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The Companies Act, 1956
Article 226 in The Constitution Of India 1949
Lekhraj Satramdas, Lalvani vs Deputy Custodlan-Cum-Managing ... on 4 May, 1965
Southern Roadways Private Ltd vs Union Of India And Another on 16 January, 1962
The Specific Relief Act, 1963

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Karnataka High Court
Suryanarayana (H.) vs Hindustan Machine Tools Ltd. (By ... on 4 February, 1966
Equivalent citations: 1966 (12) FLR 413, (1967) ILLJ 49 Kant, (1966) 1 MysLJ
Author: P Hedge
Bench: K Bhimayya, K Hegde

ORDER

Per Hedge, J.

1. The petitioner joined the Machine Tools Factory, a concern under the management of the Government of India, in 1952 as a clerk. In 1953, "Hindustan Machine Tools, Ltd." to be hereinafter referred to as the company was registered as a private limited company under the Indian Companies Act, 1913. The Government of India made over the Machine Tools Factory to the company. Originally, there were seven shareholders in the company. They were :

(i) President of India,

(ii) Secretary, Ministry of Production,

(iii) Joint Secretary, Ministry of Production,

(iv) Joint Secretary, Ministry of Finance,

(v) Deputy Secretary, Ministry of Production,

(vi) Under Secretary, Ministry of Production, and

(vii) Oerlikon Machine Tools Works, Buchrle & Co., Zurich (Switzerland).

2. We understand that the shares of Buchrle & Co. had been purchased by the President of India. At present, all the shares of the company are held in the name of the President of India and some of the Secretaries to the Government of India. It is not disputed that the entire share capital was subscribed from the consolidated funds of India. The company is managed by a board of directors. All the directors are appointed by the President. They are paid such salary and/or allowance as the President may from time to time determine. The directors are empowered to allot or otherwise dispose of the share of the company to such persons on such terms and conditions and at such time as the directors think fit. But, this power is subject to such direction as the President may be pleased to give. The company has a right to pay commission for the sale of shares. It has the duty to issue share certificates. It can call upon the members in respect of any money unpaid on their shares. The shares can be forfeited. Subject to the approval of the President, the directors may, with the sanctions of the company in general meeting, increase the share capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe. The right of members to transfer their shares are restricted as follows :

(a) A share may be transferred by a member or other persons entitled to transfer to a person approved by the President.

(b) Subject to aforesaid, the directors may, in their absolute and uncontrolled discretion, refuse to register any proposed transfer of shares.

3. Articles of association provide for general meeting as well as extraordinary meetings. Resolutions before general meetings are decided by voice. But, the number of directors is determined by the President. As seen earlier, they are appointed by the President. In the articles of association, there is provision for creating a reserve fund, declaring dividends, as well as interim dividends, payment of bonus, etc. From a perusal of the article of association, it is seen, that by and large, the duties and rights of the company are similar to those of other private limited companies, registered under the Companies Act. But, in several respects the President of India had overriding powers. The Government of India has also been given certain powers such as the right to appoint auditors.

4. Memorandum of association of the company lays down the object of the company in clause III thereof. Among other things, the memorandum says that one of the object of the company is to carry on in India and elsewhere the business of iron masters, steel makers, steel converters, iron founders, tinplate makers, colliery proprietors, miners, manufactures of ferro-manganese contractors, merchants, importers, exporters and farmers in all their respective branches. The company has also right to acquire and hold shares in any other company having objects, altogether or in part, similar to those of the company. It has right to acquire or take over with or without consideration and carry on the business of managers, secretaries, treasures and agents or managing agents by themselves or in partnership with other companies or partnerships or concerns whose objects may be similar, in part or in whole, to those of the company. It can also carry on any other trade or business which may be conveniently carried on in connexion with any of the company's objects or calculated directly or indirectly to enhance the value of or render profitable any of the company's property or rights.

