NASHIK WORKERS UNIONversusHINDUSTAN AERONAUTICS LIMITED

                         [2016) i S.C.R. 973



                   NASHIK WORKERS UNION                                  A
                                 v.
            HINDUSTAN AERONAUTICS LIMITED
               (Civil Appeal Nos. 9332-9333 of2010)
                       FEBRUARY 26, 2016                                 B

       [DIPAK MISRA AND PRAFULLA C. PANT, JJ.]
       Industrial Disputes Act, 1947 - s. 2(a) - Appropriate
government - Complaint under the 1971 Act by the appellant-
Workers Union against the respondent-Company (Hindustan
Aeronautics Limited) for reinstatement of the trainees with continuity
                                                                         c
of services and back wages - Appropriate government to refer the
said dispute - Division Bench of the High Court held that the
appropriate government for the purpose of the 1947 Act is the
Central Government in relation to the Company, thus, the complaints
filed by the Union against the company were not maintainable -           D
Held: Appropriate Government in relation to the respondent
Company is the State Government - Matter remitted to the High
Court for fresh adjudication on merits - Maharashtra Recognition
of Trade Unions and Prevention of Unfair Labour Practices Act.
1971.
                                                                         E
       Allowing the appeals, the Court
       HELD: 1.1 **HAL 2 has not taken note of earlier decision
in *HAL 1. It has been clearly held in HAL 1 that re2ard bein2
had to the dictionary clause of the ID Act for the purpose of
Hindustan Aeronautics Limited, it is the State Government which
                                                                         F
has to make the reference. In HAL 2 the Court has referred to
decision in ***SAIL's case and opined that it is undisputed that
Hindustan Aeronautics Limited is an undertaking of the Central
Government and it is the Central Government which exercises
full control over the same and, therefore, the appropriate
Government is the Central Government. This analysis runs                 G
counter to HAL 1 and as well the ratio of the decision in SAIL 's
case. On the contrary there is no discussion either on the facts
or the law. It has been opined that the facts are "undisputed". In
HAL 1, the three-Judge Bench had referred to the decision in
Heavy Engineering Mazdoor Union. As has been held in Tata
                                                                         H
                                 973
974                 SUPREME COURT REPORTS                 [2016] I S.C.R.


A Memorial Hospital Workers Union case, the authority in Heavy
  En1:ineerin1: Mazdoor" Union has been approved in SAIL with some
  divergence. The authority in SA/L's case, as the conclusion would
  show, covers two situations-the unamended provision and the
  amended provision. It does not disturb the principles stated in
  HAL 1. Thus, two aspects, first, the HAL 2 does not take note of
B
  HAL 1 and second, it proceeds on the basis of undisputed facts
  which are not stated. It is to be noted that there is nothing in the
  order in HAL 2 to suggest that Hindustan Aeronautics Limited is
  an agent of the Central Government. As HAL 2 did not notice
  HAL 1 which was approved in SA/L's case, it cannot be considered
c as a binding precedent. Therefore, HAL 1 still holds good and
  lays down the correct law and is binding as its foundation flows
  from Heavy Engineering Mazdoor U11io11 which was approved in
  SAIL with some divergence. The divergence really does not affect
  the approval. HAL 2 cannot be regarded as a binding precedent.
  Thus, it is clear that the Division Bench of the High Court did
D
  not apply the ratio in SAIL 's case correctly and, thus, the entire
  anlaysis has to be held to be fallacious. [Para 26][992-A-H)
             1.2 It is perceptible that the High Court has not adverted
      to the merits of the case and dismissed L.P.A. of 2002 on the
      ground that it did not survive aJter dismissal of L.P.A. of 2006.
 E    As the order passed in L.P.A. of 2006 is set aside and opined
      that the "appropriate Government" in relation to the respondent
      company is the State Government, the matter is remitted to the
      High Court for fresh adjudication on merits. The impugned order
      is set aside [Para 27, 28)(993-A-C-)
 F          *Hindustan Aeronautics Limited v. Workmen and others
            (HAL I) (1975) 4 sec 679: 1976 (1) SCR 231 -
            affirmed.
            **Hindustan Aeronautics Limited and Another v.
            Hindustan Aeronautical Canteen Kamgar Sangh &
 G          Others (HAL 2) (2007) 15 SCC 51 - Not a binding
            precedent.
            ***Steel Authority of India and others v. National Union
            Waterfront Workers and others (2001) 7 SCC 1:2001
            (2) Suppl. SCR 343; Heavy Engineering Mazdoor
H
NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                        975
                   LIMITED

