Workmen of the Kampli Co-operative Sugar Factory Ltd. Vs. Management of the Kampli Co-operative Sugar Factory Ltd. - Court Judgment

Excerpt:
constitution of india - article 12 - 'authority' : connotation - activity of manufacturing sugar to earn profits for members of society not 'governmental function' - kampli co-operative sugar factory limited, not instrumentality or agency of state to be 'authority' under article 12.; the respondent - society is a pure and simple non-governmental organisation which has been leased out to a private company by the name gangavathi sugars limited... the management of the society at present has nothing to do except to collect the lease money from the lease company. if that be so it is difficult to accept the argument that the respondent is an instrumentality or an agency of the state so as to be an authority within the meaning of article 12 of the constitution..... whatever may be the true meaning of the expression 'governmental function' it cannot be extended to the activity of manufacturing sugar with a view to earn profit for the members of the society.;-- article 226 - order by special officer of society not as instrument of state government but as management - if recognition of union not under statutory provision, no enforceable right in union.; (i) it is not denied that the management of the society has been superseded and a special officer appointed to look after the affairs of the society. accordingly, when the special officer acts in the matter he does so not in his capacity as an instrument of the state government but as the management of the society, the very fact that the special officer happened to be the deputy commissioner of the district does not mean that the capacity in which he has passed the order has changed. the source of power that he exercises is the one vested in the management of the society.... it is manifest that the respondent - society is not amenable to the writ jurisdiction of this court.; (ii) a recognition unless granted in terms of a statutory provision could not create any enforceable right in the union. simply because the union has been recognised by the management for whatever purposes, creates no enforceable legal right in the union unless the recognition has the sanction of a legal provision.... in a case where even an agreement does not exist it is hard to discover the basis for the claim that the recognition has created a right which an order of withdrawal may be said to violate.... the said recognition could be withdrawn by the management itself without the intervention of the evaluation and implementation machinery. - karnataka electricity regulatory commission (procedure for filing appeal before the appellate authority)regulations,2005. regulation 3(4): [d.v.shylendra kumar, j] institution charge - appeal to be accompanied by institution charge authority demanding a sum of rs.838/- as institution charge- challenged as to held, the petitioner is liable to pay 1% institution charge, as it is not a new appeal instituted by the petitioner under the amended statutory provisions, which envisages payment of 1% of the value of the appeal as institution charges. the provisions of regulation 3(4) are not applicable to the present case, particularly when an appeal had already been instituted by the petitioner before the appellate authority under the then existing statutory provisions. impugned demand notice was quashed. - the rule of the society to have the previous approval of the state and the central government and the society was under a deep and, pervasive control of the central government and the state government, all are clearly showed that the society was an agency and instrumentality of the state and therefore an authority within the meaning of article 12 of the constitution. (6) if a department of the government is transferred to the corporation, it would be a strong factor supportive of the inference of the corporation being an instrumentality or agency of government. rudani (1989)iillj324sc a plain reading of the judgment in the above case shows that the same is clearly distinguishable. their lordships in the said case were dealing with a case in which the college being managed and run by the trust was permanently affiliated to the gujarat university under the gujarat university act, 1949. the university teachers and those employed in the affiliated colleges were entitled to the benefit of the pay scales recommended by the university grants commission. besides the institution which was aided by the government was discharging a public function like any other government institution by way of imparting education to students. the aided institutions like government institutions discharge public function by way of imparting education to students. 9. in the instant case the petitioner has not indicated either in the writ petition or orally before me as to what precisely is the governmental function which the respondent-society is discharging. in a welfare society like ours, it is difficult to draw the demarcating line between governmental and non-governmental functions. 