5. The control and managements of the Machine Tools Factory was transferred to the company on 1 March, 1953. Even before that transfer, the Government of India notified to the employees of the Machine Tools Factory their decision to transfer that factory to the company. It called upon the employees to state in writing whether they agree to the termination of their services under the Government of India with effect from 1 March, 1953 and whether they will be willing to serve under the company with effect from the date under terms and conditions of service as the company may prescribe, which however were not expected to be substantially different from the service under the Government. The employees were further called upon to fill the attached forms and return the same to the general manager of the Machine Tools Factory. The employees were also informed that in case the offer of service under the company was not acceptable to them, due to notice of termination of service would be served on them immediately. The petitioner accepted the offer in question. Thereafter, he was appointed by the company as a lower division clerk as per its communication No. MPY/101/(1)/52/1173/53, dated 2 April, 1953. From the above, it is clear that ever since 2 April, 1953, the petitioner was employee of the company and not that of the Government of India.

6. After 1961, the company started several other units. It started a watch factory in Bangalore near the Machine Tools Factory. Further three more machine tools factories were started, one at Kalamassery in Kerala State, another at Hyderabad and the third one at Punjab. All these factories are owned and managed by the company. On 10 September, 1965, the joint general manager of Hindustan Machine Tools-IV, Kalamassery, informed the managing director of the company, that he was in urgent need of a junior officer for his purchase department. In his letter, he mentioned :

"In the last two year we had advertised and interviewed many candidates and so far we have not been able to find a satisfactory candidate. A man with some experience in HMT-I and II and who has also worked on planning or project side would be ideal for this post. It is suggested that one of the senior superintendents of Bangalore may be transferred to Kalamassery against this vacancy.

Of all the staff of this category in Bangalore, it is considered that H. Suryanarayana, superintendent, projects section, would be most suitable to fill in the post since he has the necessary background and is most probably the senior man. It is understood that he is willing to be transferred to HMT-IV.

The managing director is kindly requested to accord sanction for the permanent transfer of H. Suryanarayana, superintendent, Projects section, HMT I and II, Bangalore, to HMT-IV, Kalamassery, on his present pay and pay-scale, on the usual terms and conditions of transfer."

7. At this stage, it may be mentioned that by 1965 the petitioner had become the superintendent of the project section. It is said that the managing director accepted the proposal made by the joint general manager and directed the transfer of the petitioner from Bangalore to Kalamassery. In pursuance of that direction, the Chief Engineer (Projects) ordered the transfer of the petitioner from Bangalore to Kalamassery. As that is the impugned order, we shall quote the same in full. A copy of that order is marked as Ex. B in this case. It read thus :

"HINDUSTAN MACHINE TOOLS, LTD.

Registered Office.

Bangalore-31, India.

Telephone : 25134

Telegrams : 'HINDTOOLS.' No. CEP/Pera/G5. Date : 16 - 9 - 1965.

H. Suryanarayana, Superintendent,

Projects section, HMTL.

Dear Sir,

We are pleased to informed you that you have been permanently transferred to the Hindustan Machine Tools, Ltd., Kalamassery, with immediate effect on the following terms and conditions :

1. You will draw a basic pay of Rs. 475 (rupees four hundred and seventy-five only) in the pay-scale of Rs. 350-25-600 without affecting the next date of increment.

2. You will be eligible for a special pay of Rs. 18 per month subject to the following terms and conditions :

(i) Rs. 5 will be deducted from the special pay if you are absent on casual or sick leave and leave without pay. In addition Rs. 13 will be deducted from the special pay for absence on leave without pay and allowances.

(ii) The special pay of Rs. 18 will be admissible till such time you are either promoted to a higher grade or a bonus scheme is introduced in the Kalamassery Machine Tools Factory whichever is earlier.

(iii) Your period of service in HMT, Bangalore, will count in the Kalamassery factory for the following purposes :

(1) Provident fund.