     Union v. The State of Bihar & ors (1969) 1 SCC 765:             A
     1970 (1) SCR 995; Food Corpn. of India v. Transport
     & Dock Workers Union (1999) 7 SCC 59; Ramana
     Dayaram Shelly v. International Airport of India &
     others (1979) 3 SCC 489:1979 (3) SCR 1014;
     Managing Director, UP Warehousing Corpn. v. Vijay
                                                                     B
     Narayan Vajpayee (1980) 3 SCC 459:1980 (2) SCR
     773; Rashtriya Mill Mazdoor Sangh v. Model Mills 1984
     Supp. SCC 443: 1985 SCR 751; Food C01pn. of India
     Workers' Union v. Food Corpn .. of India & others (1985)
     2 SCC 294: 1985 (3) SCR 150; Air India Statutory
     Corpn. & others v. United Labour Union and others               c
     (1997) 9 SCC 377:1996 (9) Suppl. SCR 579; Tata
     Memorial Hospital Workers Union v. Tata Memorial
     Centre and another (2010) 8 SCC 480:2010 (9)
      SCR 723 - referred to.
                      Case Law Reference                             D
2001 (2) Suppl. SCR 343             Referred to.      Paras
1970 (1) SCR 995                    Referred to.      Para8
(1999) 1 sec 59                     Referred to.      Para 11
1979 (3) SCR 1014                   Referred to.      Para 14        E
1980 (2) SCR 773                    Referred to.      Para 14
1985 SCR 751                        Referred to.      Para 17
1985 (3) SCR 150                    Referred to.      Para 17
1996 (9) Suppl. SCR 579             Referred to.      Para 17        F

2010 (9) SCR 723                    Referred to.      Para 22
1976 (1) SCR 231                    Affirmed.         Para 26
{2901i 1s sec s1        Not a binding precedent.      Para 26
                                                                     G
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 9332-
9333 of2010
      From the Judgment and Order dated 25.06.2009 of the Division
Bench of the Bombay High Court in LPA No. 144 of2002 and LPA No.
84 of2006 in Writ Petition No. 3562of1997
                                                                     H
976                  SUPREME COLRT REPORTS                   [2016] I S.C.R.


A           Colin Gonsalves, Kamlesh Kumar Mishra, Jyoti Mendiratta for
      the Appellant.
           S. Guru Krishna Kumar, Dhananjay Baijal, N. Sai Vinod, Nikhil
      Nayyar for the Respondent.
            The Judgment of the Court was delivered by
B
             DIPAK MISRA, J. I .The present appeals are directed against
      the judgment and order dated 25.06.2009 passed by the High Court of
      Judicature at Bombay in Letters Patent Appeal No. 84 of2006 whereby
      the Division Bench has invalidated the order of the learned single Judge
      rendered in Writ Petition No. 3562of1997 expressing the view that the
 C    State Government is the appropriate Government in relation to the
      respondent-Company for the purpose of the Maharashtra Recognition .
      of Trade Unions and Prevention of Unfair Labour Practices Act, 1971
      (for short, "the 1971 Act'').
              2. The facts which are essential to be stated for adjudication of
D     these appeals are that the appellant, Nashik Workers Union, filed a
      complaint under the 1971 Act being Complaint (ULP) No. 35 of 1990
      for reinstatement of the trainees with continuity of services and back
      wages. During the pendency of the first complaint, as further employees
      were relieved, another complaint being Complaint (ULP) No. 36of1990
 E    was filed. With the passage of time, two other complaints forming the
      subject matter of Complaint (ULP) Nos. 44of1990 and 45of1990 also
      came to be registered before the Presiding Officer-Judge, Labour Court,
      Nasik. The Labour Court appreciated the material brought on record,
      declared that the employer had engaged in unfair labour practices in
      terminating the services of the employees and, accordingly, directed for
 F    reinstatement of the employees with continuity of service and full back
      wages from the date of termination till reinstatement. The said order
      was to be complied with within one month from the date of the order,
      that is, 08.08.1994.
             3. The aforesaid order passed by the Labour Court came to be
 G    assailed in Revision Application (ULP) Nos. 140 of 1994 and 28-30 of
      1995 before the Industrial Court. The Industrial Court, Maharashtra at
      Thane affirmed the order passed by the Labour Court and dismissed the
      revision applications vide order dated 81' July, 1997.
            4. The orders passed by the Labour Court and Industrial Court
 H    were assailed in Writ Petition No. 3562of1997 wherein a contention
    NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                              977
               LIMITED [DIPAK MISRA, J.]