1 -bank so as to bring it as an authority within the meaning of article 12 of the constitution'.13. from what has been stated above, it is manifest that the respondent society is not amenable to the writ jurisdiction of this court, and the petitioner must fail on that account itself. any union can ill-afford to lose that status in case it wants to continue efficiently and effectively to serve the cause of the workers for which alone it is recognised. the fact that in response to the show cause notice issued to the petitioner -union, it never questioned the authority of the management to withdraw the recognition also clearly shows that the argument about the lack of competence of the management is only an after-thought.tirath singh thakur, j.1. the petitioner is a registered trade union. it was recognised by the management of the respondent - kampli co-operative sugar factory limited, by an order dated 30th january, 1978 and directed to follow the code of discipline.2. by two letters dated 23rd october 1984 and 23rd november, 1984, the secretary of the respondent-society asked the petitioner-union to supply a list of its membership failing which the recognition of the petitioner was to be cancelled. instead of supplying the list asked for, the petitioner wrote back to say that the matter had been referred to its legal adviser and that the details shall be conveyed after an opinion is received from him. the respondent, thereupon served a show cause notice to the petitioner calling upon him to explain as to why should the union be not derecognised. having invoked no response from the petitioner, another notice was served upon it on the 26th/27th of december, 1984 giving one more opportunity to the petitioner to furnish the list demanded.3. in the meantime, by an order passed by the government of karnataka, the management of the respondent society was superseded and the deputy commissioner, bellary was appointed as a special officer. the special officer by a speaking order passed on 1st/2nd of august, 1985, withdrew the recognition granted to the petitioner on the ground that it had not co-operated in the matter of verification of its membership and therefore it either did not represent any member or represented a very small thereof. it is against this order that present petition has been filed in this court.4. i have heard the learned counsel for parties at length. mr. kaleemulla shariff, learned counsel appearing for respondent argued that no writ can issue against the impugned order as neither was the respondent-society an authority within the meaning of article 12 of the constitution nor has the impugned order of derecognition, any statutory flavour. mr. subba rao, appearing for the petitioner on the other hand contended that the respondent-society was amenable to the writ jurisdiction of this court, as it was discharging a public function which, according to him was sufficient for the purpose.5. there is no gain said that writ of certiorari issues against the orders passed either by the state or a statutory authority or any other authority within the meaning of article 12 of the constitution. the question whether a co-operative society can be an authority under article 12 of the constitution or an agency or instrumentality of the state fell for consideration of their lordships of the supreme court in ajay hasia etc. v. khalid mujib sehravardi and ors : (1981)illj103sc . observed thus :-'the test is whether it is an instrumentality or agency of the government and not as to how it is created. the inquiry has to be not as to how the juristic person is born but why it has been brought into existence. the corporation may be a statutory corporation created by a statute or it may be a government company or a company formed under the companies act or it may be a society registered under the societies registration act or any other similar statute. whatever be its genetical origin, it would be an 'authority' within the meaning of article 12 if it is an instrumentality or agency of the government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. the concept of instrumentality or agency of the government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the government so as to come within the meaning of the expression 'authority' in article 12'.6. the apex court in the above case found that the composition of the regional engineering college society was dominated by the representatives of the central and the state governments. the monies required for the society for running the college were provided by the central government and the government of jammu & kashmir. the rule of the society to have the previous approval of the state and the central government and the society was under a deep and, pervasive control of the central government and the state government, all are clearly showed that the society was an agency and instrumentality of the state and therefore an authority within the meaning of article 12 of the constitution. after a review of the entire case law on the subject, their lordships identified the following tests which ought to be applied while determining the question :-'(1) ......if the entire share capital of the corporation is held by government it would go a long way towards indicating that the corporation is an instrumentality or agency of government; (2) if the financial assistance of the state is so much as to meet almost the entire extent of the corporation, it would afford some indication that the corporation is impregnated with governmental character;(3) if the corporation enjoys a monopoly status which is the state conferred or state protected. it may be a relevant factor to be considered;(4) if the state control over the corporation is deep and pervasive it may also indicate that the corporation is a state agency or instrumentality;(5) if