SOM PRAKASH REKHI V. UNION OF INDIA (1981) 1 SCC 449
FACTS
In the current case, the petitioner was a clerk in the Burmah Shell Oil Storage Ltd who qualified for pension after his retirement at 50 years of age. He was also protected by the scheme under the Employees’ Provident Funds and Family Pension Fund Act, 1952. The employer was taken over by the Bharat Petroleum Corporation Ltd. under the Burmah Shell (Acquisition of Undertakings in India) Act, 1976, and the Corporation became the statutory successor of the petitioner employer. The petitioner’s pensionary rights became claimable from the second respondent. According to Regulation 13, the petitioner was entitled to a pension of Rs. 165.99 subject to certain deductions which formed the controversy in this case. He was also being paid a Supplementary Retirement Benefit of Rs. 86/- per month for a period of 13 months after his retirement which was stopped thereafter. By a letter dated September 25, 1974, the employer (Burmah Shell) explained that from out of the pension of Rs. 165.99 two deductions were authorised by Regulation 16. Resultantly, the ‘pension payable’ was shown as Rs 40.05.
The petitioner was intimated by the Burmah Shell that consequent on his drawal of provident fund and gratuity benefits, the quantum of his pension would suffer a pro tanto shrinkage, leaving a monthly pension of Rs 40/-. Since no superannuated soul can survive on Rs. 40/- per month, the petitioner moved the court challenging the deductions from his original pension as illegal and inhuman and demanding restoration of the full sum which he was originally drawing. According to the petitioner, his right to property under Article 19 had been violated.
ISSUE
The issue involved in the current case was whether the Bharat Petroleum Corporation was included under “Other Authorities” within the ambit of State, as described under Article 12.
JUDGEMENT AND ANALYSIS.
- This Hon'ble court observed that if the entity is no more than a company under the Company Law or society under the law relating to registered societies or co-operative societies, it cannot be called “an authority”. A ration shop run by a co-operative society financed by the government is not an authority, being a mere merchant, not a sharer of State power. “Authority” in law belongs to the province of power. Article 12 gives the cue to forbid this plea. “Other authorities” under the control of Govt. of India are comprehensive to rope in whatever anonymous body which has some nexus with the government. A wide expansion coupled with a wise limitation may and must readily and rightly be read into the last words of Article 12. The extended definition of the State in Article 12 is not to be deadened but quickened by judicial decision.
- This court also observed that if a corporate body is simply an ‘instrumentality or agency’ of government, then Part III will trammel its operations. Wherever the corporate body answers the test of “State”, it is included within the ambit of Article 12.
- It was held by this Hon'ble court that the company was included within the ambit of Article 12. The court emphasised that the true test of whether a body was an authority or not depended upon whether it was formed by a statute, or under a statute but was functional. For instance, in the current case, the key factor was “the brooding presence of the state behind the operations of the body, statutory or other”. Here, the body was semi statutory and semi non statutory. It was regarded by this act and had some statutory flavour in its operations and functions. There was a formal transfer of the undertaking from the Government to government company and therefore it was regarded as the “alter ego” of the central government. The control of the government over the corporation was large within the act. Further, it was observed that a body belongs to the public authority because it performs public functions and duties and carries out transactions for the benefit of the state.
- The court also observed that the expression “other authorities under the control of the Government of India” was plain and there was no reason to make exclusions on sophisticated grounds like the legal person must be a statutory corporation, must have power to make laws, etc.
REFERENCE CASES
- In “Sukhdev vs Bhagatram” three statutory bodies present i.e. LIC, ONGC and Finance Corporations were held to become “authorities” and therefore fall within the “State” under Article 12. These corporations don't have independent personalities under law but that doesn’t mean they aren’t subject to the government or they aren't instrumentalities of the government. Further, they were also performing functions that were very close to the ones performed by the government or sovereign.
- In “Ramana Dayaram Shetty v. International Airport Authority of India” the international airport authority was held to be an authority. The supreme court also developed a general proposition that the instrumentality or agency of the government would be considered as a “state” under Article 12.