was raised that the "appropriate Government" in respect of the dispute         A
was the Central Government and not the State Government and, therefore,
the I 971 Act would not apply and consequently, the complaints filed by
the workers' union deserved to be dismissed. The learned single Judge
appreciating the materials brought on record allowed the Writ Petition
and directed the employer to make an offer to some trainees as and
                                                                               B
when regular vacancies arise for consideration and in the event they
fulfill the required qualification then io consider them for regular job.
       5. The aforesaid order was challenged by the employer by
preferring an intra-court appeal. Though the learned single Judge had
set aside the orders passed by the Labour Court as Well as of the Industrial
Court, yet he had not accepted the contention of the employer that in
                                                                               c
relation to it the appropriate Government is the Central Government
and, therefore, complaint under the I 971 Act was not maintainable. It
was contended by the appellant before the Division Bench that the Central
Government is the appropriate Government in relation to the employer
company and not the State Government and to bolster the said submission        D
reliance was placed on Steel Authority ofIndia and others v. Nationul
Union Wate~front Workers und others' and also on Hindustan
Aeronautics Limited & another v. Hindustan Aeronautical Canteen
Kamgar Sangh & others', (HAL 2). That apart, inspiration was also
drawn from the order passed in Civil Appeal No. 5655 of 2008 dated
                                                                               E
04.12.2008.
        6. The Division Bench relying on the aforesaid decisions opined
that the appropriate Government for the purpose of the Industrial Disputes
Act, 1947 (for short, "the ID Act") is the Central Government which is
the appropriate Government in relation to the company and, accordingly,
the complaints filed by the Union against the company were not                 F
maintainable. Being of this view, it allowed Appeal No. 84 of2006 and
set aside the finding recorded by the learned single Judge. Be it noted,
as the High Court arrived at the said conclusion in Appeal No. 84 of
2006, it opined that the other appeal being Appeal No. 144 of2002 did
not merit any consideration. The aforesaid order is the subject matter of      G
scrutiny in these appeals.



1
    (2001) 1sec1
2
    (2007) 15 sec 51                                                           H
978                  SUPREME COURT REPORTS                  (2016] 1 S.C.R.



A            7. We have heard Mr. Colin Gonsalves, learned senior counsel
      for the appellant and Mr. S. Guru Krishna Kumar, learned senior counsel
      for the respondent.
           8. At the very outset, we think it pertinent to state that as the
   Division Bench has not dwelt on the merits of the case and only decided
 B the appeal on the ground of maintainability of the complaints, we shall
   confine our address to the said facet only. The issue of appropriate
   Government in relation to the respondent-company has a history which
   compels us to travel in a time machine. Four decades back, Hindustm1
   Aeronautics Limited v. Workmen and other~·', (HAL 1), as the facts
   would reveal, the Government of West Bengal had made a reference
 c under Section I 0( I) of the ID Act for adjudication of certain issues
   between the employees and the employer. The tribunal had granted partial
   relief to the workmen. Feeling grieved by the said award, the employer
   had preferred an appeal by special leave before this Court. The
   competence of the Government of West Bengal to make the reference
 D which was challenged before the tribunal was also assailed before this
   Court. It was contended that as the Central Government owns the entire
   bundle of shares in the company and appoints and removes the Board of
   Directors as well as the Chairman and the Managing Director and further
   all matters of importance are reserved for the decision of the President
   of India and ultimately executed in accordance with his directions, it is
 E
   unmistakably clear that that the company is in control of the Central
   Government in the matter of carrying on the industry owned by the
   company. In that backdrop it was urged that 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 ID
 F Act and hence, the Central Government was the only appropriate
    Government to make the reference under Section I 0 of the said Act.
    The three-Judge Bench took note of the fact that an identical submission
    was advanced in Heavy Engineering Mazdoor Union v. Tfte St"te of
    Bilwr & ors' which was repelled by this Court. Be it noted, the three-
    Judge Bench in HAL I reproduced a passage from He"vy Engineering
 G Mazdoor Union (supra) which is to the following effect:-




      '(l975)4SCC679
 H    ' (1969) 1sec765
NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                                       979
           LIMITED [DJPAK MISRA, J.]

      "It is true that besides the Central Government having contributed            A
      the entire share capital, 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
                                                                                    B
      memorandum of association and the articles of association and
      not by reason of the company being the agent of the Central
      Government. 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                c
       Works Commissioners' where Phillimore, J. said that the Crown
      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 statutory provision, however, a
                                                                                    D
       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 supervise over the conduct         E
       of the business of the corporation does not render the corporation
       an agent of the Government, (see State Trading Corporation
       of India Ltd. v. Commercial Tax Officer, Visakhapa111am' and
       Tamlin v. Hannaford-). Such an inference that the corporation
        is the agent of the Government may be drawn where it is
                                                                                    F
       performing in substance governmental and not commercial
       functions. (cf. Lo11do11 Counly Terri/orial and Auxiliaiy Forces
       Association v. Nichols·')."
      9. An effort was made to distinguish the said judgment on the
ground that the case of He(/vy Engineering M(/zdoor Union (supra)
                                                                                    G


'(1901)2KB781 :70LJKB860:17TLR540
'(1964)4SCR99.188:AIR 1963SC 1811 PerShah.J.
' ( 1950) I KB 18, 25. 26
' ( 1948) 2 All ER 432                                                              H
980                  SUPREME C'OURT REPORTS                   [2016] I S.C.R.