(2) Leave account.

(3) Gratuity scheme when introduced in the Kalamassery factory.

(4) Your seniority of service in the Kalamassery factory will be counted as per the rules of Kalamassery factory.

(5) Till the time you report for duty at Kerala, you and your family will be entitled to refund of medical expenses as per the rules in HMT, Bangalore. On transfer you and your family members will be eligible for medical facilities as per the rules of HMT-IV, Kalamassery.

(6) On transfer to Kerala you will be entitled to travelling expenses as per existing rules of HMT, Bangalore.

(7) Your lien on your post in HMT, Bangalore, is hereby removed.

(8) Your contractual obligations, if any, with Hindustan Machine Tools, Ltd., will continue to be in force."

8. On receipt of this order, the petitioner represented his grievances to the managing directors as per his letter dated 16 September, 1965. In that letter, informed the managing director that due to various domestic difficulties, such as the ailment of his mother and wife, the necessity to look out for a bridegroom for his sister and the need to look after the management of the paternal property, he would be put to great difficulties if his transfer of Kalamassery is insisted upon. He would-up that letter with these words :

"In view of the above compassionate grounds, I would request you kindly to hold back the order at least for one year from now, so that by then I could settle most of the above problems.

If for reason of work interest in view of the emergency, I would be even prepared for a deputation for a short period commencing from 18 October, 1965, or even little earlier.

I would be grateful for your sympathetic consideration."

9. In reply to the above communication the Chief Engineer (Projects) informed the petitioners by his letter dated 18 September, 1965 that his transfer is effected in view of the work requirement of HMT-IV where his presence is urgently and absolutely necessary. He was further informed :

". . . While we realize your domestic difficulties, we are unable to reconsider our decision.

You will appreciate that in the interest of company's work, other considerations have to be treated secondary and borne with.

You will be relieved of your duties on Monday, 20 September, 1965, and you should report for duty to the Joint General Manager, HMT-IV, Kalamassery, on or before 27 September, 1965."

10. Therefore, the petitioner filed the present writ petition under Art. 226 of the Constitution on 11 October, 1965. In this petition, he has requested this court to grant him two reliefs, viz. -

"(a) to issue a writ of certiorari quashing the impugned order of transfer dated 16 September, 1965 issued by respondent 2; and

(b) to issue a writ of mandamus and/or any other writ or direction as the case may be to the respondents to continue him in his present place a Bangalore factory and not to transfer him to Kalamassery factory."

11. It is not necessary to refer to the interim and consequential relief prayed for by him.

12. The transfer order is challenged on four different grounds. They are :

(1) As early as on 16 April, 1961, the then managing director of the company had written to the general manager setting out the policy regarding recruitment of employees to the watch factory and other units of the Machine Tools Factory to be set up by the company. As per the policy laid down, the factories to be set up by the company are to be treated as separate units; for the purpose of recruitment of the full quota of the staff for those units, they have to be made in the local regions separately. According to the petitioner, the letter further stated that when the staff from the parent organization is to be transferred permanently, to any other unit, it should be preferably on promotion and if temporarily, it should be on deputation with allowances whenever such a staff can be spared and is willing to be transferred to the new units.

(2) The standing orders for the employees of the company do not provide for transfer of employees from one factory to another factory. Therefore, the company has no power to transfer the petitioner from Bangalore to Kalamassery.

(3) The transfer is question is liable to be struck down as the same was made for for collateral reasons.

(4) The Chief Engineer (Projects) has no authority to transfer an employee from one unit to another unit.

13. The respondent, in the counter-affidavits filed on their behalf, have not only controverted the grounds urged by the petitioner-in-opposition to the transfer order, in addition they have raised a preliminary objection that the relief prayed for by the petitioner cannot be granted under law. According to them, the impugned order of the transfer is neither a judicial order nor a quashi-judicial order and hence, the petitioner cannot invoked the certiorari jurisdiction of this court. They further contend that he is also not entitled to ask for a writ of mandamus as the company is neither a public authority nor the order complained of was made in discharge of any public duty.

