1995 (10) TMI 229 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the Haryana Housing Board is a "Local Authority" within the meaning of Section 32(iv) of the Payment of Bonus Act, 1965.

Summary:

Issue 1: Definition and Attributes of "Local Authority"

The primary issue is whether the Haryana Housing Board qualifies as a "Local Authority" u/s 32(iv) of the Payment of Bonus Act, 1965. The term "Local Authority" is not defined in the Payment of Bonus Act but is defined in Section 3(31) of the General Clauses Act, 1897, and Section 2(J) of the Haryana Housing Board Act, 1971. The definitions in both Acts are conclusive, including bodies like Municipal Committees and Gram Panchayats. However, the General Clauses Act includes "Authority legally entitled to or entrusted by the Government with, the control or management of a Municipal or Local Fund," a phrase absent in the Haryana Housing Board Act.

The concept of "Local Authority" is also found in Entry 5, List II of the Seventh Schedule of the Constitution, which empowers the State Legislature to make laws related to Local Government, including the constitution of "Local Authorities." These bodies, like Municipal Committees and District Boards, are independent entities with minimal government control, formulating and implementing their policies, levying taxes, and managing local funds.

In the case of Union of India and Ors. v. R.C. Jain and Ors., the Supreme Court identified attributes of a "Local Authority," including separate legal existence, partial election by inhabitants, a degree of autonomy, governmental functions, and the power to raise funds. Applying these principles, the Haryana Housing Board does not meet these criteria as it is not an independent entity, lacks elected representatives, and operates under significant state government control.

Issue 2: Control and Functioning of Haryana Housing Board

The Haryana Housing Board Act, 1971, establishes the Board as a body corporate with perpetual succession and a common seal. The Board consists of members appointed by the State Government, not elected by the people, and functions under the state's supervision and control. The Board's activities, such as framing and executing housing schemes, are subject to state government control. The Board's finances are audited by government-appointed auditors, and it must comply with state directions.

Sections 71 and 72 of the Act further highlight the state's control over the Board, including the power to give directions, suspend the Board, and reconstitute it. The Board's fund, consisting of various sources, is not a "local fund" as defined for Local Authorities. The Board's limited independence and lack of elected representation distinguish it from Local Self Governments like Municipal Boards or District Boards.

Issue 3: Limited Status as "Local Authority"

Sub-section (3) of Section 3 of the Haryana Housing Board Act, 1971, deems the Board a "Local Authority" for the purposes of the Act and the Land Acquisition Act, 1894. This status is limited and fictional, not extending to the Payment of Bonus Act. The legislature could have extended this status to other Acts but did not, indicating the Board is not a "Local Authority" under the Payment of Bonus Act.

Issue 4: Judicial Precedents and Comparisons

Various judicial precedents were considered, including decisions where bodies like the Mines Board of Health and Jal Sansthan were deemed Local Authorities. However, these cases involved different statutory provisions and contexts, distinguishing them from the Haryana Housing Board's situation. The Supreme Court's decision in R.C. Jain's case was pivotal, emphasizing attributes of Local Authorities that the Haryana Housing Board lacks.

Conclusion

The Haryana Housing Board does not possess the attributes of a "Local Authority" as defined in the General Clauses Act and interpreted by the Supreme Court. The Board's significant state control, lack of elected representatives, and absence of a local fund preclude it from being classified as a "Local Authority" under Section 32(iv) of the Payment of Bonus Act, 1965. Consequently, the appeals were dismissed without any order as to costs.