A     was such a case where the Government company was carrying on an
      industry where private sector undertakings were also operatin·g and,
      therefore, it was not an industry which the Government alone was entitled
      to carry on to the exclusion of the private operators. The Court opined
      that the distinction so made was of no consequence and did not affect
      the ratio of the earlier decision. The Court further proceeded to state
B
      that though Section 2(a)(i) of the ID Act has been amended from time to
      time to incorporate certain statutory corporations to make the Central
      Government an appropriate Government in relation to the industry carried
      on by them, but no public company even ifthe shares were exclusively
      owned by the Government was attempted to be roped in the said
c     definitions. Be it noted that the other Iimb of argument to challenge the
      competence of the West Bengal Government was that the dispute arose
      at Barrackpore branch which was under the control of the Bangalore
      division of the company. The said submission was not accepted. We
      are really not concerned with the second aspect of the case. As is
      demonstrable, the three-Judge Bench ruled that in relation to Hindustan
 0
      Aeronautics Limited, the State Government is the appropriate
      Government.
              10. From the aforesaid analysis made by the Court in the said
      case, as we notice the Court has been guided by the principles stated in
      Heavy Engineering Mazdoor Union (supra) and the provision
 E    contained in Section 2(a)(i) of the ID Act which though had incorporated
      certain definitions to make the Central Government the "appropriate
      Government" in relation to the industry carried on by them, but no public
      company even ifthe shares were exclusively owned by the Government
      was attempted to be brought within the ambit and sweep of that said
 F    definitions.
             11. In the instant case, it is perceivable that the Division Bench
      has dislodged the finding of the learned single Judge on the basis of the
      decision of the Constitution Bench in SA/L's case. One of the reasons
      the matter was placed before the Constitution Bench was that a two-
 G    Judge Bench in Food Corpn. of India v. Transport & Dock Workers
      Union' had noticed the conflict of opinion between different Benches
      including two three-Judge Benches of the Court on the interpretation of
      the expression "appropriate Government'" in Section 2(1 )(a) of the


 H    '(1999) 1sec59
  NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                                981
             LIMITED [DIPAK MISRA, J.]

  Contract Labour (Regulation and Abolition)Act, 1970 (for short, ''.CLRA      A
  Act") and in Section 2(a) of the ID Act. The larger Bench had posed
  three issues for determination and one of them was - "what is the true
  and correct import of the expression "appropriate Government" as defined
  in clause (a) of sub-section (1) of Section 2 of the CLRAAct?" Adverting
  to the said point, the learned Solicitor General had conceded that the
                                                                               B
  State Government is the appropriate Government in respect of the
  establishment of the Central Government companies in question. The
  counter stand was that in view of the amended definition of the
  "appropriate Government" in the CLRAAct with effect from 28.01.1986,
  the Central Government would be the "appropriate Government''. It was
  contended by the Food Corporation of India that the "appropriate             c
. Government" before and after the notification issued by the Central
  Government on 28.01.1986, was the Central Government.
      12.The Constitution Bench referred to sub-section (I) of Section
2 of CLRA Act, which reads as follows:-
       "2. (1) In this Act, unless the context otherwise requires,-            D

       (a) 'appropriate Government' means-
               (i) in relation to an establishment in respect of which the
       appropriate Government under the Industrial Disputes Act, 194 7
       (14of1947), is the Central Government, the Central Government;          E
                (ii) in relation to any other establishment, the Government
       of the State in which that other establishment is situate;"
      The Court also took note of the unamended definition of
"appropriate Government" contained in Section 2( 1)(a). The said
unamended provision reads as under:-                                           F
       "2. (1 )(a) 'appropriate Government' means-
       (1) in relation to-
                 (i) any establishment pertaining to any industry carried
       on by or under the authority of the Central Government, or pertaining   G
       to any such controlled industry as may be specified in this behalf
       by the Central Government, or
                (ii) any establishment of any railway, cantonment board,
       major port, mine or oilfield, or
                                                                               H
982                     SUPRE~E COURT REPORTS                     [2016] I S.C.R.


A             (iii) any establishment of a banking or insurance company, the
      Central Government,
             (2) in relation to any other establishment, the Government of the
      State in which that other establishment is situated:"
               13. Referring to the unamended provision, it has been observed
B     thus:-
               "A plain reading of the unamended definition shows that the Central
               Government will be the appropriate Government if the
               establishment in question answers the description given in sub-
               clauses (i) to (iii). And in relation to any other establishment, the
 c             Government of the State, in which the establishment in question is
               situated, will be the appropriate Government. So faras sub-clauses
               (ii) and (iii) are concerned, they present no difficulty. The
               discussion has centred round sub-clause (i). It may be seen that
               sub-clause (i) has two limbs. The first limb takes in an
 D             establishment pe1taining to any i11du.111:v carried 011 by or under
               the authority of the Central Government and the second limb
               embraces such controlled industries as may be specified in that
               behalf by the Central Government."
             14. After so stating, the Court referred to the authorities in
 E    Rama11a Dayaram Sltetty v. /11/ernatio11al Airport of India &
      others'° and M"11"gi11g Director, U.P. Wareltousi11g Corp11. v. Vtjay
      Narayan V"jp"yee" and many others and opined thus:-
               "37. We wish to clear the air that the principle, while discharging
               public functions and duties the government companies/
               corporations/societies which are instrumentalities or agencies of
 F
               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 purposes
               so as to bind such Government for all their acts, liabilities and
 G             obligations under various Central and/or State Acts or under private
                law.



