the Indian
Cancer Research Centre, but that was also under an B
agreement dated 7.10.1953 and in collaboration-with the
trustees of the Sir Dorabji Tata Trust. The Government of India
did give the initial grant and undertook to provide recurring
expenses in respect of the staff and contingencie(:9f the
management but the centre was established on the. land c
belonging to the Sir Dorabji Tata Trust. Later on, the C.entral
Government did take over the Hospital after the Trust decided
to dedicate it to the nation. However, at all material times, part
of the expenses of the Hospital have been met from the funds
generated by the Hospital. After the formation of Respondent 0
No. 1 as a registered society in 1966 also, the internal sources
generate 1/3rcj, (i.e approximately 25 crores out of 75 crores)
of the funds which are utilized for running the Hospital. Thus,
the following factors approved by the Industrial Court and the
learned Single Judge were pressed into service on behalf of E
the appellants,
(i) In its inception the E' "tire share capital and assets
of T.M.C. were not solely owned or contributed by
the Government of India in view of the donation by
Dorabji Trust; F
(ii) T.M.C is not wholly run by the funds of Government
of India. Its internal sources are generating 1/3rd
fund which is utilized for running the hospital.
(iii) Its governing Council has the direct control over the G
activities of T.M.C. The T.M.C is functioning under
its own byelaws which suggest that the deep and
intensive control is by the Governing Council.
(iv) The T.M.C. employees are not the Government H
758 SUPREME COURT REPORTS [2010] 9 S.C.R.
A servants;
39. It was pointed out on behalf of the appellants that Mr.
Muthuswamy the Chief Administrative officer of the first
respondent had admitted in his evidence that there was no
interference from the Central Government in the day-to-day
8
activities of the first respondent and they were looked after by
the Directors of the T.M.C. itself. The labour categories of the
employees were employed either by the Directors or by the
Officers of the council. He. admitted that as far as functioning
and administration was concerned, the first respondent was an
C autonomous body. As laid down in the leading decisions on this
issue from time to time, including the one in Steel Authority of
India (supra) whether the industry is carried on by or under the
authority of the Central Government is to be decided on the
facts of each case. In view of the facts which have come on
D record as above, it was submitted that the judgment of the
Industrial Court could not have been faulted and since it was
on the basis of the facts and circumstances placed ori record,
it was rightly left undisturbed by the learned Single Judge.
E 40. The judgment of the Division Bench was assailed also
for laying emphasis on recital No. 6 of the agreement dated
6.1.1966 between the trustees of Sir Dorabji Tata Trust and
Government of India and not the subsequent clauses of that
agreement. It was pointed out that in recital No. 9 of that
F agreement, it was proposed to amalgamate the two institutions
and to entrust the control and management to the newly created
body under the agreement. It was emphasized that as per
clause 4 of the agreement all subsequent acquisitions shall
vests in the holding trustees and clause 5 provides that the
G Centre shall be under the direct management and control of the
Council to be created.
41. It was submitted that the appellant trade union had
been recognized way-back in the year 1985 under the MRTU
and PULP Act and several proceedings had been initiated by
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 759
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
both the parties under this Act. The first respondent had thus A
in a way accepted that the said act does apply to it and now it
cannot be permitted to contend to the contrary. It was, therefore,
submitted that the Division Bench had erred in ignoring that
once the society was formed and all the activities were
transferred to the society, it could no longer be considered as B
a delegate of the Central Government and that the Division
Bench seriously erred in its understanding of the law laid down
by this Court.
Submissions on behalf of the first respondent
c
42. As against the submissions on behalf of the appellant,
it was submitted on behalf of the first respondent that after the
Hospital was dedicated to the nation, at all material times the
first respondent functioned under the authority of the Central
Government. The Tata Memorial Hospital set up by Sir Dorabji D
Tata Trust was dedicated to the nation and the control thereof
was taken over by the Government of India with effect from
1.4.1957 by virtue of the agreement between the two dated
4.2.1957. After the decree was passed by the City Civil Court
on 27.3.1957 and the scheme was approved, all the properties E
of the Hospital came to be vested in the Government of India.
