# HINDUSTAN AERONAUTICS LTD v. THE WORKMEN AND ORS

- **Citation:** [1976] 1 S.C.R. 231
- **Court:** Supreme Court of India
- **Decided:** 1976
- **Case number:** Civil Appeal No. 1330 of 1969
- **Bench:** A. Alagir!Swami, P. K. Goswami, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hindustan-aeronautics-ltd-v-the-workmen-and-ors-6490
- **Pages:** 6

## Headnote

Industrial Disputes Act (14 of 1947) s. 2(a)(i)-'Appropriate Government',
Scove of--Direction by Tribunal
to
1nake
certain
en1ployees
perrnanentPropriety,
The (iovernn1ent of West Bengal referred under s. 10(1) of the
Industrial
Disputes Act, 1947, fi\'e :ssnes for adjudication by the Industrial "fribunal.
The
dispute was between the respondents-workmen working
at
the
Barrackpore
branch of the appellant company's workshop. All the shares of the ar;ipellant are
owned bv the Central Government. and its Memorandum and Articles of Association point out the vital role and control of the1Central Government in
the
matter ct carrying on of the industry.
The Tribunal gninted relief with respect to three !.ssues.
In appeal to this Court, the competency of the Government to .1nake
the
reterence was challenged on the ground that the appropriate Government to 1n"-ke
the reference 'vas either the Central Government, because the industry was under
the authority of the Central Government, or the State of Karnataka, since the
works of the Harrackpore branch is under the Bangalore Divisional Office of the
Company.
Rejecting the contention, but aUow!ng the appeal to this Court on merits,
HELD : l (a) The submission regarding the
competency of the
Central
Government is identical to the one made before this Court and reoelled bv this
Court in the case of fjeavy Engineering Mazdoor Union v. The State of Bi/1ar
[1969] 3 S.C.R. 995. [233C]
(b) The fact that· the Government company in the Heavy Engineering Mazdoor Union case was carry:inj?; on an industry where Private Sector. Undertakings
were also operating, ·whereas, in the instant case, the Government alone was entitled to carry on to the exclusion of ?Jrivate operators. would not make .any
difference. [234Bl
(c) The definition of "appropri.ate Government" in s. 2(a) (1) of the-Industrial Disputes Act has been amended from time to time and certain statutory corporations were incorporated in the definition to Ihake the Central Government
'the appropriate CJ-overnment' in relation to the industry r:arried on by them.
But no public co1npany, even if the shares were exclusively owned by the Government, was bi'ought wit~in the definition. [234C]
(2) -As1iuming that the Barrackpore branch was under the control of th,e
Bangalore Division of the Company, it was a se9arate branch
working as
a
separate unit. The workers were receiving their pay at Barrackpore, were under
the control of the officers of the Company stationed there. their grievances :\-Vere
their own and the cause of action in relation to the industrial dispute arose there.
If there was any disturbance Qf industrial peace at Barrackpore, the appropriate
Governn1ent concerned in ~ts maintenance was the West Bengal Government.
[234D-E]
Mis. Lipton Limited and another v. Their employees [1959] 2 Suppl. S.C.R.
150, Jistin,guished.
(3) On the first issue relating to allowance for the education of emplovees'
children the Tribunal directed the appellant to pay Rs. 12/- per month to rnch
en1ployee to n1eet the educati.onal exvenses of his children. This direction is irt
effect a revision of the pay structure of the Barrackpore employees and the Tribunal had no jurisdiction to chang;~ ·th~ wage structure in tQe garb of a1lowing
~dμcatipnal expenses.
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SUPREME COURT REPORTS
[1976] 1 S.C.R.
(4) On the issue regarding revision of lunch allowance, the aw~rd of the 1Lri-
, bunal was unnecessary because all members of the staff were getting such lunch
allowance. [235E-F]
( 5) As regards the d1.rections of the Tribunal that certain canteen employees
shoald be n1ade pern1anent, it was not justified because those
workmen
were
casual workmen appointed temporarily. The workmen-could be made pei:ma~ent
only against permanent vacancie-5 and not otherwise, and there was no d!fect1on
by the Tribunal for the creation of any new post. [235F-H]

## Text

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231
HINDUSTAN AERONAUTICS LTD.
v.
THE WORKMEN AND ORS.