      '' (197913 sec 489
 H    " tl980l 3 sec 459
NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                                  983
           LIMITED [DIPAK MISRA, J.)

     38. From the above discussion, it follows thatthe fact of being an        A
     instrumentality of a Central/State Government or being "State"
     within the meaning of Article 12 of the Constitution cannot be
     determinative of the 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
                                                                               B
     purpose of or within the meaning of the definition of"appropriate
     Government" in the CLRA Act. Take the case of a State
     Government corporation/company/undertaking set up and owned
     by the State Government which is an instrumentality or agency of
     the State Government and is engaged in carrying on an industry,
     can it be assumed that the industry is carried on under the authority     c
     of the Central Government, and in relation to any industrial dispute
     concerning the industry, can it be said that the appropriate
     Government is the Central Government? We think the answer
     must be in the negative .... "
Andagain:-                                                                     D
     "There cannot be any dispute that all the Central Government
     companies with which we are dealing here are not and cannot be
     equated to the Central Government though they may be "State"
     within the meaning of Article 12 of the Constitution. We have
     held above that being the instrumentality or agency of the Central        E
     Government would not by itself amount to having the authority of
     the Central Government to carry on that particular industry.
     Therefore, it will be incorrect to say that in relation to any
     establishment of a Central Government company/undertaking, the
     appropriate Government will be the Central Government. To hold
     that the Central Government is "the appropriate Government" in            F
     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 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                G
     industry in question is carried on by a Central Government
     company/an undertaking under the authoritv 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
                                                                               H
984                  SUPREME COURT REPORTS                    (2016] I S.C.R.


A           for or on behalf of the Central Government, is conferred on the
            government 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
B
            of fact and has to be ascertained on the facts and in the
            circumstances of each case."
                                                         (Emphasis supplied]
             15. After so stating, the Court adverted to the amended definition
c     of"appropriate Government" which bears the same meaning as given in
      clause (a) of Section 2 of the ID Act. After referring to the decision in
      the amended provision, it was noted that it is evident that the phrase
      "any industry carried on by or under the authority of the Central
      Government" is a common factor in both the unamended as well as the.
      amended definition. While adverting to the various aspects, the larger
D     Bench referred to the decision in Heavy E11gineeri11g Mazdoor Union
      (supra) and in that context, after appreciating the reasons in the said
      decision, it has observed thus:-
            " ... A two-Judge Bench of this Court elaborately dealt with the
            question of appropriate Government and concluded that the mere
 E          fact that the entire share capital was contributed by the Central
            Government and the fact that all its shares were held by the
            President oflndia and certain officers of the Central Government,
            would not make any difference. It was held that in the absence of
            a statutory provision, a commercial corporation acting on its own
 F          behalf, even though it was controlled, wholly or partially, by a
            government department would be ordinarily presumed not to be a
            servant or agent of the State. It was, however, clarified 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. It must be mentioned here that in
 G          the light of the judgments of this Court, referred to above, it is
            difficult to agree with the distinction between a governmental
            activity and commercial function of government companies set
            up and owned by the Government, insofar as their function in the
            realm of public law is concerned .... "
 H
NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                                  985
           LIMITED [DIPAK MISRA, J.]

       16. After referring to the said decision, the Court adverted to the     A
decision in HAL 1 and opined thus:-
       " ... Having regard to the definitions of the terms "appropriate
       Government" and "establishment" in Section 2 of the CLRAAct,
       it cannot be said that the factors which weighed with the Court
       were irrelevant. It was also pointed out therein that from time to      B
       time certain statutory corporations were included in the definition
       but no public company of which the shares were exclusively owned
       by the Government, was roped in the definition. What we have
       expressed above about Hemy Engg. Case (supra) will equally
       apply here."
                                                                               c
        17. Be it noted, the Court referred to the authorities in Rashtriya
Mill Mazdoor Sangh v. Model Mills" and Food Corpn. of India
Workers' Union v. Food Corpn. of India & others" and proceeded
to state what has been stated in Air lndia Stmutory Corpn. & others v.
United Labour Union and others", that is, from the inception of the
CLRA Act, the "appropriate Government" was the Central Government              D
and thereafter, opined that:-
     . "We have held above that in the case of a Central Government
       company/undertaking, an instrumentality of the Government,
       carrying on an industry, the criteria to determine whether the
       Central Government is the appropriate Government within the             E
       meaning of the CLRAAct, is that the industry must be carried on
       by or under the authority of the Central Government and not that
       the 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    F
       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 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 (supra}. Point (i) is answered            G
       accordingly."

             sec 443
12 .I.984 Supp.


" <1985) 2 sec 294
" <1997) 9 sec 377                                                             H
986                  SUPREME COURT REPORTS                    [2016] I S.C.R.