The Tata Memorial Centre finds ~ '>pecific place in the rules of
allocation of business framed by me President of India and it
is stated to be under the Department of Atomic Energy. In the
treatment of the disease of cancer radiation and Isotopes F
produced by the Bhaba Atomic Resec;irch Centre are required
to be used and they are made available by the Department of
Atomic Energy. Although the society is created to run the
administration of the first respondent, under clause 4 of the
agreement dated 6.1.1966, the properties of the Tata Memorial G
Hospital and Research Centre which were vested in the
Government by decree dated 22.3.1957 continue to be vested
in the Government of India. It is therefore, submitted that the
Division Bench was correct in the view taken by it that the first
respondent society continued to function as the delegate of the H
760 SUPREME COURT REPORTS [2010] 9 S.C.R.
A Central Government.
43. The first respondent and the Division Bench
emphasized the recital No. 6 of the agreement dated 6.1.1966
and the relevant portion of the Decree and the scheme;
B The recital No. 6 reads as follows:-
"6. AND WHEREAS the Trustees of the Sir Dorabji
Tata Trust being desirous of dedicating this Hospital to the
Nation with all its assets including the Cancer Infirmary
c Fund and the Three plots Nos. 107, 108 and 109 of
scheme No. 60, Naigaum Estate, requested the
Government of India to take over the control and
management of the said Hospital with effect from the First
day of April One Thousand Nine Hundred and Fifty Seven
D and the Manage the same at their own expense as from
the said date onwards upon the terms and conditions set
fort~ in the Agreement made on the Fourth Day of February
One Thousand Nine Hundred and Fifty Seven (hereinafter
called the Hospital Agreement)."
E 44. The part of the decree emphasized is as follows:-
AND THIS COURT DOTH FURTHER ORDER that the
properties to be conveyed, transferred and assigned by
the Trustees to the Government of India being the
F immovable properties particularly described in Schedule
B hereto and they are hereby vested in the Government
of India"
The relevant part of the scheme reads thus:-
G "The Trustees of Sir Dorabji Tata Trust shall hand over
to the Government of India and the Government of India
shall take over the control and management of the Tata
Memorial Hospital and shall manage the same at their own
expenses as and from 1st April 1957."
H '
TATA MEMORIAL HOSPITAL WORKERS UNION v. 761
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
45. Tests emerging for determining whether the industry A
is carried on under the authority of the Central Government
or the State Government
Having seen the statutory framework it is clear that when
it comes to an industry governed under the Industrial Disputes 8
Act 1947, to be covered under the MRTU and PULP Act, the
State Government has to be the 'appropriate government' in
relation to any industrial dispute concerning such industry. As
provided in Section 2 (3) of the MRTU and PULP Act, we have
to fall back on the definitions of 'industry' and 'appropriate C
government' under the Industrial Disputes Act 1947. As per the
scheme of Section 2 (a) of the Industrial Disputes Act, for the
industrial disputes concerning the industries specified in sub-
section (i), and for the industries which are carried on by or
under the authority of the Central Government, the Central
Government is the appropriate government. Section 2 (a) (ii) D
provides that 'in relation to any other industrial dispute' the State
Government is the 'appropriate government'. Therefore in an
industrial disputes concerning industries, other than specified
industries it becomes necessary to examine whether the
industry is carried on by or under the authority of the Central E
Government. When it does not fall under either of the two
categories, the State Government will be the appropriate
government.
46. It is also material to note that this exercise is to be done F
basically in the context of an industrial dispute to find out as to
whether in relation to any industrial dispute concerning that
industry, Central Government is the 'appropriate government'
or the State Government is the 'appropriate government'.
Oxford dictionary defines word 'concerning' as 'involving' or G
'about'. The word 'concerning', according to Webster's
Dictionary means 'relating to', 'regarding' or 'respecting'
proximate, intimate and real connection with the establishment.
It is to be noted that the Industrial Dispute Act is an act for
investigation and settlement of industrial disputes and the H
762 SUPREME COURT REPORTS (2010] 9 S.C.R.
A MRTP and PULP Act 1971 is for recognition of trade unions
for facilitating collective bargaining for certain undertakings with
which we are concerned in the present matter, and for
prevention of certain unfair practices amongst other objectives.