14. By means of an interlocutory application, the petitioner sought and obtained the permission of the Court to urge that the reliefs prayed for by him, if for any reason cannot be granted, under Art. 226 of the Constitution, the same may be granted to him under S. 45 of the Specific Relief Act, as in force in Mysore. But, at the same time of the arguments, Sri S. K. Venkataranga Ayyangar, the learned counsel for the petitioner, gave up that contention, in view of the fact that that selection is no more in the statute book.

15. A writ of certiorari can be issued only to correct a judicial or quasi-judicial order. Our attention has not been drawn to any provision of law or for that matter even to an administrative rule requiring the authorities concerned to act judicially, in the matter of transferring a company's servant from one place to another. All that was said on behalf of the petitioner was, that neither the general manager nor the Chief Engineer (Project), was competent to transfer the petitioner from Bangalore to Kalamassery. That question we shall consider separately. But, that contention does not bear on the question, if the transfer order is a judicial or a quasi-judicial order. It is now well-settled that before a writ of certiorari can be issued, the Court must be satisfied that the authority which made the impugned order had a duty to act judicially in making that order - see the decision of the Supreme Court in Nagendra Nath Bora v. Commissioner of the Hills Division and Appeals, Assam, and Others and Board of High School and Intermediate Education, Uttar Pradesh, Allahabad v. Ghanshyam Das Gupta . Hence, on the facts of this case, no writ of certiorari can be issued.

16. We shall now consider whether on the facts established, the writ of mandamus prayed for the petitioner can be issued.

17. In Printer (Mysore) (Private), Ltd. v. Union of India (Writ Petition No. 1054 of 1965), this Court was called upon to examine the circumstances under which a writ of mandamus can be issued. Therein this Court laid down :

"It is a firm rule of law that mandamus is only issued against some one, who holds a public office and the direction issued by the Court should relate to some public duty pertaining to his office. It is judicial remedy which is in form an order from a superior Court to any Government, Court, corporation or public authority to do or to forbear from doing some specific act which that body is obliged to do under law to do or to refrain from as the case may be and which is in the nature of a public duty and in certain cases of a statutory duty. Before this Court issues any order in the nature of a mandamus, it must be satisfied that the command to be made by this Court pertains to the office of the persons to whom the command is addressed and the same is in the nature of a public duty. Such a command cannot ordinarily be addressed to a private individual."

18. From that decision it follows that before the writ of mandamus prayed for in this petition can be issued, the Court must be satisfied on two points, viz. -

(i) the managing director of the company under whose directions the impugned order of transfer was issued is a public authority; and

(ii) the impugned order of transfer relates to a public or statutory duty pertaining to his office.

19. It was urged on behalf of the petitioner that the managing directors of the company is a public authority. The petitioner's reasons for so contending are : the entire capital of the company was subscribed from the consolidated fund of the Union of India; all its directors including the managing directors are the appointees of the President of India; directions issued by the President are binding on the directors; the auditors of the company are appointed by the Central Government. On the basis of the articles of association, to some of which we had occasion to refer earlier, it was contended by Sri S. K. Venkataranga, Ayyangar, the learned counsel for the petitioner, that the company in question is a Government company; it is an agent of the Central Government; in reality it is a departmental of the Government; and therefore it is a public authority. In support of this contention of his, he placed strong reliance on the decision of the Madras High Court in V. Ramaiah v. State Bank of India [1963 - II L.L.J. 304] as well as on the decision of the Calcutta High Court in Madan Mohan Sen Gupta v. State of West Bengal .