A             18. While summing up the conclusions in respect of the aforesaid
      facet, it has been ruled as follows:-
            "( I )(a) Before 28-1-1986, the determination of the question
            whether the Central Government or the State Government is the
            appropriate Government in relation to an establishment, will
 B          depend, in view of the definition of the expression "appropriate
            Government" as stood in the CLRAAct, on the answer to a further
            question, is the industry under consideration carried on by or under
            the authority of the Central Government or does it pertain to any
            specified controlled industry, or the establishment of any railway,
            cantonment board, major port, mine or oilfield or the establishment
 c          of banking or insurance company? If the answer is in the
            affirmative, the Central Government will be the appropriate
            Government; otherwise in relation to any other establishment the
            Government of the State in which the establishment was situated,
            would be the appropriate Government;
 D          (b) After the said date in view of the new definition of that
            expression, the answer to the question referred to above, has to
            be found in clause (a) ofSection 2 of the Industrial Disputes Act;
            if (i) the Central Government company/undertaking concerned or
            any undertaking concerned is included therein eo nomine, or (ii)
 E          any industry is carried on (a) by or under the authority of the
            Central Government, or (b) by a railway company; or (c) by a
            specified controlled industry, then the Central Government will be
            the appropriate Government; otherwise in relation to any other
            establishment, the Government of the State in which that other
            establishment is situated, will be the appropriate Government."
 F
             19. Relying on the aforesaid deliberations, it is submitted by Mr.
      Gonsalves, learned senior counsel for the appellant that as far as the
      respondent company is concerned, factually it is not carried on by the
      Central Government nor it is authorized on behalf of the Central
      Government to run the industry and the said reasoning, has neither been
 G    over-turned nor altered by the Constitution bench. On the contrary, it is
      urged by Mr. Gonsalves that the view expressed in HAL 1 (supra) has
      been affirmed by the Constitution Bench. It is propounded by him that
      the amended provision does not change the nature and character of
      Hindustan Aeronautics Limited as the definition does not take within its
 H    ambit and sweep such a corporation.
 NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                               987
            LIMITED [DIPAK MISRA, J.]

        20. Learned counsel for the respondent has drawn inspiration from    A
tl)e authority in HAL 2 (supra). In the said case it has been held thus:-
      'The question that arises for consideration in this case is, whether
      the High Court was justified in holding that the State Government
      is the "appropriate Government" under the provisions of the
      relevant Act. The Constitution Bench recently has considered the       B
      relevant provisions of the Contract Labour Regulation Act in SAIL
      v. National Union Waterfront Workers (supra) and has come to
      the conclusion that the "appropriate government" will be the
      government which exercises control and authority over the
      organisation concerned. It is undisputed that Hindustan Aeronautics
      Ltd. is an undertaking of the Central Government and it is the
                                                                             c
      Central Government which exercises full control over the same.
      Issuance oflicence by the State Government is no criteria to come
      to a conclusion that the State Government would be the
      "appropriate government". The impugned judgment of the High
       Court therefore is, on the face of it, erroneous in view of the       D
      Constitution Bench decision of this Court referred to earlier. We,
      therefore, set aside the impugned judgment of the High Court and
       hold that the Central Government is the "appropriate
       governn1ent"."
        21. As we find, the aforesaid decision arrives at the conclusion     E
that Hindustan Aeronautics Limited is an undertaking of the Central
Government and it is the Central Government which exercises ful I control
over the same and, therefore, the Central Government would be the
"appropriate government". The stand of the respondent company is
that it carries on sovereign functions under the permission of the Central
Government and certain crucial aspects were not considered in HAL 1          F
(supra) and the analysis made in HAL 2 (supra) is the correct and legally
justified. Relying heavily on the decision in SA/L's case, it is put forth
that the respondent company carries its operation under the authority of
the Central Government due to specific conferment of power and
permission granted by the Central Government to it and, therefore, it is     G
to be deemed that the permission had been granted by the Central
Government to the respondent company. Elucidating further that the
 respondent company is under the control of the Central Government,
 reference has been made to Section 2 of the Industries (Development
 and Regulation) Act, 1951 which declares that regard being had to
                                                                             H
988                   SUPREME COURT REPORTS                     (2016] 1 S.C.R.


