TMI Blog2010 (3) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... Shankar Chillarge and Ms. Asha Gopalan Nair for the Respondent. JUDGMENT R.V. Raveendran, J. Facts in C. A. No. 1886 of 2007 The appellant is a private limited company incorporated under the provisions of the Companies Act, 1956. The respondent-S.P. Padhye-('the employee') was employed as a telephone operator by the appellant for more than two decades. The respondent's service was terminated by the appellant with effect from December 31, 2000, on the ground that he had become deaf (85 per cent. reduction in ability to hear). The respondent complained to the Disability Commissioner, Pune, in regard to such termination, alleging that he was fit, able and normal when he joined service of the appellant and as he acquired the hearing impairment during the period of service, he should have been continued in employment in some suitable post. The Disability Commissioner made an order dated 12-10-2001, suggesting to the employer to undertake a social responsibility, by re-employing the respondent to discharge any other work. The suggestion was not accepted by the employer. 2. According to the respondent, the Commissioner, instead of making a mere suggestion, ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of this court-the Constitution Bench decision in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi [1975] 1 SCC 421/45 Comp. Cas. 285 (SC) and the decision in S.S. Dhanoa v. Municipal Corporation, Delhi [1981] 3 SCC 431. Feeling aggrieved, the appellants have filed this appeal. Questions for decision 4. The employee relies on section 47 which provides that no establishment shall dispense with, or reduce in rank, an employee who acquires a disability during his service. Section 47 of the Act is extracted below : "47. Non-discrimination in Government employment. (1) No establishment shall dispense with, or reduce in rank, an employee who acquires a disability during his service : Provided that, if an employee, after acquiring disability is not suitable for the post he was holding, could be shifted to some other post with the same pay scale and service benefits : Provided further that if it is not possible to adjust the employee against any post, he may be kept on a supernumerary post until a suitable post is available or he attains the age of superannuation, whichever is earlier. (2) No promotion shall be denied to a person merely on the ground of his disability : P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in section 2(k) of the Act. 9. The employee contends that a company incorporated under the Companies Act is a Corporation falling under the first category enumerated in section 2(k), that is "Corporation established by or under a Central, Provincial or State Act", on the following reasoning : that a corporation refers to a company ; that the Companies Act is a Central Act ; and that therefore a company incorporated and registered under the Companies Act is a Corporation established under a Central Act. He contends that the use of the words "by or under" is crucial. According to him, "a corporation established by an Act" would refer to a corporation brought into existence by an Act ; and a "Corporation established under an Act" would refer to a company incorporated under the Companies Act. On the other hand, the employer contends that the term "Corporation established by or under a Central, Provincial or State Act" refers to a statutory Corporation which is brought into existence by a statute, or under a statute and does not include a company which is registered under the Companies Act. It is submitted that the Companies Act merely facilitates and lays down the procedure for inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited is not a corporation established by a Central or State Act. The crux of the matter is whether the word "under" occurring in clause Twelfth of section 21 of the Indian Penal Code makes a difference. Does the mere act of incorporation of a body or society under a Central or a State Act make it a corporation within the meaning of clause Twelfth of section 21 ? In our opinion, the expression 'corporation' must, in the context, mean a corporation created by the Legislature and not a body or society brought into existence by an act of a group of individuals. A cooperative society is, therefore, not a corporation established by or under an Act of the Central or State Legislature. A corporation is an artificial being created by law having a legal entity entirely separate and distinct from the individuals who compose it with the capacity of continuous existence and succession, notwithstanding changes in its membership . . . The term 'corporation' is, therefore, wide enough to include private corporations. But in the context of clause Twelfth of section 21 of the Indian Penal Code, the expression 'corporation' must be given a narrow legal connotation. Corporation, in its wides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y lawful purpose subscribing their names to a memorandum of association and by complying with the requirements of the Companies Act in respect of registration. Therefore, a "company" is incorporated and registered under the Companies Act and not established under the Companies Act. Per contra, the Companies Act itself establishes the National Company Law Tribunal and National Company Law Appellate Tribunal, and those two statutory authorities owe their existence