TMI Blog1969 (1) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany will be on a par with those applicable to other Government Companies or Companies in which the Government holds more than 25 per cent of the share capital. The Company cannot, therefore, be treated as either being equivalent to the Government or to be an agent of the Government, so that the control exercised by its Directors or the Managing Director over respondent No. 1 cannot be held to be control exercised by the Government. Therefore, respondent No. 1 cannot be held to be holding an office of profit under the Government of Mysore and was Pot disqualified from being chosen as a member of the Assembly of the State. Appeal dismissed. - Civil Appeal No. 718 of 1968 - - - Dated:- 27-1-1969 - BHARGAVA, VISHISHTHA, SHELAT, J.M. AND VAIDYIALINGAM, C.A., JJ. For the Appellant : S. V. Gupte, Shyamala Pappu, S. S. Javali and Vineet Kumar For the Respondent : Lily Thomas JUDGMENT Bhargava, J. This appeal under section II 6A of the Representation of the Peoples' Act No. 43 of 1951 (hereinafter referred to as "the Act") has been filed by one of the unsuccessful candidates for election to the Mysore Legislative Assembly from No. 152, Bhadravati Constituency, aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany was registered under the name of Mysore Iron Steel Limited, Bhadravati (hereinafter referred to as "the Company") under the Indian Companies Act, 1956, and this Company took over the Mysore Iron Steel Works from the Government. Respondent No. 1 had first joined service as a daily worker in 1936, but was promoted as Chargeman, Asstt. Foreman, Foreman and thereafter as Assistant Superintendent which was the post held by him in the year 1962 at the time when the concern was taken over by the Company. Subsequently, he was promoted as Superintendent in the year 1964 and was working on that post at the time of the election in 1967. It was also the common case of the parties that the shares of the Company were held cent per cent by the Mysore Government, though some of the shares were shown in the names of some of the Officers in the service of the Mysore Government. Under the Articles of Association of the Company, the first Directors of the Company were the Minister-in-charge of the Industries Portfolio in the Mysore Government, the Secretaries to the Mysore Government in the Finance Department, and in the Commerce and Industries Department, the Managing Director of the Mysore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xistence a relationship of master and servant between the Company and respondent No. 1. That circumstance,, by itself, cannot lead to the conclusion that respondent No. 1 continued to be in government service. When the undertaking was taken over by the Company as a going concern, the employees working in the undertaking were also taken over and since, in law, the Company has to be treated as an entity distinct and separate from the Government, the employees, as a result of the transfer of the undertaking, became employees of the Company and ceased to be employees of the Government. This position is very clear at least in the case of those employees who were covered by the definition of workmen under the Industrial Disputes Act in whose-cases, on the transfer of the undertaking, the provisions of section 25FF of that Act would apply. Respondent No. 1 was a workman at the time of the transfer of the undertaking in the year 1962, because he was holding the post of an Assistant Superintendent and was drawing a salary below Rs. 500 per mensem. As a workman, he would, under s. 25FF of the Industrial Disputes Act, become an employee of the new employer, viz., the Company, which took over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded in it,, and, on the face of it, University employees could not be held to be in government service. The Civil List relied upon clearly is not confined to names of persons in Mysore Government service only, so that this piece of evidence relied on by the appellant also does not establish that respondent No. 1 continued to be in government service after the undertaking was taken over by the Company. Finally, there is the circumstance that it is not shown that, after the undertaking was taken over by the Company, respondent No. 1 continued to hold a lien on any Government post. In fact, the post, which he was holding while the concern was being run by the Mysore Government, ceased to be a Government post on the transfer of the undertaking to the Company and became a post under the Company, so that respondent No., 1 ceased to be in government service by continuing in that post. The first contention raised on behalf of the appellant, therefore, fails. On the second contention that, even if respondent No. 1 was not holding a government post, he must be held to be holding an office of profit under the Government, Mr. Gupte relied on the principles laid down by this Court in Gurugob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf was undoubtedly holder of an office of profit under the Government, though there were safeguards in the Constitution as to the tenure of his office and removability therefrom. Under Art. 148 of the Constitution, the Comptroller Auditor-General was appointed by the President and he could be removed from office in like manner and on the like grounds as a Judge of the Supreme Court. 'Me salary and other conditions of service of the Comptroller Auditor-General were to be such as might be determined by Parliament by law and, until they were so determined, they were to be as 'specified in the Second Schedule to the Constitution. Other provisions relating to the Controller and Auditor-General were also taken notice of and an inference was drawn from these provisions that the Comptroller and Auditor-General is himself a holder of an office of profit under the Government of I ndia, being appointed by the President, and his administrative powers are such as may be prescribed by the rules, made by the President, subject to the provisions of the Constitution and of any law made by Parliament. The Court then held:- "Therefore, if we look at the matter from the point of view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that all the shares of the Company are not only owned by the Mysore Government, but the Directors of the Company are appointed by the Government a Minister was one of the first Directors of the Company; the appointment of the Secretary to the Company is subject to approval of the Government; and, even in the general working of the Company, Government has the power to issue directions to the Directors which must be carried out by them. It was urged that respondent No. 1 was directly under the control of the Managing Director who is himself appointed by the Government and may even be a 'lent officer' holding a permanent. post under the Government. Respondent No. 1, thus, must be held to be working under the control of the Government exercised through the Managing Director. We are unable to accept the proposition that the mere fact that the Government had control over the Managing Director and other Directors as well as the power of issuing directions relating to the working of the Company can lead to the inference that every employee of theCompany is under the control of the Government. The power of appointment and dismissal of respondent No. 1 vested in the Managing Director of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arts. 102(1) and 191(1)(a) of the Constitution is of significant help. In Arts. 58(2) and 66(4) dealing with eligibility for election as President or Vice-President of India, the Constitution lays down that a person shall not be eligible for election if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments. In Articles 102 (1 )(a) and 191 (1) (a) dealing with membership of either House of Parliament or State Legislature, the disqualification arises only if the person holds any office of profit under the Government of India or the Government of any State other than an office declared by Parliament or State Legislature by law not to disqualify its holder. Thus, in the case of election as President or Vice-President, the disqualification arises even if the candidate is holding an office of profit under a local or any other authority under the control of the Central Government or the State Government, whereas, in the case of a candidate for election as a Member of any of the Legislatures, no such disqualification is laid down by the Constitution if the offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider it necessary to disqualify every person holding an office of profit under a Government Company. but limited the disqualification to persons holding the office of managing agent, manager or secretary of the Company. The fact that the entire share capital in the Company in the case before us is owned by the Government does not, in our opinion, make any difference. Under the Articles of Association, it is clear that, though, initially, all shares were held by the Government, it is possible that private citizens may also hold shares in the Company. In fact, there, are provisions indicating that shares held by certain shareholders can pass by succession to members of their family or can even be transferred by gift to them. The Articles of Association lay down that the Company shall be a private limited company within the meaning of the Indian Companies Act, 1956, and, though the shares in the capital of the Company are under the control of the Board of Directors, they have been given the liberty to allot, grant option over or otherwise dispose of the shares at such time and to such persons, and in such manner and upon such terms as they may think proper. Under this power, the Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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