A     expediency of control by the Union, it is expedient in the public interest
      that the Union should take under its control the industries specified in the
      First Schedule. Learned senior counsel for the respondent has drawn
      our attention to Entry 7(1) ofthe First Schedule which deals with' Aircraft'
      and Entry 3 7 which deals with ·Defence Industries - Arms and
      Ammunition' and, on that basis submits that the respondent company
B
      being the exclusive manufacturer it has to be treated as one under the
      control of the Central Government. Learned senior counsel for the
      respondent had urged that in HAL I (supra), the Court did not consider
      the fact that the respondent company carried on by virtue of, and pursuant
      to, conferment of, grant of, or delegation of power or permission by the
c     Central Government, and, therefore, the said decision does not state the
      correct proposition of law. It is argued that the Division Bench of the
      High Court has correctly applied the test stipulated in SAIL (supra) and
      hence, it is absolutely impeccable. Highlighting the said facet, it is
      contended that decision in HAL I (supra) is per incuriam.
D             22. Our attention has also been drawn to Tata Memorial Hospital
      Workers Union v. Tata Memorial Centre anti another" by the learned
      counsel for the appellant. In the said case, it has been held that for the
      first respondent-establishment therein the Central Government was the
      appropriate Government for the purposes application of Section 2(3) of
      the 1971 Act. After adverting to the necessary and relevant provisions
 E    of 1971 Act, the three-Judge Bench referred to Section 2(1) of ID Act
      and observed that from the definition it is clear that under the ID Act the
      Central Government is the "appropriate Government" in relation to the
      industrial disputes concerning the industries specified under Section 2(aXi)
      and for the industries carried on by or under the authority of the Central
 F    Government. Excluding these two categories of industries in relation to
      any other industrial dispute, it is the State Government which is the
      "appropriate Government". The Court adverted to the phrase "any
      industry carried on by or under the authority" of the Central Government.
      The Court posed the question-whether the Division Bench of the High
      Court has correctly applied the law laid down in SAIL's case. The Court
 G    noticed that judgment in SAIL 's case has reiterated the law laid down
      in Heavy Engineering Mazdoor l!1tio1t (supra) though with a little
      divergence and thought it appropriate to examine as to how the concept
      of "appropriate Government" has been explained by the Courts in the

 H    " (2010) s sec 480
 NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                                 989
            LIMITED [DIPAK MISRA, J.)

later leading decisions. The Court analysed the principles stated in f/e(lvy   A
En;;:illeerin;;: M(lzdoor Union (supra) at length and HAL 1 (supra). It
also referred to the authority in R(ls/itriya Mill M(lzdoor S(lnf(h (supra)
and various authorities, including the one in Air India Statutory Corpn.
(supra). The Court thereafter referred to paragraphs 37 to 41, 43, 45
and 46 of SA/L's C(ISe and noted the submissions of the learned counsel
                                                                               B
for the parties and came to hold thus:-
       "57. Having seen the statutory framework it is clear that when it
       comes to an industry governed under the Industrial Disputes Act,
       194 7, to be covered under the MRTU 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
                                                                               c
       the MRti.J Act, we have to fall back on the definitions of"industry"
       and "appropriate Government" under the Industrial Disputes Act,
       194 7. As perthe scheme of Section 2(a) of the Industrial Disputes
       Act, for the industrial disputes concerning the industries specified
       in su.b-section (i), and for the industries which are carried on by     D
       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 "appropriate Government". Therefore in an
       industrial disputes concerning industries, other than specified
       industries it becomes necessary to examine whether the industry         E
       is carried on by or under the authority of the Central Government.
       When it does not fall under either of the two categories, the State
       Government will be the appropriate Government.
                 x        x        x        x       x
                                                                               F
       59. As far as an industry "carried on by the Central Government"
       is concerned, there need not be much controversy inasmuch as it
       would mean the industries such as the Railways or the Posts and
       Telegraphs, 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     G
       Government". Now, as has been noted above, in the Constitution
       Bench judgment in SAIL (supra), the approach of the different
       Benches in the four eatlier judgments has been specifically
       approved and the view expressed in Air Indi(I (supra) has been
       disagreed with. The phrase "under the authority" has been
                                                                               H
990                  SUPREME COURT REPORTS                    [2016] 1 S.C.R.



A           interpreted in Hemy Engg. (supra) to mean ··pursuant to the
            authority" such 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 Engg. Mazdoor Union case (supra). However, where a
            statute setting up a corporation so provides specifically, it can
B
            easily be identified as an agent of the State.
            60. The judgment in Heavy E11gg. Mazdoor Union (supra)
            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 functions. The
 c          Constitution Bench in SAIL 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 Engg. (supra) judgment is
            otherwise completely approved, wherein it is made clear that the
 D          fact that the members or Directors of corporation and he is entitled
            to call for information, to give 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
 E          are determined by it, was also held to be not relevant."
             23. At this stage, we may note with profit that the three-Judge
      Bench has stated that the Constitution Bench in SAIL (supra) has agreed
      with the view expressed in Hellvy Engi11eeri11g Mllzdoor U11io11 (supra)
      with little divergence. The same has been explained in the following
 F    111anner:-

             "45. In para 41 of the judgment in SAIL case (supra), the
             Constitution Bench examined the judgment in Heavy Engg.
             Mazdoor Union case (supra). In Heavy Engg. Mazdoor Union
             (supra) the Court had observed that an inference that the
 G           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 between the governmental activity and
             commercial function of government companies. Barring this limited
             disagreement, however at the end of para 41 the Constitution
 H
NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                                   991
           LIMITED [DIPAK MISRA, J.]