to the Companies Act. 14. Where the definition of "establishment" uses the term "a corporation established by or under an Act", the emphasis should be on the word "established" in addition to the words "by or under". The word "established" refers to coming into existence by virtue of an enactment. It does not refer to a company, which, when it comes into existence, is governed in accordance with the provisions of the Companies Act. But then, what is the difference between "established by a Central Act" and "established under a Central Act" ? The difference is best explained by some illustrations. A corporation is established by an Act, where the Act itself establishes the corporation. For example, section 3 of the State B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 617 of the Companies Act, 1956. The inclusion of only a specific category of companies incorporated under the Companies Act, 1956, within the definition of "establishment" necessarily and impliedly excludes all other types of companies registered under the Companies Act, 1956, from the definition of "establishment". It is clear that the legislative intent was to apply section 47 of the Act only to such establishments as were specifically defined as "establishment" under section 2(k) of the Act and not to other establishments. The legislative intent was to define "establishment" so as to be synonymous with the definition of "State" under article 12 of the Constitution of India. Private employers, whether individuals, partnerships, proprietary concerns or companies (other than Government companies) are clearly excluded from the "establishments" to which section 47 of the Act will apply. 16. There is yet another indication in section 47, that private employers are excluded. The caption/marginal note of section 47 describes the purport of the section as non-discrimination in Government employment. The word "Government" is used in the caption, broadly to refer to "State" a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barrier free environment for persons with disabilities ; (iii)to remove any discrimination against persons with disabilities in the sharing of development benefits, vis-a-vis non-disabled persons ; (iv)to counteract any situation of the abuse and the exploitation of persons with disabilities ; (v)to lay down a strategy for comprehensive development of programmes and services and equalisation of opportunities for persons with disabilities ; and (vi)to make special provision of the integration of persons with disabilities into the social mainstream." 18. He submitted that keeping the said objects in view, the term "establishment" should be extended to all corporations incorporated under the Companies Act, 1956, irrespective of whether they are in the public sector or private sector. 19. He also relied upon the following principle of contextual interpretation enunciated by this court in Reserve Bank of India v. Peerless General Finance Investment Co. Ltd. [1987] 1 SCC 424/61 Comp. Cas. 663 "Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luxuries are misplaced in the interpretation of "bread and butter" statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the court is not to make inroads by making etymological excursions'." (p. 76) 21. He next relied upon the following observations in Kunal Singh v. Union of India [2003] 4 SCC 524, where this court, referring to the very section under consideration, observed thus : "Section 47 contains a clear directive that the employer shall not dispense with or reduce in rank an employee who acquires a disability during the service. In construing a provision of a social beneficial enactment that too dealing with disabled persons intended to give them equal opportunities, protection of rights and full participation, the view that advances the object of the Act and serves its purpose must be preferred to the one which obstructs the object and paralyses the purpose of the Act. Language of section 47 is plain and certain casting statutory obligation on the employer to protect an employee acquiring disability during service." (p. 529) 22. We agree that the socio-economic le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory corporations. Reference is invited to some provisions of the Act to contend that obligations/duties/responsibilities are fixed with reference to persons with disabilities, on establishments other than those falling under section 2(k) of the Act. It was submitted that section 39 casts an obligation on all educational institutions, to reserve not less than three per cent. of the seats for persons with disabilities. In fact, it is not so. Though, the marginal note of section 29 uses the words "all educational institutions" with reference to reservation of seats for persons with disabilities, the section makes it clear that only Government educational institutions and educational institutions receiving aid from the Government shall reserve not less than three per cent. seats for persons with disabilities. It is well recognised that an aided private school would be included within the definition of 'State' in regard to its acts and functions as an instrumentality of the State. Therefore, care is taken to apply the provisions of the Act to only educational institutions belonging to the Government or receiving aid from the Government and not to unaided private educational institutio ..... 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