This being the position it is to be noted that the examination of
B the issue as to which government is the 'appropriate
government' is to be carried out in this context.
47. As far as an industry 'carried on by the Central
Government' is concerned, there need not be much controversy
C inasmuch as it would mean the industries such as the Railways
or Post and Telegraph, which are carried on departmentally by
the Central Government itself. The difficulty arises while
deciding the industry which is carried on, not by but 'under the
authority of the Central Government'. Now, as has been noted
above, in the Constitution Bench Judgment in Steel Authority
D of India Limited (supra), the approach of the different Benches
in four earlier judgments has been specifically approved and
the view expressed in Air India (supra) has been disagreed with.
The phrase 'under the authority' has been interpreted in Heavy
Engineering (Supra), to mean 'pursuant to the authority' such
E as where an agent or servant acts under authority of his
principal or master. That obviously cannot be said of a
company incorporated under the Companies Act, as laid down
in Heavy Engineering Mazdoor Union case (supra). However,
where a statute setting up a corporation so provides specifically,
F it can easily be identified as an agent of the State. The
Judgment in Heavy Engineering Mazdoor Sangh observed that
the inference that a corporation was an agent of the Government
might also be drawn where it was performing in substance
governmental and non commercial function. The Constitution
G Bench in Steel Authority case (supra) has disagreed with this
view in para 41 of its judgment. Hence, even a corporation
which is carrying on commercial activities can also be an agent
of the state in a given situation. Heavy Engineering Judgment
is otherwise completely approved wherein, it is made clear that
H the fact that a minister appoints the members or directors of
TATA MEMORIAL HOSPITAL WORKERS UNION v. 763
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
a corporation and he is entitled to call for information, to give A
directions regarding functioning which are binding on the
directors and to supervise over the conduct of the business of
the corporation does not render the corporation an agent of the
Government. The fact that entire capital is contributed by the
Central Government and wages and salaries are determined B
by it, was also held to be not relevant.
48. In Hindustan Aeronautics the fact that the industrial
dispute had arisen in West Bengal and that the 'appropriate
government' in the instant case for maintaining industrial peace C
was West Bengal was held to be relevant for the Governor of
West Bengal to refer the dispute for adjudication. In Rashtriya
Mill Mazdoor case the fact that the authorized controller was
appointed by the Central Government to supervise the
undertaking was, held as not making any difference. The fact
that he was to work under the directions of the Central D
Government was held not to render the industrial undertaking
an agent of the Central ·Government.
49. In Food Corporation of India (supra), inspite of the fact
that FCI is a specified industry under Section 2 (i) (a) of the ID E
Act 1947, this Court considered the definition of 'appropriate
government' in CLRA Act 1970, and the State Governments
were held to be the 'appropriate governments' for the regional
offices and the warehouses situated in various states wherein
the demand for regularization of the services under the CLRA F
Act had arisen.
50. The propositions in Steel Authority are to be seen on
this background viz. that merely because the government
companies I corporations and societies are discharging public
functions and duties that does not by itself make them agents G
of the Central or the State Government. The industry or
undertaking has to be carried under the authority of the Central
Government or the State Government. That authority may be
conferred either by a statute or by virtue of a relationship of
principle and agent, or delegation of power. When it comes to H
764 SUPREME COURT REPORTS [2010] 9 S.C.R.
A conferring power by statute, there is not much difficulty.
However, where it is not so, and whether the undertaking is
functioning under authority it is a question of fact. It is to be
decided on the facts and circumstances of each case.
51. Application of these tests to the facts of the present
B
case.
As far as the facts of the present case are concerned, as
can be seen from the submissions of the parties, the
determination of the question as to which Government is the
C appropriate Government for the first respondent -
establishment, will depend upon two issues -
(1) How is the property of the first respondent vested? and
(2) Whether the control and management of the Hospital
D and the Research Centre is independently with the first
respondent?