August 4, J 975
(A. ALAGIR!SWAMI, P. K. GOSWAMI AND N. L. UNTWALIA, JJ.J
Industrial Disputes Act (14 of 1947) s. 2(a)(i)-'Appropriate Government',
Scove of--Direction by Tribunal
to
1nake
certain
en1ployees
perrnanentPropriety,
The (iovernn1ent of West Bengal referred under s. 10(1) of the
Industrial
Disputes Act, 1947, fi\'e :ssnes for adjudication by the Industrial "fribunal.
The
dispute was between the respondents-workmen working
at
the
Barrackpore
branch of the appellant company's workshop. All the shares of the ar;ipellant are
owned bv the Central Government. and its Memorandum and Articles of Association point out the vital role and control of the1Central Government in
the
matter ct carrying on of the industry.
The Tribunal gninted relief with respect to three !.ssues.
In appeal to this Court, the competency of the Government to .1nake
the
reterence was challenged on the ground that the appropriate Government to 1n"-ke
the reference 'vas either the Central Government, because the industry was under
the authority of the Central Government, or the State of Karnataka, since the
works of the Harrackpore branch is under the Bangalore Divisional Office of the
Company.
Rejecting the contention, but aUow!ng the appeal to this Court on merits,
HELD : l (a) The submission regarding the
competency of the
Central
Government is identical to the one made before this Court and reoelled bv this
Court in the case of fjeavy Engineering Mazdoor Union v. The State of Bi/1ar
[1969] 3 S.C.R. 995. [233C]
(b) The fact that· the Government company in the Heavy Engineering Mazdoor Union case was carry:inj?; on an industry where Private Sector. Undertakings
were also operating, ·whereas, in the instant case, the Government alone was entitled to carry on to the exclusion of ?Jrivate operators. would not make .any
difference. [234Bl
(c) The definition of "appropri.ate Government" in s. 2(a) (1) of the-Industrial Disputes Act has been amended from time to time and certain statutory corporations were incorporated in the definition to Ihake the Central Government
'the appropriate CJ-overnment' in relation to the industry r:arried on by them.
But no public co1npany, even if the shares were exclusively owned by the Government, was bi'ought wit~in the definition. [234C]
(2) -As1iuming that the Barrackpore branch was under the control of th,e
Bangalore Division of the Company, it was a se9arate branch
working as
a
separate unit. The workers were receiving their pay at Barrackpore, were under
the control of the officers of the Company stationed there. their grievances :\-Vere
their own and the cause of action in relation to the industrial dispute arose there.
If there was any disturbance Qf industrial peace at Barrackpore, the appropriate
Governn1ent concerned in ~ts maintenance was the West Bengal Government.
[234D-E]
Mis. Lipton Limited and another v. Their employees [1959] 2 Suppl. S.C.R.
150, Jistin,guished.
(3) On the first issue relating to allowance for the education of emplovees'
children the Tribunal directed the appellant to pay Rs. 12/- per month to rnch
en1ployee to n1eet the educati.onal exvenses of his children. This direction is irt
effect a revision of the pay structure of the Barrackpore employees and the Tribunal had no jurisdiction to chang;~ ·th~ wage structure in tQe garb of a1lowing
~dμcatipnal expenses.
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232
SUPREME COURT REPORTS
[1976] 1 S.C.R.
(4) On the issue regarding revision of lunch allowance, the aw~rd of the 1Lri-
, bunal was unnecessary because all members of the staff were getting such lunch
allowance. [235E-F]
( 5) As regards the d1.rections of the Tribunal that certain canteen employees
shoald be n1ade pern1anent, it was not justified because those
workmen
were
casual workmen appointed temporarily. The workmen-could be made pei:ma~ent
only against permanent vacancie-5 and not otherwise, and there was no d!fect1on
by the Tribunal for the creation of any new post. [235F-H]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1330 of 1969
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Appeal by special leave from the Award dated the 5th March, 1969
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of the Fifth Industrial Tribunal, West Bengal, in Case No. 26 of 1967.
"°1'
V. S. Desai and R. B. Datar, for the-appellant.
A. K. Sen and Sukumar Ghose, for respondent no. 1.
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The Judgment of the Court was delivered by
UNTWALIA, J.-This is an appeal by special \eave filed by Hindustan
Aeronantics Ltd. from the award dated 8-3-1969 made by the Fifth
Industrial Tribunal, West Bengal.