the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or an agency of the government;(6) if a department of the government is transferred to the corporation, it would be a strong factor supportive of the inference of the corporation being an instrumentality or agency of government.'7. the formulation of the aforesaid tests notwithstanding, the apex court pointed out in chander mohan khanna v. the national council of educational research & training and ors : (1992)illj331sc . that the tests judicially evolved for determining the question are only general principles and not at all exhaustive in nature. their lordships observed thus :-'there are only general principles but not exhaustive test to determine whether a body is an instrumentality or agency of the government. even in general principles, there is not cut and dried formula which would provide correct division of bodies into those which are instrumentalities or agencies of the government and those which are not. the powers, functions, finances and control of the government are some of the indicating factors to answer the question whether a body is 'state' or not. each case should be handled with care and caution. where the financial assistance from the state is so much as to meet almost entire expenditure of the institution, or the share capital of the corporation is completely held by the government, it would afford some indication of the body being impregnated with governmental character. it may be a relevant factor if the institution or the corporation enjoys monopoly status which is state conferred or state protected. existence of deep and pervasive state control may afford an indication. if the functions of the institution are of public importance and related to governmental functions, it would also be a relevant factor. these are merely indicative indicia and are by no means conclusive or clinching in any case.'8. does the respondent-society answer any one or more of the tests evolved by the apex court is in any case the question that requires to be determined. the answer, in my opinion, has to be in the negative, not only because the petitioner has laid down no factual basis whatsoever in his petition but also because the averments made go only to show that the respondent society is a pure and simple non governmental organisation which has been leased out to a private company by the name gangavathi sugars limited. the petitioner has admitted that the management of the society at present has nothing to do expect to collect the lease money from the lease company. if that be so it is difficult to accept the argument that the respondent is an instrumentality or an agency of the state so as to be an authority within the meaning of article 12 of the constitution. mr. rao, however, contended that the nature of the functions which the society was discharging were public in character and therefore the society should be treated to be an authority. he in this: connection relied upon the judgment of their lordships of the supreme court in shri. anadi mukta sadguru s.m.v.s.j.m.s. trust v. v.r. rudani : (1989)iillj324sc a plain reading of the judgment in the above case shows that the same is clearly distinguishable. their lordships in the said case were dealing with a case in which the college being managed and run by the trust was permanently affiliated to the gujarat university under the gujarat university act, 1949. the university teachers and those employed in the affiliated colleges were entitled to the benefit of the pay scales recommended by the university grants commission. besides the institution which was aided by the government was discharging a public function like any other government institution by way of imparting education to students. it is in this connection fruitful to refer to the following passage from the said judgment:'if the rights are purely of a private character no mandamus can issue. if the management of the college is purely a private body with no public duty mandamus will not lie. these are two exceptions to mandamus. but once these are absent and when the party has no other equally convenient remedy, mandamus cannot be denied. it has to be appreciated that the appellants-trust was managing the affiliated college to which public money is paid as government aid. public money paid as government aid plays a major role in the control, maintenance and working of educational institutions. the aided institutions like government institutions discharge public function by way of imparting education to students. they are subject to the rules and regulations of the affiliating university. their activities are closely supervised by the university authorities. employment in such institutions, therefore, is not devoid of any public character. (see-the evolving indian administrative law by m.p. jain (1983) p.266). so are the service conditions of the academic staff. when the university takes a decision regarding their pay scales, it will be binding on the management. the service conditions of the academic staff are, therefore, not purely of a private character. it has super-added protection by university decisions creating a legal right-duty relationship between the staff and the management. when there is existence of this relationship, mandamus cannot be refused to the aggrieved party.'it is therefore apparent that the nature of the duties performed by the trust were held to be governmental in character besides there being