20. In the former case, the Madras High Court came to the conclusion that the State Bank of India is a public authority. In the latter case, the Calcutta High Court came to the conclusion that a co-operative society registered under the Bengal Co-operative Societies Act, 1940, is a public authority. There is no doubt that there are observations in these judgments which support the contention of the petitioner. These decisions take the view that in deciding the true character of a person or authority against whom a writ of mandamus is asked for, the Court should lift the veil and look at his or its real face and thereafter decide whether the entity in question is a public authority or not. The view expressed in these decisions finds support from several other decisions as well.

21. On the other hand Sri M. K. Nambiar, the learned counsel for the respondents laid stress on the fact that the company is registered as a private limited company under the Indian Companies Act, 1913; it is managed by a board of directors; subject to the directions given by the President the entire management vests with the board of directors; the powers exercised by them are real and not nominal; the shares of the company can be sold to outsiders and in fact at one time a foreign company was its shareholder; the shares are transferable, no doubt subject to certain limitations; the company can declare dividends, and it has to make provision for a reserve fund. He urged that despite the fact that the President has large powers in the matter of administration of the company, both in law and in fact, the company is a private limited commercial undertaking; and by and large, it has all the rights and duties of a private limited company. Hence, he urged that it is not right to consider the company as a public authority. In this connexion he placed strong reliance on the decision of the Court of Appeal in Tamlin v. Kannaford [(1948) 2 All E.R. 327]. This is what Denning, L.J., who spoke for the Court in that case, observed during the course of his judgment :

"The Transport Act, 1947, brings into being the British Transport Commission, which is a statutory corporation of a kind comparatively new to English law. It has many of the qualities which belong to corporation of other kinds of which we have been accustomed. It has, for instances defined powers which it cannot exceed and it is directed by a group of men whose duty it is to see that those powers are properly used. It may own property, carry on business, borrow and lend money, just as any other corporation may do, so long as it keeps within the bounds which Parliament has set, but the significant difference in this corporation is that there are no shareholders to subscribe the capital or to have any voice in its affairs. The money which the corporation needs is raised, not by the issue of shares, but by borrowing, and its borrowing is not secured by debentures, but is guaranteed by the treasury. If it cannot repay, the loss falls on the consolidated fund of the United Kingdom, that is to say, on the tax-payer. There are no share-holders to elect the directions or to fix their remuneration. There are no profits to be made or distributed. The duty of the corporation is to make revenue and expenditure balance one another, taking, of course, one year with another, but not to make profits. If it should make losses and be unable to pay its debts, its property is liable to execution, but it is not liable to be wound-up at the suit of any creditor. The tax-payer would, no doubt, be excepted to come to its rescue before the creditors stepped in. Indeed, the tax-payer is the universal guarantor of the corporation. But for him it would not have acquired its business at all, nor could it now continue it for a single day. It is his guarantee that has rendered charge, debentures and such like all unnecessary. He is clearly entitled to have its interest protected against extravagance or mismanagement.

There are other persons who have also a vital interest in it affairs. All those who use the services which it provides - and who does not - and all whose supplies depend on it - in short, everyone in the land - is concerned in seeing that it is properly run. The protection of the interests of all these - tax payer, user and beneficiary - is entrusted by Parliament to the Minister of Transport. He is given powers over this corporation which are as great as those possessed by a man who holds all the shares in a private company, subject, however, as such a man is not, to duty to account to Parliament for his stewardship. It is the Minister who appoints the directors - the members of the Commission - and fixes their remuneration. They must give him any information he wants, and, lest they should not prove amenable to his suggestions as to the policy they should adopt, he is given power to give them directions of a general nature in matters which appear to him to affect the national interest, as to which he is the sole judge, and they are then bounds to obey. These are great powers, but still we cannot regard the corporation as being his agent, any more than a company is the agent of the shareholders or even of a sole shareholder. In the eye of the law the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a Government department nor do its powers fall within the province of Government."