52. How is the properly of the first respondent vested.
E As can be seen from the facts, which have come on
record, the Tata Memorial Hospital was set up by Sir Dorabji
Tata Trust. It was being maintained out of the funds of the Trust
itself as well as from the grants made over by the Central
Government as well as by the State Government. The Indian
F Cancer Research Centre was set up by the joint collaboration
of Sir Dorabji Tata Trust and the Central Government by an
agreement dated 07 .10.1953. The initial grant for the Center
was given by the Central Government and it was meeting the
expenses of the Centre though it was set up on the land
belonging to the Trust. In 1957 Sir Dorabji Tata Trust decided
G to dedicate to the nation the property on which the Tata
Memorial Centre stands. An agreement was entered in that year
between the trustees and the Central Government. The control
and the management of the hospital was transferred to the
Central Government and a vesting order was passed in the
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 765
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
same year to that effect by the City Civil Court in appropriate A
proceedings. In the year 1966, the Central Government and the
Dorabji Tata Trust entered into an agreement by virtue of which
Tata Memorial Hospital and the Indian Cancer Research Centre
were amalgamated and the first respondent society was
created and the administration and the management of the B
Centre was vested in the Governing Council of the said Society.
The first respondent - Centre was registered as a Society
under the Societies Registration Act, 1860 as well as under the
Bombay Public Trust Act, 1950.
53. The first re~ondent heavily relied upon the test of
c
vesting of the property as the main criterion for ascertaining as
to who controls the first respondent for the purpose of deciding
as to which Government is the Appropriate Government. It was
emphasized that under the agreement of 1957, the Dorabji Tata
Trust handed over the property to the Central Government and D
that vesting had been continued in the agreement of 1966 also.
It is, however, to be noted that as per this very agreement, the
future acquisitions were to vest in the Governing Council of the
Society. Rule - 26 of the Rules and Regulations of the first
respondent - Society provides that all properties and funds of E
the Centre (except the immovable properties as specified) vest
in the council:
"26. Properties and Funds vested in the Council: Except
the existing immovable properties of the Centre and such F
immovable properties as may be vested in the Holding
Trustees, all the other properties of the Centre shall vest
in the Council and more·particularly the following:
(a) recurring and non-recurring grants made by
Government; G
(b) other grants, donations and gifts (periodical or
otherwise), other than those intended to form the corpus
of the property and funds of the Centre or held for the
H
766 SUPREME COURT REPORTS [2010] 9 S.C.R.
A benefit of the Centre by the Holding Trustees.;
(c) the income derived from the immovable properties and
the income of the funds vested in the Holding Trustees and
income of the funds vested in the
B Council and also fees, subscription and other annual
receipts; and
(d) all plant and machinery, equipment and instruments
(whether medical, surgical, laboratory, workshop or of any
c other kind), books and journals, furniture, furnishings and
fixtures belonging to the Centre."
54. However, even when it comes to the immovable
properties, Section - 5 of the Societies Registration Act
provides for deemed vesting of the properties belonging to a
D society into the Governing Body of such society. Section - 5
of the Societies Registration Act reads as follows:
"5.Propetty of society how vested -
E The property, movable or immovable, belonging to
a society registered under this Act, if not vested in trustees,
shall be deemed to be vested, for the time being, in the
governing body of such society, and in all proceedings,
civil and criminal, may be described as the property of the
governing body of such society by their proper title."
·F
55. In this behalf, we must keep in mind, the raison d'etre
of the above referred to Section - 5 that once a trust is
established and a society is registered for the administration
of the trust, the statute contemplates that the society should be
G fully autonomous and that the lack of actual transfer of property
of the trust should not prevent the governing body in its
administration. Law recognizes that it would be proper to
regard that as done which ought to have been done. The
deeming provision creates a fictional vesting in favour of the
H
TATA MEMORIAL HOSPITAL WORKERS UNION v. 767
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
Governing Council and not in favour of the Society or the Trust. A
This is also for the reason that society is not a body corporate
which has also been held by this Court in the Board of Trustees,
Ayurvedic and Unani Tibia College, Delhi Vs. The State of
Delhi and Another [AIR 1962 SC 458] and reiterated in 11/achi
Devi (DJ by L.Rs. and Others Vs. Jain Society, Protection of B
Orphans India and Others [AIR 2003 SC 3397]. Since the
society cannot hold the property in its name, vesting of the
property in the trustees is likely to hinder the administration of
the trust property, particularly, where the trustees themselves
or their legal representatives claim adversely to the trust. It is c
for this reason that the law vests the property belonging to the
society in its Governing Body.