The Governor of West Bengal made
the reference under section I 0 (1) of the Industrial Disputes
Ad,
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1947- hereinafter called the Act, for adjndication on the following
5 issues :
"( 1) Allowance for the education of employees' children,
(2) House Building loan;
(3) Free conveyance or conveyance allowance;
( 4) Revision ·of Lunch allowance;
(5)Whether the followin~ canteen employees should be
made permanent"-the names of 10 employees given.
The Tribunal granted no relief to the workmen on issues 2 and 3, allowE
ed their claim in part in respect of issues I, 4 and 5.
Feeling aggrievF
ed by the said award the• appellant which is a Government company
constituted under section 617 of the Companies Act, the shares of which
are entirely owned by the Central Government, has filed this appeal.
The dispute relates to about 1,0()0 workmen working at the Barrackpore (West Bengal) branch of the Company's repairing workshop represented by the Hindustan Aeronautics Workers' Union, Barrack-
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The competency of the Government of West Bengal to make the
reference was challenged before the Tribunal as also here.
Mr. V. S.
Desai, learned counsel for the appellant, submitt·~d that the appropriate
government within the meaning of sectiorl 2(a) of the Act competent
to make the referenc:e was the Central Government, or, if a State Government, it was the Government of Karnatak where the Bangalore
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Divisional Office of the Company is situated and under which works
the ]3arrackpore !;>ranch,
Counsel stressed the point that the Central
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HINDUSTAN Ji,ERONAUTICS LTD. v. WORKMEN (Untwa/ia, J.)233
Government owned the entire bundle of shares in the company. It
appoints and removes the Board of Directors as well as the Chairman
and the Managing Director.
All matters of importance are r<'!served for
the decision of the President of India and ultimately
executed in
accordance with
his directions.
The memorandum and articles of
association of the company unmistakeably point out the vital role and
control of the Central Government in the matter of carrying on of the
industry owned by the appellant.
Hence, counsel submitted that the
industrial dispute in question concerned an industry which was carried
on "under the authority of the Central Government" within the meaning of section 2(a) (i) of the Act and the Central Government was the
only appropriate Government to make the reference under section I 0.
The submission so made was identical to the one made before and re·
pelled by this Court in the case of Heavy Engineering Mazdoor Union
v. The State of Bihar & Ors.(') wherein it has been said at page 1,000
.....
"It is true that besides the Central Government having contributed the entire share capita', extensive powers are conferred on it, including the power to give directions as to how the
company should function, the power to appoint directors and
even the power to determine the wages and salaries payable
by the company to its employees. But these
powers
are derived from the company's memorandum of association
and the articles of association and not by reason of the company being the agent of the Central
Govermnent.
The
question whether a corporation is an agent 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 v.
Public Works Commissioners-(1901) 2 K.B. 781 where
Phillimore, J. said that the Crown does in
certain
cases
establish with the consent of Parliament certain officials or
hodies 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 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 give directions
which are
binding on the
directors and to suoervise over the conduct of the busine8'
of the corporation does not rem!er. the corporation an agerlt
of the
Government.
(see The State Trading Corporation
of India Ltd. v. The Commercial Tax Officer. Visakhapatnam )-(1964) 4 S.C:R. 99 at 188 per Shah J. and Tamlin
v. Hannaford-(1950) 1 K.B. 18 at 25, 26. Such ar inference. that the corporation, is the agent of the Govirnment
may be drawn where it is performing in substance governmental and not commercial functions.
(cf. London County
(I) [1969] 3 S.C.R. 99S
234
SUPREME COURT REPORTS
[1976] l s.c.R.
Territorial and Auxiliary Forces Association v. Michale)-
(1948) 2 All. E.R. 432."
Mr. Desai made a futile anld unsubstantial attempt to distinguish
the. case of HcJvy Engineering Mazdoor Union on the ground that
that was the case of a Government company carrying· on an indu'stry
where Private Sector Undertakings were also operating, It was not an
industry, as in the instant case,
which the Government alone was
entitled to carry on to the exclusion of the private operators.
The
distinction so made is of no consequence
and does not affect
the
ratio of the case in the ]east.
We may also add that by amendments
made in the definition
of
"appropriate Government"
in
section
2(a)(i) from time to time certain statu'ory corporations were incorporated in the definition to make the Central Government an appropriate government in relation to the industry
carried
on by them.
But no public company even if the shares were exclusively owned by
'the Government was attempted to be roped in the said definition.
The other leg of the argument to challenge the competency of the
West Bengal Government to make the reference is also fruitless.