22. The decision in Tamlin case [(1948) 2 All E.R. 327] (vide supra) has been quoted with approval by the Supreme Court in Andhra Pradesh State Road Transport Corporation v. Incometax Officer . The view taken in Tamlin case [(1948) 2 All E.R. 327] (vide supra) has been accepted as the correct view of the law by the Patna High Court in Subodh Ranjan Ghosh v. Sindri Fertilizers and Chemicals, Ltd., and Another [1957 - II L.L.J. 686]. The Madras High Court in Lakshmi v. Neyveli Lignite Corporation, Ltd., [1965 - II L.L.J. 672], has also taken the same view. The Neyveli Lignite Corporation, Ltd., against which a writ was asked for it an undertaking somewhat similar to the company. The High Court held that no relief under Art. 226 can be granted against it. That decision proceeds on the basis that the undertaking in question is not a public authority.

23. Our State is a welfare State. Governments at the Centre and the States are increasingly interesting themselves in commercial and industrial undertakings with a view to increase the well-being of the public. Some of those undertaking are managed by Government departments, yet others are being managed by corporations which are guided and controlled by Governments, yet in others, the Governments have controlling interests. In Tamlin case [(1948) 2 All E.R. 327] referred to above, the question whether a writ could be issued against the British Transport Commission did not arise for consideration. The only question decided was that the property owned by that commission is not the property of the Crown. From that decision it does not follow that the Commission in question is not an instrumentality of the Government. The question whether the company is a public authority or not is a highly debatable one. We are of the opinion that the law on that subject has not yet crystalized itself. As we are of the opinion that the impugned order does not relate to any public or statutory duty to be discharged by the company or its managing director, there is no need to pronounce on the question whether the company or its managing director is a public authority.

24. Now we shall take up the question whether the impugned order relates to some public or statutory duty pertaining to the office of the managing director of the company, that being as essential pre-requisite for issuing the writ prayed for. As observed by the Supreme Court in Lekhraj Sathramdas Lalvani v. N. M. Shah, Deputy Custodian-cum-managing Officer, Bombay, and Others a writ of mandamus may be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge that statutory obligation; the chief function of the writ is to compel the performance of public duties prescribed by statue and to keep the subordinate tribunals and officers exercising public functions within the limits of their jurisdiction. That decision further laid down that any duty or obligation falling upon a public servant out of a contract entered into by him as such public servant cannot be enforced by the machinery of a writ under Art. 226 of the Constitution. Therefore, we have to see whether there was any statutory obligation on the part of the managing director of the company not to transfer the petitioner out of Hindustan Machine Tolls-I.

25. On behalf of the respondents, it was contended that the petitioner was appointed on the basis of a contract; even at the time the contract of service was entered into between the company and the petitioner, it was within the contemplation of the company as seen from its memorandum of association, to start other establishments under its management in the country as well as outside; therefore the company's right to transfer the petitioner to one or the other of its establishments outside Bangalore must be held to be an implied term of the contract. At any rate, it was said on behalf of the company that so long as there is no low prohibiting the transfer of the petitioner outside Bangalore, this Court's extraordinary jurisdiction cannot be invoked.

26. The learned counsel for the petitioner did not join issue with the contention of the respondents that before this Court can issue the writ mandamus prayed for, the petitioner must show that he has a statutory right it compel the management of the company not to transfer him out of Hindustan Machine Tools-I. But, according to him, the petitioner's conditions of service are regulated by the Industrial Employment (Standing Orders) Act, 1946, to be hereinafter referred to as the Act; those standing orders must be considered to have statutory force; there is no provisions in those standing orders permitting the management of the company to transfer employees from one place to another; and therefore, in ordering the transfer of the petitioner the management contravened the standing orders which contravention confers on him the right to invoke the extraordinary jurisdiction of this Court. Is this contention well-founded ?

27. As seen earlier, the petitioner's appointment was on the basis of an officer and acceptance. The petitioners' appointment order reads this :

"HINDUSTAN MACHINE TOOLS, LTD.,

Jalahalli P.O. Bangalore

Ref. 101(1)/53/1175/53. Dated 2 April, 1953.

