9911796707
TMI Blog1969 (1) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... February, 1967, and after the counting of votes, the results were declared on 22nd February, 1967. Respondent No. 1 received 15,862 votes, while the appellant received 13,380 votes. The other three candidates, respondents 2 to 4, were also unsuccessful having received much smaller number of votes. On 5th April, 1957, the appellant filed the election petition challenging the election of respondent No. 1 on a number of grounds, out of which we need mention only one single ground, as the appeal in this Court is confined to that ground alone. It was pleaded that respondent No. 1 Was disqualified under Article 191 (1) (a) of the Constitution from being chosen as a member of the Legislative Assembly, because he was holding an office of profit under the Government of the State of Mysore on the date of scrutiny. This ground, as well as other grounds taken by the appellant for challenging the validity of the election of respondent No. 1 were all rejected by the High Court and the election petition was dismissed.' Consequently, the appellant has come up in this appeal to this Court. Though, in this appeal, a number of grounds were raised, Mr. S. V. Gupte, counsel for the appellant, confined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government had considerable control in appointment of Directors of the Company as well as in the appointment of the Managing Director who was to be appointed by the Governor from amongst the Directors nominated by him. The Governor was also entitled to appoint from amongst the nominated Directors a Chairman and Vice-Chairman of the Board of Directors. Even the Secretary of the Company had to be appointed by the Board of Directors after obtaining approval of the Governor. In respect of other employees of the Company, recruitment and service conditions had to be in accordance with the rules which may be prescribed by the Governor from time to time. When the concern was taken over from the Government by the Company,, the services of respondent No. 1 were not terminated and he was continued in the same post by the Company which he was holding when the concern was being run by the Government. There was no fresh contract entered into between him and the Company. On these facts, two alternative contentions were raised by Mr. Gupte to urge that respondent No. 1 was disqualified under Art. 191 (1 ) (a) of the Constitution. The first argument was that respondent No. 1, when initially appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the undertaking was taken over by the Company, the employees, who were workmen, were no longer governed by the Mysore Civil Service Regulations. Their conditions of service were determined by the Standing Orders of the Company which were certified under the Industrial Employment (Standing Orders) Act, 1946. These Standing Orders even referred to certain employees as "lent Officers". The reference was obviously to persons who continued to be in the Government service, but whose services were lent to the Company. It was conceded in the present case that respondent No. 1 was not a lent officer as envisaged by that expression used in the Standing Orders. Respondent No. 1 further came to be governed by the Works Service Rules. It is true that, under the Articles of Association, the Governor had the power to lay down conditions of service of the employees of the Company; but that cannot mean that the employees of the Company continued to be in the service of the Government. Reliance in this connection was also placed on behalf of the appellant on the fact that the name of respondent No. 1' appeared in the Mysore Civil List under the heading "Iron and Steel. Ltd., Bhadravati" from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office of profit under the Government' and 'the holder of a post or service under the Government' see Arts. 309 and 314. The Constitution has also made a distinction between 'the holder of an office of profit under the Government' and 'the holder of an office of profit under a local or other authority subject to the control of Government'; see Art. 58(2) and 66-(4)." The Court then proceeded to consider the earlier decision in the case of Maulana Abdul Shakur v. Rikhab Chand and Anr.([1964] 4 SCR 311) and held :- "it is clear from the aforesaid observations that in Maulana Abdul Shakur's case(2) the factors which were held to be decisive were : (a) the power of the Government to appoint a person to an office of profit or to continue him in that office or revoke his appointment at their discretion, and (b) payment from out of Government revenues, though it was pointed out that payment from a source other than Government revenues was not always a decisive factor." After this reference to Maulana Abdul Shakur's case ([1958] S.C.R, 387) the Court proceeded, to apply the principles to the facts of the case before it. In that case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the control of the Comptroller and Auditor-General who himself is appointed by the President and whose administrative powers may be controlled by rules made by the President." Thereafter, the Court proceeded to hold:- "In view of these decisions, we cannot accede to the submission of Mr. Chaudhury that the several factors which enter into the determination of this question-the appointing authority, the authority vested with power to terminate the appointment, the authority which determines the remuneration, the source from which the remuneration is paid, and the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf must all co-exist and each must show subordination to Government and that it must necessarily follow that if one of the elements is absent, the test of a person holding an office under the Government, Central or State, is not satisfied. 'Me cases we have referred to specifically point out that the circumstance that the source from which the remuneration is paid is not from public revenue is a neutral factor not decisive of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irections to the Company in its general working does not bring respondent No. 1 directly under the control of the Government. In Gurugobinda Basu's case ([1964]4S.C.311), the position was quite different. In that case, the appellant was appointed by the Government and was liable to be dismissed by the Government. His day-to-day working was controlled by the Comptroller and Auditor-General who was a servant of the Government and was not in any way an office-bearer of the two Companies concerned. In fact, the Court had no hesitation in holding that the appellant in that case was holding an office of profit 'under the Government, because the Court found that the several elements which existed were the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed, arid the power to determine the question of remuneration. AR these elements being present, the Court did not find any difficulty in finding that the appellant was holding an office of profit under the Government. In the case before us, the position is quite different. The power to appoint and dismiss respondent No. 1 does not vest in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication even if that local authority be under the control of the Government. The mere control of the Government over the authority having the power to appoint, dismiss, or control the working of the officer employed by such authority does not disqualify that officer from being a candidate for election as a member of the Legislature in the manner in which such disqualification comes into existence for being elected as the President or the Vice-President. The Company, in the present case, no doubt did come under the control of the Government and respondent No. 1 was holding an office of profit under the Company; but, in view of the distinction indicated above, it is clear that the disqualification laid down under Art. 191 (1) (a) of the Constitution was not intended to apply to the holder of such an office of profit. It also appears to us that it was in view of this limited application of the disqualification laid down in Arts. 102 (1 ) (a) and 191 (1) (a) of the Constitution that Parliament made an additional provision in section 10 of the Act by laying down that "a person shall be disqualified if, and for so long as, he is a managing agent, manager or secretary of any company or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hter, brother, sister, nephew or niece of such member or the wife or husband of any person standing in such relationship to the transferring member. Devolution of shares on sequent to the death of a member, on his heirs is also recognised by the Articles of Association. In these circumstances, the principles which will apply to the Company 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. Mr. Gupta, in this connection, also urged that we should Pierce the veil of the Company being a separate juristic and legal entity,, apart from the Government which owns all the shares in the Company, and hold that, in fact, the Company should be equated with the Government of Mysore itself .In our opinion, in the present case, no question of piercing the veil can arise in view of the provisions of section 10 of the Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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