a close supervision by the university authorities on the affairs of the college. it was on that basis held that employment in such institutions was not devoid of any public character.9. in the instant case the petitioner has not indicated either in the writ petition or orally before me as to what precisely is the governmental function which the respondent-society is discharging. admittedly, the respondent is running a sugar factory which has been now leased out by it to a private company. it is difficult to accept the submission of mr. rao, that manufacturing of sugar by a co-operative society, should be treated to be a governmental function, nothwithstanding the fact that the term 'governmental function' is a vague and indefinite expression as held by their lordships of the supreme court in ramana dayaram shetti's case. their lordships observed thus :-'today the expression 'governmental function' is a vague and indefinite description. in a welfare society like ours, it is difficult to draw the demarcating line between governmental and non-governmental functions. similarly, it is equally difficult to say with precision, which is a function of public importance, and which is not.'whatever may therefore be the true meaning of the expression 'governmental function' it cannot in my opinion be extended to the activity of manufacturing sugar with the view to earn profit for the members of the society.10. mr. rao, next contended that the order in the present case was passed by the special officer and not by the management of the society. he submitted that since the order impugned has been passed by the deputy commissioner in his capacity as the special officer, the same is amenable to writ jurisdiction of this court no matter the society itself is not.11. i do not find any merit even in this submission of mr. rao. it is not denied that the management of the society has been superseded and a special officer appointed to look-after the affairs of the society. accordingly, when the special officer acts in the matter he does so not in his capacity as an instrument of the state government but as the management of the society. the very fact that the special officer happened to be the deputy commissioner of the district does mean that the capacity in which he has passed the order has changed. the source of power that he exercises is the one vested in the management of the society.12) to the same effect is the view taken by a division bench of this court in secretary karnataka industrial co-operative bank ltd v. state of karnataka w.a.no 2368 of 1991 dd23.4.1992 where their lordships while holding the karnataka industrial co-operative bank ltd, to be not an authority under article 12 of the constitution, also took the view that any order passed by a special officer appointed to discharge the functions of the committee cannot be deemed to be an order passed by a government officer. this court observed thus :-'the learned judge proceeded on the basis that the special officer appointed was a government servant acting under the control of the government and the registrar, so appellant no. 1-bank was an authority within the meaning of article 12 of the constitution. the special officer appointed was to discharge the functions of the committee. so, the action taken against respondent no. 3 in question was the action of the committee and not of the special officer and the relief was also sought against appellant no.1 - bank and not against the special officer, merely because a special officer was appointed to discharge the functions of the committee, it did not alter the character of appellant no.1 - bank so as to bring it as an authority within the meaning of article 12 of the constitution'.13. from what has been stated above, it is manifest that the respondent society is not amenable to the writ jurisdiction of this court, and the petitioner must fail on that account itself.14. i may all the same deal with the second limb of the respondent's argument. the submission of the learned counsel that the recognition of a union is not regulated by any statutory provision in the state of karnataka. according to him, grant of recognition of a union does not violate any fundamental statutory or the other legal right of any such union.15. i find considerable merit in this submission. it is not denied that the recognition of the union is not regulated by any statutory provision. it is also not disputed that a union cannot enforce its co-called right recognition against the management by a writ. mr. subba rao, however, urged that the grant of recognition is different from its conciliation. he submitted that even when the union may not be entitled to force the management to grant recognition by the issue of a writ from this court, it has all the same a right to question the withdrawal of the recognition already granted. he has relied upon reserve bank of india employees' association, nagpur v. a.p. aiyer, manager, reserve bank of india, nagpur and anr 1984 llj 1 56.16. a plain reading of the above judgment shows that in the state of maharashtra and madhya pradesh, the recognition or withdrawal of the same is regulated by legislation. all the same the division bench of the bombay high court in the aforesaid judgment accepted the proposition that an association has no fundamental right to be recognised. their lordships observed thus :-'now, it is true, as a general principle that no association has a fundamental right to be recognised. in