H. Suryanarayana, No. 870,

III Cross Road, Srirampur, Bangalore-3.

Dear Sir,

With reference to your letter dated 9 March, 1953 we have pleasure to appoint you as lower division clerk, in the services of the company with effect from 1 March, 1953, on the same terms of pay, scale increment, allowances, etc., as you were drawing in the service of the Government of India Machine Tool Factory.

It may be noted that you will have to abide by rules and regulations of the company in force from time regarding conduct, discipline, leave, provident fund, etc., for its employees.

Your continued service with the company will depend upon the satisfactory execution of your duties and your services are liable to be terminated by a month's notice on either side.

Yours faithfully,                    

For Hindustan Machine Tools, Ltd.,      

(Sd.) H. D. DEENGAJI, For Managing Director."

28. All that that order says is that he is appointed as a lower division clerk in the services of the company. It is clear that the petitioner's service in the company commenced in pursuance of a contract. Thus far there is no controversy. Therefore, what we have to see is whether that character changed because of the standing orders ? Admittedly, in those standing orders there is no reference to the petitioner's pay-scale, his right to promotion, the bonus to which he is entitled to, and his right to pension, provident fund or gratuity. These are undoubtedly important features of the conditions of service of a workman. Hence, it cannot be said that the standing orders are a complete code as regards the conditions of service of the company's workmen. It is not the petitioner's case that there is any prohibition of transfer of employees in the standing orders in question. What is said is that those orders do not authorize any transfer. We are of the opinion that the petitioner has misunderstood the scope of the standing orders. Those orders merely deal with matters enumerated in the schedule to the Act. The Act requires the employer to define and lay down in clear terms the conditions of work in his industrial establishment in respect of the matters enumerated in the schedule. The purpose of the standing orders is a modest one. Those orders do not claim to regulate the conditions of service of workmen under any particular employer.

29. We are also unable to agree with the petitioner that the standing orders are in any sense, "law". They are more in the nature of agreement between an employer and his employees. The dispute between an employer and his workmen in the matter of finalizing the standing orders is resolved through the machinery created under the Act. The long title to the Act says that it is an Act to require employers in industrial establishments formally to define conditions of employment under them. Its preamble says :

"Whereas it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them".

30. What is required to be precisely defined is the conditions of employment - not conditions of service and that in a particular establishment. The Act in question does not call upon the employers to define the conditions of service of their employees by means of standing orders. What is requires them to do is to define their conditions of employment in the industrial establishments in which they are working. This position is made further clear by Sub-section (3) of S. 1, which reads :

"It applies to every industrial establishment wherein one hundred or more workmen are employed, or were employed on any day of the preceding twelve months, and to such class or classes of other industrial establishments as the appropriate Government may from time to time, by notification in the official gazette, specify in this behalf."

31. Sections 3(1) and 3(2) of that Act also bear on the points under consideration. The provisions therein read :

"(1) Within six months from the date on which this Act becomes applicable to an industrial establishment, the employer shall submit to the certifying officer five copies of the draft standing orders proposed by him for adoption in his industrial establishment. (2) * * *

(3) Provisions shall be made in such draft for every matter set out in the schedule which may be applicable to the industrial establishment, and where model standing orders have been prescribed, shall be, so far as practicable, in conformity with such model."

32. Section 4 of that lays down the conditions for certification of standing orders. That section says :

"Standing orders shall be certifiable under this Act if -

(a) provision is made therein for every matter set out in the schedule which is applicable to the industrial establishment, and

(b) the standing orders are otherwise in conformity with the provisions of this Act;

and it shall be function of the certifying officer or appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing orders."

