Case Note & Summary
This appeal before the Supreme Court arose from an election petition filed by the appellant, an unsuccessful candidate for the Mysore Legislative Assembly from Bhadravati constituency, challenging the election of respondent No. 1 on the ground of disqualification under Article 191(1)(a) of the Constitution. The respondent No. 1 was employed as Superintendent in the Safety Engineering Department of Mysore Iron & Steel Works Ltd., a company in which the State Government held the entire share capital. The principal issue was whether this employment constituted holding an office of profit under the State Government, thereby disqualifying him from being a member of the Legislative Assembly. The High Court dismissed the election petition, leading to this appeal under Section 116A of the Representation of the People Act, 1951. The essential facts established that respondent No. 1 had initially joined the Mysore Iron & Steel Works in 1936 when the undertaking was directly managed by the Government as its own concern. In 1962, the undertaking was taken over by a newly incorporated private limited company, and the employees, including respondent No. 1, were continued in their positions without fresh contracts. The Government owned all shares and had significant control over the board of directors and management. The appellant contended that respondent No. 1 continued to be a government servant even after the takeover because the company was merely a veil for the Government, and in the alternative, that even if technically an employee of the company, he held an office of profit under the Government due to extensive governmental control. The Supreme Court rejected both contentions. It held that upon the transfer of the undertaking as a going concern, by operation of law under Section 25FF of the Industrial Disputes Act, 1947, the employees became employees of the company, which was a distinct legal entity separate from the Government. Consequently, respondent No. 1 ceased to be a government servant. The Court emphasized that the appointment, dismissal, control over duties, and determination of remuneration of the employee vested in the company and not in the Government. It drew a distinction between disqualification for presidential elections, which encompassed offices under authorities controlled by the Government, and for legislative elections, which was limited to offices directly under the Government. The Court further noted that Section 10 of the Representation of the People Act, 1951, which specifically disqualifies managing agents, managers, or secretaries of government companies, indicated that Parliament did not intend to disqualify all employees of such companies. Thus, the mere exercise of governmental control over a company does not render its employees holders of offices of profit under the Government for purposes of legislative membership. The appeal was dismissed, and the election of respondent No. 1 was affirmed.
Headnote
A) Election Law - Disqualification of Candidate - Office of Profit Under Government - Constitution of India, 1950 Arts. 102(1)(a) and 191(1)(a), Representation of the People Act, 1951 s.10 - Respondent No. 1 was employed as Superintendent in a company wholly owned by the State Government. The company was a distinct legal entity separate from the Government. The transfer of the undertaking from the Government to the company resulted in respondent No. 1 becoming an employee of the company and ceasing to be a government servant, supported by the application of Section 25FF of the Industrial Disputes Act, 1947. The Government's control over the company did not make every employee a holder of an office of profit under the Government. Section 10 of the Representation of the People Act, 1951 indicates that only managing agent, manager or secretary of a government company are disqualified, implying ordinary employees are not covered by the constitutional disqualification. Held, the appeal was dismissed and the election upheld. (Pages 429E-F, 430B, 435D-H). B) Constitutional Law - Office of Profit Under Government - Scope of Disqualification - Constitution of India, 1950 Arts. 102(1)(a) and 191(1)(a) - The power to appoint and dismiss respondent No. 1 did not vest in the Government or any Government servant; the power to control the performance of his duties and determine his remuneration lay with the company. The mere fact that the Government controlled the company through its shareholding and could issue directions to the directors did not mean the employee held office under the Government. The distinction between disqualification for election as President/Vice-President (includes office under local or other authority controlled by Government) and for Legislatures (limited to office directly under Government) reinforces that employment by a government-controlled company does not disqualify a candidate for legislative membership. (Pages 433F, 434H, 435A-C).
Issue of Consideration
Whether respondent No. 1 was disqualified under Article 191(1)(a) of the Constitution from being chosen as a member of the Mysore Legislative Assembly because he was holding an office of profit under the State Government on the date of scrutiny?
Final Decision
The Supreme Court upheld the High Court's decision, dismissing the appeal. It held that respondent No. 1 was not disqualified under Article 191(1)(a) because he was not a government servant and did not hold an office of profit under the State Government. The company, though wholly owned by the Government, is a distinct legal entity; the transfer of the undertaking resulted in respondent No. 1 becoming an employee of the company under Section 25FF of the Industrial Disputes Act, 1947. The Government's control over the company did not make every employee a holder of office of profit under the Government. Section 10 of the Representation of the People Act, 1951 further supported the conclusion that ordinary employees of government companies are not disqualified.
Law Points
- Legal points not extracted
- A person holding an office in a government company does not hold an office of profit under the government for purposes of Article 191(1)(a)
- the government's control over a company does not make its employees government servants
- transfer of undertaking to a company makes employees employees of the company under Section 25FF of the Industrial Disputes Act
- 1947
- Section 10 of the Representation of the People Act
- 1951 limits disqualification to managing agent
- manager or secretary of a government company with 25% shareholding implying other employees are not covered
- the holding of an office of profit under a corporate body like a local authority does not bring about disqualification even if the local authority is under the control of the government