a given case where absence of recognition renders the right to form an association illusory different considerations are likely to arise. but, this controversy need not detain as in the present case we are concerned only with the case of derecognition. we find it difficult to hold that refusal to grant recognition and withdrawal of the recognition once granted can be placed on the same footing. primary purpose of a trade union is collective bargaining and only recognised unions can properly wield that authority and influence. recognition once obtained by the union becomes its soul and gives it a new vigour as an authorised bargaining agent of the members and indeed raises its status to a new height. any union can ill-afford to lose that status in case it wants to continue efficiently and effectively to serve the cause of the workers for which alone it is recognised. in any case, recognition gives certain privileges and derecognition amounts to their denial, order of derecognition adds insult to the injury in case it is passed as a disciplinary measure and is for alleged commission of offence and/or acts of indiscipline. such an order attaches stigma and is plainly punitive in nature'.17) their lordships following the view expressed by madras high court in tamilnadu electricity board accounts & tamilnadu electricity board v. executive staff union 1980 (ii) llj 246 held that even when there is no statutory provision regulating the grant or withdrawal of recognition, an aggrieved union whose recognition has been withdrawn can approach the high court under article 226 of the constitution.18) contrary to the view taken by the high courts of bombay and madras is the view taken by the kerala high court in m.a. david, v. k.s.e. board 1973 (ii) llj 466 where their lordships held that no statutory or fundamental right was created in favour of a union merely by reason of its recognition by the management. with great respect to the judges of the bombay and madras high courts, i prefer to follow the view taken by the kerala high court in the aforesaid judgment. i say so for two reasons. in first place, the kerala view distinguishes cases where recognition is granted or withdrawn in terms of a legislative provision which is said to be existing in the state of maharashtra and madhya pradesh only. as to what is the legislation which so regulates these recognition is not clear but it was not disputed before me by the learned counsel that separate legal provisions regulate the said issue in the said two states. in the second place a recognition unless granted in terms of a statutory provision could not create any enforceable right in the union, simply because the union has been recognised by the management for whatever purposes, creates no enforceable legal right in the union unless the recognition has the sanction of a legal provision. in any case in the absence of a statutory provision there ought to have been at least an agreement between the management and the union in so far as the recognition of the later is concerned. in a case where even an agreement does not exist it is hard to discover the basis for the claim that the recognition has created a right which an order of withdrawal may be said to violate. i am in respectful agreement with the view taken by the kerala high court in the aforesaid judgment and would gainfully quote the following passage from the same:'recognition of a trade union is, by and large, a matter of agreement between the employer and the union except in maharashtra and madhya pradesh where there has been legislation in this behalf. if recognition cannot be enforced by a writ, recognition cannot be continued also as of right..... in the absence of any statutory rule or at least an agreement, the appellant-union cannot insist that it should be heard before the recognition is withdrawan'.the writ petition is therefore, wholly misconceived when judged even from this angle.19) the only other submission made by mr. scuba rao, was that the special officer, was not competent to have issued the impugned order of de-recognition.20) mr. rao's contention was that the authority who could cancel the recognition was the evaluation and implementation machinery. mr. rao, has not, however, been able to show any legal or statutory sanction behind the so-called machinery, nor has he demonstrated as to how does that machinery arrogated to itself the power to cancel the recognition given to a union by the management. admittedly, the machinery has not been set up under any statutory provision. it is also not disputed that the recognition had been granted by the management of the society and not by the said machinery. if the recognition could be granted by the management, i do not see any reason why for its withdrawal, it has to approach or depend upon the evaluation machinery, in the light of the view i have taken as to the nature of a recognition granted to a union, i am of the opinion that the said recognition could be withdrawn by the management itself without the intervention of the evaluation and implementation machinery. the fact that in response to the show cause notice issued to the petitioner - union, it never questioned the authority of the management to withdraw the recognition also clearly shows that the argument about the lack of competence of the management is only an after-thought.21) in the result, i find no merit in this petition which is dismissed with costs assessed at rs. 1,500/-.