      Bench observed that it is evident that the Court correctly posed          A
      the question whether the State Government or the Central
      Government was the "appropriate Government" and rightly
      answered it. In para 42, the Constitution Bench examined the
      judgment of Hindustan Aeronautics Ltd (supra) The Constitution
      Bench noted that the judgment in Heavy Engg. Mazdoor Union
                                                                                B
      case (supra) was followed in Hindustan 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 not be said to be irrelevant."               c
       24. It is also necessary to note here that the three-Judge Bench
referred to HAL 1 (supra) and ruled thus:-
      "ln Hindustan Aeronautics (supra) the fact that the industrial
      dispute had arisen in West Bengal and that the "appropriate
      Government" in the instant case for maintaining industrial peace          D
      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 (supra) the fact that the authorised Controller
      was appointed by the Central Government to supervise the
      undertaking was held as not making any difference. The fact that          E
      he was to work under the directions of the Central Government
      was held not to render the industrial undertaking an agent of the
      Central Government."
     25. Thus, as is evident, in Tata Memorial Hospital Workers
Union (supra)the Court had analysed the propositions in SAIL (supra)            F
and opined that the same have to be seen in the background of the facts
and merely because the Government companies/corporations and·
societies are discharging public functions and duties that does not by
itself make them agents of the Central or the State Government. It is
further ruled that industry or undertaking has to be carried under the
authority of the Central Government or the State Government and that            G
authority may be conferred either by a statute or by virtue of a relationship
of principal and agent, or delegation of power. It has also been observed
therein that when it comes conferring power by statute, there is not
much difficulty, however, where it is not so, whether the undertaking is
functioning under authority or not is a question of fact.                       H
992                 SUPREME COURT REPORTS                   (2016] I S.C.R.


A         26. In the case at hand, the issue which arises for consideration is
  whether the decision in HAL 2 (supra) can be regarded as a binding
  precedent. As is noticeable, HAL2 (supra) has not taken note of earlier
  decision in HAL 1 (supra). It has been clearly held in HAL 1 (supra)
  that regard being had to the dictionary clause of the ID Act for the
  purpose of Hindustan Aeronautics Limited, it is the State Government
B
  which has to make the reference. In HAL 2 (supra) the Court has
  referred to decision in SAJL 's case and opined that it is undisputed that
  Hindustan Aeronautics Limited is an undertaking of the Central
  Government and it is the Central Government which exercises full control
  over the same and, therefore, the appropriate Government is the Central
c Government. This analysis runs counter to HAL 1 (supra) and as well
  the ratio of the decision in SAJL's case. On the contrary there is no
  discussion either on the facts or the law. It has been opined that the
  facts are "undisputed". In HAL 1 (supra), the three-Judge Bench had
  referred to the decision in Heavy Engineering Mazdoor Union (supra).
  As has been held in Tata Memorial Hospital Workers Union (supra),
D
  the 3cuthority in Heavy Engineering Mauloor Union (supra) has been
  approved in SAIL (supra) with some divergence. The authority in SA/L's
  case, as the conclusion would show, covers two situations - the
  unamended provision and the amended provision. It does not disturb the
  principles stated in HAL I (supra). Thus, two aspects, first, the HAL 2
E (supra) does not take note of HAL 1 (supra) and second, it proceeds on
  the basis of undisputed facts which are not stated. It is to be noted that
  there is nothing in the order in HAL 2 (supra) to suggest that Hindustan
  Aeronautics Limited is an agent of the Central Government. In our
  considered opinion, as HAL 2 (supra) has not noticed HAL I (supra)
  which has been approved in SA/L's case, it cannot be considered as a
F
  binding precedent. Therefore, we hold that HAL 1 (supra) still holds
  good and lays down the correct law and we are bound by it as its
  foundation flows from Heavy Engineering Muzcloor Union (supra)
  which has been approved in SAIL (supra) with some divergence as has
  been stated in Tata Memorial Hospital Workers Union (supra). Be it
G stated, that divergence really does not affect the approval. We have no
   hesitation in our mind that HAL 2 (supra) cannot be regarded as a binding
  precedent. Ergo, it is clear that the Division Bench of the High Court
  has not applied the ratio in SA/L's case correctly and, therefore, the
  entire anlaysis has to be held to be fallacious.

 H
 NASHIK WORKERS UNION v. HINDUSTAN AERONAUTICS                               993
            LIMITED [DIPAK MISRA, J.]

       27. The controversy does not end there. It is perceptible that the    A
High Court has not adverted to the merits of the case and dismissed
L.P.A. No. 144 of2002 on the ground that itdid not survive after dismissal
of L.P.A. No. 84 of ;wo6. As we have set aside the order passed in
L.P.A. No. 84 of2006 and opined that the "appropriate Government" in
relation to the respondent company is the State Governll'!ent, the matter
                                                                             B
has to be remitted to the High Court for fresh adjudication on merits.
        28. Consequently, the appeals are allowed and the impugned order
is set aside and L.P.A. No. 144 of2002 is remitted to the High Court to
be adjudicated on merits. We request the High Court to dispose of the
matter within six months hence. There shall be no order as to costs.
                                                                             c
Nidhi Jain                                                Appeals allowed.