It
may be assumeld that the Barrackpore branch was under the control
of the Bangalore division of the company.
Yet it was a separate
branch engaged in an industry of repairs of air crafts or the like at
Barrackpore.
For the purpose of the Act and on the facts of this
case the Barrackpore branch was an industry carried on by the company as a separate unit.
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 govermnent 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 adjudication of such a
dispute by the Governor of West Bengal was good
and valid. The
facts of the case of M/s. Lidxm Limited and another v. Their em-·
ployees(1) cited on behalf of the appellant are clearly distinguishable.
The ratio of that case was presse'd into service in vain on behalf of
the appellant.
The first demand
on behalf of the
workmen as respects
the
education allowance of the children was chiefly based upon the edncational facilities said to be available to the workmen of Bangalore.
On behalf of the management it was pointed out that certain educational facilities were given to the employees living in the township
of Bangalore but not in the city of Bangalore.
The workmen work- .
ing at Barrackpore had also been provided with certain educational
facilities.
We, however, tlo not propose to go into the merits of the
rival contentions. In our opinion the award directing the company
(l) (1959) 2 Supp. S. C. R. 150.
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lll~DUSTAN AERONAUTICS LTD. v. WORKMEN (Untwalia, J.) 235
to pay Rs. 12/- per month to each employee to meet educational expenses of their children irrespective of the number of children
a
particular workman may have is
beyond the scope of the issue referred for adjudication.
The Tribunal while discussing this issue felt
constrained to think that strictly speaking claim
for allowance for
the education of employees' children coultl not form a subject matter
of industrial dispute.
Real!y it was a matter to be taken into consideration at the time of fixing their wages. In substance and in effect
the directions given by the Tribunal is by way of revision of the pay
structure of the Barrackpore employees. No such reference was either
asked for or made.
The Tribunal, therefore, had no jurisdiction to
change the wage structure in the garb of allowing
e\:lucational expenses for the employees' children.
We may add that on behalf of
the appellant it was stated _before us that the latest revised wage structure has taken the matter of education of the employees' children into
consideration, while, Mr. A. K. Sen, appearing for the workmen, did
not accept it to be so.
If necessary and advisable a proper industrial
tlispute may be raised in that regard in future but the award as it
stands cannot be upheld.
Apropos issue no. 4 it was stated on behalf of the appellant that
all staff and not only the supervisory staff were getting Rs. 1.50 as
lunch allowance under circumst~nces similar to the ones under which
the employees bel9nging to the supervisory staff were getting Rs. 1.50
as lunch allowance. The award of the tribunal, therefore, was unnecessary and superfluous in that regard. If that be so, the award may
be a surplusage as it is conceded on behalf of the appellant that under
the existing service contlitions every employee eligible to get a lunch
allowance was getting at the rate of Rs. l.50.
The" 10 workmen souglit to be made permanent under issue no. 5
were casual workmen before 4-1-1967 within the meaning of clause
(b) ( d) of Standing Order I headed "Classification of
workmen''.
They were appointed as temporary workmen within the meaning of
clause (b) (b) of Standing Order J on and
from 4-1-1967.
The
Tribun•al's direction to make them permanent on and from 4.1.1968
treating them as probationers appointed in permanent vacancies was
not justified.
The Tribt1.1al did not go into the question as to whether
more permanent workmen were necessary to be appointed in the canteen over and above the existing permanent strength to justify the .
making of "the 10 workmen as permanent in the c~ateen where they
were working.
No direction of creation of new posts was given. On
the evidence as adduced before the Tribunal and on the basis of the
(l) (1959) 2 Suppl. S.C.R. 150.
236
SUPREME COURT REPORTS
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[1976] 1 S.C.R.
findings recorded by it, it is plain that the 10 workmen or aay of
them could be made permanent only against the permanent vacancies
and not otherwise.
On behalf of the appellant it was stated before us
that all of them have been made permanent against such vaca•acies,
while, on behalf of the workmen the assertion was that none of them
has been made permanent so, far.
The management has no objection
in absorbing the 10 workmen concerned in permanent vacancies, as and
when they occur if any of them has not been already absorbed. The
workmen want nothing more than this.
In the result the •appeal is allowed and substantially the award of
. the Tribunal is set aside but subject to the clarifications and observations nrnde above.
In the circumstances, there will be no order as to
costs.
V.P.S.
Appeal allowed.
L 714Sup·CI/75-2500-3-1-76-GIPF.
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