56. The phrase 'property belonging to a person' has two
general meanings (1) ownership, (2) the absolute right of user
(per Martin B in Att. Gen. vs. Oxford & C. Railway Co. 31 L.J. D
(1862) 218 at 227) 'Belonging' connotes either ownership or
absolute right 6f user (Wills J in The Governors of St. Thomas',
St. Bartholomew's, and Bridewell Hospital vs. Hudgell (1901)
1 KB 381. The Centre has an absolute right of user over its
immovable properties which it has been exclusively exercising E
all throughout. Section 5 of the Societies Registration Act clearly
declares that the property belonging to the society, meaning
under its user, if not vested in the trustees shall be deemed to
be vested in the Governing Council of the society. In the present
case, it is nobody's case that the property remains vested in F
the Trustees of the Dorabji Tata Trust. It has been canvassed
on behalf of the first respondent that the property is vested in
the Central Government. However, the Central Government has
never claimed any title to the property adverse to the first
respondent - Tata Memorial Centre. It is true that the property G
dedicated to the Tata Memorial Centre has not been
transferred to the Society by the Central Government. But the
fact is that it is the Governing Council of the first respondent
which has been administering and controlling the day to day
H
768 SUPREME COURT REPORTS [2010] 9 S.C.R.
A affairs of Tata Memorial Centre and its property funds,
employment of its staff and their conditions of service. Hence,
in view of the above referred to factual as well as legal scenario
the first issue will have to be decided that the property dedicated
to the first respondent will be deemed to be vested in the
B Governing Council of the first respondent - Society.
57. Whether the Control and Management of the Hospital
and the Research Centre is independently with the first
respondent.
C As far as the control and management are concerned, it
is clear from the facts referred to above that the Central
Government has the power to appoint four nominees on the
Governing Council of the first respondent. We have already
seen, as held in Heavy Engineering Mazdoor Union Case
D (Supra), mere power to appoint the Directors does not warrant
a conclusion that the particular undertaking is a Central
Government Undertaking. The question is whether the
undertaking is functioning as the agent of the Central
Government. In the instant case, the society was created to
E entrust the control and management of the Hospital and the
Research Centre to the Society. Recital No.9 of the agreement
of the 1966 specifically states as follows:
"(9) AND WHEREAS the Government of India and
the Trustees of the Sir Dorabji Tata Trust are now desirous
F of amalgamating the two institutions and entrusting their
control and management to a society."
58. Consequently, Rule - 3 of the Society, which has been
referred to earlier, also lays down that the administration and
G the management vests in the Governing Council. It is also to
be noted that as per Rules and Regulation Nos.3 and 4 which
have been quoted earlier, the administration and management
of the Centre is vested in the Council which is declared to be
an executive body of the center. As per the foreword to the bye-
H laws of the Tata Memorial Centre -
TATA MEMORIAL HOSPITAL WORKERS UNION v. 769
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
"the final decision on the extent of applicability of A
these rules to all Tata Memorial Centre employees rests
with the Tata Memorial Governing Council. Its decision on
the interpretation of these rules adopted for Tata Memorial
Centre employees will be final".
B
Thus, as per the Rules and Regulations, the entire
administration and management of Tata Memorial Centre
is with the Governing Council.
59. It has clearly come in the evidence of Mr.Muthusamy,
the Chief Administrative Officer of the first respondent that there C
was no interference of the Central Government in the day to day
activities of the first respondent. The decisions were taken by
the directors of the first respondent itself. As can be seen from
the bye-laws of the first respondent, the appointments and the
service conditions were modelled on the pattern of Department D
of Atomic Energy, but the pay, allowances and pension, etc.
are on the pattern of the Mumbai Municipal Corporation, and
which are fixed by the decisions of the Governing Council of
the first respondent. The material and the evidence as referred
to above clearly show that the entrustment of the management E
and control of the Hospital and the Research Centre to the
Society was complete and it has been so functioning thereafter.
