The Karnataka High Court has ruled that the Central Government, not the State, holds authority over Bengaluru Metro (BMRCL), declaring it a “railway company” under Central laws and striking down State-issued employee and service regulations.
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BENGALURU: In a landmark decision that reshapes the legal framework governing metro rail corporations in India, the Karnataka High Court ruled that the Central Government, not the State Government, is the “appropriate government” for the Bengaluru Metro Rail Corporation Limited (BMRCL) under the Industrial Disputes Act, 1947.
The case, BMRCL Employees’ Union v. State of Karnataka, is a crucial ruling clarifying the jurisdictional divide between the State and Central Governments over metro employees’ industrial relations and service regulations.
Background of the Case
The Bangalore Metro Rail Corporation Limited (BMRCL), popularly known as Namma Metro, is a joint venture between the Government of India and the Government of Karnataka, each holding 50% equity.
Although incorporated under the Companies Act, 1956, BMRCL’s operations are governed by Central legislation, the Metro Railways (Construction of Works) Act, 1978, and the Metro Railways (Operation and Maintenance) Act, 2002, which grant extensive powers to the Union Government regarding construction, safety, and operation of metro services.
The legal dispute began when the BMRCL Employees’ Union questioned the State Government’s authority to regulate metro employees’ service conditions and labor disputes.
Between 2014 and 2019, the State Government issued several notifications and rules affecting BMRCL employees:
- BMRCL Employees (Conduct, Discipline and Appeal) Rules, 2014
– Approved by the State Government; governed employee conduct and discipline.
– The Union challenged the rules, arguing that only the Central Government had jurisdiction. - Notification dated July 7, 2017
– Declared BMRCL services as essential services under the Karnataka Essential Services Maintenance Act, 2013 (KESMA), prohibiting strikes.
– The Union contended that KESMA excluded railways, and metro operations are a Central subject under the Union List. - Notification dated November 18, 2019
– Declared BMRCL as a public utility service under Section 2(n)(vi) of the Industrial Disputes Act, 1947.
– The Union again argued that this power lay only with the Central Government.
Simultaneously, the Central Government began issuing its own orders, referring industrial disputes to the Central Government Industrial Tribunal (CGIT) and designating 12 union leaders as protected workmen.
BMRCL challenged these Central orders, arguing that the State Government was the competent authority.
This conflicting stance led to six writ petitions being heard together before Justice Hegde.
Issues Before the Court
Justice Hegde framed three key legal questions:
- Which is the “appropriate government” for BMRCL in relation to industrial disputes?
- Whether the State Government can declare BMRCL services as public utility or essential services?
- Whether BMRCL qualifies as a “railway company” under Section 2(o) of the Industrial Disputes Act, 1947?
Arguments by the Parties
Petitioners (BMRCL Employees’ Union):
- Cited Section 2(a)(i) of the Industrial Disputes Act, which assigns the Central Government as the authority for industries run by or under its authority, or by a railway company.
- Argued that BMRCL is a “railway company”, as defined under Section 3(5) of the Indian Railways Act, 1890, which includes any entity owning or operating a railway.
- Highlighted the Memorandum of Understanding (MoU) between the Centre and State, requiring Central consent for major decisions—like the appointment or transfer of the Managing Director.
- Emphasized that the Metro Railways Acts of 1978 and 2002 vest all crucial regulatory powers in the Central Government.
Respondents (State Government and BMRCL):
- Claimed that since both Centre and State hold equal equity, and since the BMRCL Board includes State ministers and secretaries, the State Government exercises pervasive control.
- Argued that the Indian Railways Act, 1890, was repealed and its definition of “railway company” is no longer relevant.
- Cited earlier Karnataka High Court judgments (Logwell Forge Ltd. v. BMRCL), which held that the State had substantial control.
- Asserted that metro railways are distinct from railways, and are governed by special State legislation.
Karnataka High Court Judgment
Justice Hegde’s 80-page judgment extensively analyzed the Metro Railways (Construction of Works) Act, 1978, and the Metro Railways (Operation and Maintenance) Act, 2002, concluding that BMRCL operates under the direct authority and supervision of the Union Ministry of Housing and Urban Affairs.
The Court highlighted that the Central Government appoints key officers, such as the General Manager and Safety Commissioner, and that no metro line can begin operation without Central sanction.
“BMRCL is a ‘railway company’ as defined under Section 2(o) of the Industrial Disputes Act, 1947, read with Section 3(5) of the Indian Railways Act, 1890. The Central Government has pervasive control over the BMRCL,”
the Court observed
Justice Hegde reaffirmed that even though the Indian Railways Act, 1890, has been repealed, its definitions incorporated into the Industrial Disputes Act continue to have effect.
“BMRCL is party to the agreement to build, operate and maintain the metro railway in Bengaluru. It is therefore a ‘railway company’ within the meaning of Section 2(o) of the Industrial Disputes Act,”
the judgment stated.
The High Court struck down two key State Government notifications and the BMRCL Employees (Conduct, Discipline and Appeal) Rules, 2014, ruling them ultra vires for lack of jurisdiction.
- The July 7, 2017, notification under the Karnataka Essential Services Maintenance Act, 2013, which prohibited metro employee strikes, was quashed.
- The November 18, 2019, notification declaring BMRCL a “public utility service” under the Industrial Disputes Act was also set aside.
Justice Hegde reasoned that railway transport is excluded from the scope of the Karnataka Essential Services Maintenance Act, 2013, and that only the Central Government could issue such notifications.
The Court invalidated the BMRCL Employees (Conduct, Discipline and Appeal) Rules, 2014, ruling that the State Government had no authority to approve or enforce these regulations. The decision affirms that only the Central Government can regulate service conditions, disciplinary proceedings, and industrial relations in BMRCL.
This reasoning distinguishes the Karnataka High Court’s approach from a Madras High Court decision on Chennai Metro, which had held that metro corporations were not “railway companies.” Justice Hegde expressly declined to follow that view, citing Supreme Court precedent in LIC v. D.J. Bahadur (1981)
The Court upheld Central Government orders referring disputes to the Central Government Industrial Tribunal and recognizing 12 union office-bearers as protected workmen. It ruled that these were validly issued by the competent Central authority.
The Court delivered a decisive verdict in favor of the BMRCL Employees’ Union, holding:
- The Central Government is the “appropriate government” for BMRCL.
- The BMRCL Employees (Conduct, Discipline and Appeal) Rules, 2014 were struck down.
- The State notifications declaring BMRCL services as essential and public utility were quashed.
- The Central Government Industrial Tribunal’s orders—including recognition of protected workmen—were upheld.
Case Title:
Bengaluru Metro Rail Corporation Limited v. Government of Karnataka
WRIT PETITION NO. 40113 OF 2017 (L-RES)
READ ORDER