33. After the receipt of the draft standing orders, the certifying officer has to notify the same to the workmen concerned either through their trade union or through their representatives. The workmen have a right to object to the draft submitted. Their objections have to be considered by the certifying officer. If the management and the employees are not agreed on one or more of the draft standing orders, the certifying officer has the power to modify them suitably. A right of appeal is provided against the order of the certifying officer. From a reading of the provisions of the Act, it is clear that it does not impose any duties or confer any rights either on the employers or on their employees. All that it does is to require the employers to prepare draft standing orders relating to conditions of employment in their industrial establishments. The concerned employees are given right to object to the draft standing orders. If the employees do not agree to the draft standing orders submitted by the employer, the certifying officer has to decide the dispute. The decision, given by the certifying officer or the appellate authority are quasi-judicial decisions. Those officers do not lay down any law. They merely decide the dispute between the parties. Hence we are unable to agree with Sri Ayyangar that the standing orders are either legal provision or that they have any force of law. Our conclusion in this regard receives further support from the matters listed in the schedule to the Act. All of them relate to the conditions of work in an industrial establishment.

34. For the reasons mentioned above, we are unable to agree with the petitioner that the impugned order of transfer was made by the managing director of the company in discharge of any public or statutory duty imposed on him. Hence, we are of the opinion that the petitioner is not entitled to the writ of mandamus prayed for by him.

35. The respondents do not deny the petitioner's averments as regards the policy said to have been laid down by one of the previous managing directors in the matter of recruitment of employee to the various units of the Hindustan Machine Tools as per his letter to the general manager, dated 16 April, 1961. We had already set out the substances of the same earlier. That policy appears to be a sound one, conceived in the best interest of the employees of the company. It is bound to be conducive to good relationship between the company and its employees. Further adherence to that policy would greatly reduce the possibility of harassment of the employees. In the long run that policy is in the interest of the company itself. It is for the management to see whether they should not apply that policy to the petitioner's case as well. Sri Nambiar informed us that the company is contemplating to promote the petitioner and put him in a position, not less advantageous, financially, than present. That is as it ought to be. But, we are unable to agree with the petitioner that the policy laid down has the force of law. That policy was laid down for the guidance of the subordinates. It has no permanency about it. It may change from managing director to managing director. No employee can compel the managing director to adhere to that policy. In other wards, the policy laid down does not confer any right on the employees. The managing director is not bound by it at all. It merely gives certain administrative direction to be obeyed by the subordinates of the managing director. A disobedience of that direction even by subordinate officials cannot be made justiciable. Therefore, the petitioner cannot claim any relief on the basis of the said policy.

36. We have already examined and rejected the petitioner's contention that the impugned transfer is impermissible under the standing orders. Hence no more need be said about that contention.

37. There is no substance in the contention that the petitioner was transferred to Kalamassery for collateral reasons. The facts set out earlier clearly militate against that contention. It is regrettable that there is an increasing tendency to make unfounded allegations of mala fides in petitions involving this Courts extraordinary jurisdiction. We have more than once started that unfounded accusations of mala fides will not be countenanced by this Court and that this Court will not hesitate to refuse the relief prayed for solely on the ground that the petition contains unfounded allegations of mala fides. We should like to repeat that warning once again. We should like to make it clear that even if we had come to the conclusion that the petitioner was entitled to the reliefs prayed for in this petition, we would have declined to grant them in view of the unfounded allegations of mala fides made against the respondents.

38. From the materials placed before us, it is clear that the Chief Engineer (Project) had issued the impugned order of transfer at the instance of the managing director. In other words, the Chief Engineer was clearly carrying out the orders of the managing director. Therefore, the validity of the transfer order cannot be challenged on the ground that the Chief Engineer was incompetent to make the same.

39. In the result, this writ petition fails and the same is dismissed.

40. Though, we should have directed the petitioner to pay the costs of this petition, in view of his unfounded allegations of mala fides against the managing director of the company, we refrain from doing so, bearing in mind the circumstances which compelled him to approach this Court.

41. Parties will bear their own costs.