60. Besides, as observed in Heavy Engineering Mazdoor
Union Case (supra), if we look to the definition of 'employer'
F
under the Industrial Disputes Act, in a case where an industry
is carried on by or under the authority of the Government, the
employer is defined as the authority prescribed in this behalf
or Head of the Department. In the instant case, no such
authority has been prescribed, nor any head of the department
notified by the Central Government. On the contrary, right from G
the time the society was created, its administration and
management is completely under its Governing Council and it
is functioning independently. No contrary evidence has been
produced. The evidence of Mr. Muthusamy, the Chief
Administrative Officer of the Tata Memorial Centre establishes H
770 SUPREME COURT REPORTS [2010] 9 S.C.R.
A the independent functioning of the first respondent under its
Governing Council. It is the Governing Council which has been
exercising the executive powers of the employer.
61. It was then submitted that mentioning of the Tata
B Memorial Centre in the Rules for Allocation of Business of
Government of India is a pointer to the control of the Central
Government. Insofar as the Rules of business of the
Government of India are concerned, they are for the purpose
of allocation of business between various departments of
Government of India whenever the Government of India has to
C take a decision. As rightly held by a Division Bench of Bombay
High Court in their own case in Tata Memorial Centre Vs.
Sanjay Verma reported in 1997 (75) Tata Memorial Centre
vs. Sanjay Verma reported in 1997 (75) Indian Factories and
Labour Reports Page -4 mere allocation of business under any
D department would not in any manner decide the issue as raised
in the present case as to whether a particular industry is under
the control of the Central Government. The business rules
cannot be conclusive to show that any institution or organization
listed under the allocation of business, would be part of any 1
E department of the Government of India. Besides, as noted in ·
Heavy Engineering Mazdoor Union (supra) even if a Minister
appoints the directors, gives directions, calls information or
supervises business, that will not make the industry an agent
of the Government.
F
62. Hence we have to conclude that even on the test of
control and management of the Hospital and the Centre, they
are functioning independently under the 1st respondent Society.
They cannot be said to be 'under the control', of the Central
G Government. In the circumstances the State Government shall
have to be held as the appropriate government for the 1st
respondent for the purpose of l.D. Act consequently the MRTU
& PULP Act.
63. It is material to note that until the present litigation,
H neither the Central Government nor the Dorabji Tata Trust or
TATA MEMORIAL HOSPITAL WORKERS UNION v. 771
TATA MEMORIAL CENTRE [H.L. GOKHALE, J.]
even the Governing Council of the first respondent ever disputed A
the application of the MRTU and PULP Act to the first
respondent establishment. Prior to the Applications leading to
the present appeal, the respondent - 1 has also filed
Complaints under the MRTU and PULP Act. Neither the
appellant nor the second respondent - rival union ever disputed B
the application of the Act. In fact, the first respondent has in a
way, by its own conduct acquiesced into the application of the
Act, and the appellant - Union has been recognized under the
Act right from 1985.
64. In view of all these factors, it is not possible for us to
c
sustain the judgment of the Division Bench of the Bombay High
Court. The Division Bench has clearly erred in its consideration
of the judgment in the Steel Authority of India Case. The first
respondent cannot be held to be functioning under the authority
of the Central Government. The State Government is therefore D
the appropriate Government for the respondent No. 1 for the
purposes of ID Act and MRTU and PULP. Act. The two
Applications filed by respondent No. 2 will have to be held as
maintainable under MRTU and PULP Act. The order of the
Industrial Court holding them to be maintainable but dismissing E
them on merits is held to be correct. In the circumstances, the
appeal is allowed. The order passed by the Division Bench of
the Bombay High Court is set aside and the order passed by
the Industrial Court as confirmed by the learned Single Judge,
is restored. The Appeal No. 133/2002 filed by the 1st F
Respondent in the High Court shall stand dismissed.
66. Parties will bear their own costs.
N.J. Appeal allowed.
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