IN THE SUPREME COURT OF INDIA
Civil Appeal No. 1330 of 1969
AIR 1975 SC 1737
Hindustan Aeronautics Ltd.
The Workmen And Ors.
Date of Judgement
4th August, 1975
Hon’ble Justice L. Untwalia, J; K. Goswami, J; Alagiriswami, J
There have many instances where a dispute between the workers and the management of the company has arisen on various issues such as wages, other allowances or not having proper working standards, etc. Then the employees either resort to protest via way of strikes or choose a legal path through tribunals. It is to be noted that tribunals cannot exercise their jurisdiction on the matters which are not even an issue to be adjudicated for. The case of Hindustan aeronautics ltd. v. The workmen and ors, was one of the similar nature where there was a dispute between the workers and the management over wages etc. but the tribunal awarded claims over its jurisdiction and hence the Supreme Court has to decide the matter.
This has always been a burning question that whether a Corporation established under a statute is an agent of the State or not. The question has been settled in various cases such as Graham v. Public Works commissioners, where Justice Phillimore, said in the absence of a statutory provision, however a commercial corporation acting on its own even if it is controlled wholly or partially by the Government is ordinarily presumed not an agent of the State. The fact that a minister appoints the members or directors of a corporation and he is entitled to give directions and to supervise the business of the corporation does not render the corporation an agent of the State. The present case also involved a similar question besides others.
Statutory Provisions Discussed:
Section 2(a), 10(1) of Industrial Disputes Act, 1947.
Facts of the Case:
The Appellants have approached the Supreme Court by Special Leave to Appeal against the award of Fifth Industrial Tribunal, West Bengal. The Tribunal has allowed the claim of workmen partly in some issues and rejected the claim in some issues. The Appellants i.e. the company has approached against the award which partly allows the claim and challenging it to be set aside. They have challenged the competency of the State Government to refer the matter to Industrial Tribunal.
Hindustan Aeronautics Ltd. is a Government company constituted under Section 617 of the Companies Act, 1956. The shares of the Appellant Company are entirely owned by the Central Government. The dispute is related to around 1,000 workers working at Barrackpore, West Bengal which is a repairing workshop Branch of the Company. The dispute is about 5 various issues.
(1) Whether Allowance for the education of employees’ children be given?
(2) Whether there can be Revision of the Lunch allowance given to employees?
(3) Whether 10 certain canteen employees should be made permanent employees?
Arguments by the Appellants-
The Appellants claimed that the Corporation is an agent of the State because it appoints and removes the Board of Directors and the MD. All important is reserved for the decision of the President of India. The MOA and AOA of the company point out the vital role of the Central Government. Hence, the appropriate government referred to in Section 10(1) of Industrial Disputes Act, 1947 would be either Central Government or Karnataka’s State Government because the Barackpore branch works under the Bangalore office.
The Judgment of the Court was delivered by Justice Untwalia.
The Court held that the Appellant Company is not an agent of the Government and for this, the Court relied upon various cases such as Heavy Engineering Mazdoor Union v. The State of Bihar & Ors., The ratio, in this case, was one similar to the case of Graham v. Public Works Commissioners.
The Court further held that the West Bengal Government was competent to make such reference to the Industrial Dispute Tribunal. The Barackpore branch was working as a separate industrial unit. The workers were receiving their wages at Barrackpore. The Government of West Bengal had the duty to maintain Peace and Order if there would have been any disturbance. The cause of action also arose at Barackpore. Hence, the West Bengal Government was competent enough to make the reference.
Issue no. 1 –
The Court while deciding the first issue did not go into the merits of the issue and held that the tribunal’ award of Rs. 12/- per month for each employee to meet the education expense of his children was beyond the scope of the matter referred for adjudication. The Court further held that the Tribunal cannot revise the wages when such reference has not been asked or made for. The Court while dismissing the award of Tribunal on this issue also said that such a dispute could be raised before the tribunal afresh.
Issue no. 2 –
The Court decided this issue in the favor of the Appellant since every employee including the supervisory and non-supervisory staff was getting lunch allowance at Rs. 1.50/- per employee. The Court held that the award of the tribunal, therefore, was unnecessary and superfluous in that regard.
Issue no. 3 –
The Court decided this issue in favor of the Appellant. The Court held that the Tribunal did not go into details like whether more number of permanent employees were required in the canteen. The employees can be made permanent against the post of permanent employees only when they became vacant. Thus, the award of the tribunal was not justifiable. The Appellant agreed to employ them permanently as and when any vacancy arises.
The Court allowed the appeal and substantial part of the award of the tribunal was set aside. Some modifications were made to the award of the Tribunal that was clarified by the Court. This case has been a landmark for deciding whether the State Government can refer the matter to Industrial Disputes Tribunal or not.
Edited by Parul Soni
Approved & Published – Sakshi Raje
 Hindustan Aeronautics Ltd. v. The Workmen and Ors, AIR 1975 SC 1737.
 Graham v. Public Works Commissioners, (1901) 2 KB 781.
The State Trading Corporation of India Ltd v. The Commercial Tax officer Visakhapatnam, (1964) 4 S.C.R. 99.
Heavy Engineering Mazdoor Union v. The State of Bihar &Ors., AIR 1970 SC 82.
 Supra note 2.