Calcutta High Court
Indian Jute Industries Research ... vs Debabrata Sarkar And Ors. on 14 June, 2006
Equivalent citations: (2006)3CALLT245(HC), 2006(4)CHN741
Author: Tapen Sen
Bench: Tapen Sen
JUDGMENT Tapen Sen, J.
1. This Appeal has been preferred by the Indian Jule Industries Research Association through its Secretary-cum-Financial Controller and other officers thereof (hereinafter referred to for the sake of brevity as IJIRA) praying for setting aside the Judgment and order dated 25.11.2002 passed by a learned single Judge of this Court in W.P. No. 7822(W) of 1998 [Debabrata Sarkar v. Union of India] whereby and whereunder he was pleased to hold that the IJIRA is a "State" within the meaning of Article 12 of the Constitution of India.
2. According to Mr. Biswarup Gupta, learned senior counsel appearing for IJIRA, the Judgment is patently erroneous as none of the ingredients for purposes of applying the definition "State" are present or in existence insofar as IJIRA is concurred. According to him IJIRA is not a "State" and therefore, it is not amenable to Writ Jurisdiction.
3. Let it be recorded that similar point of fell for consideration before this Court in W.P. No. 20039(W) of 1999/AST3114 of 1999 [Rabindranath Mukherjee v. Union of India and Ors.] and by Order dated 15.5.2000, a learned single Judge of this Court held that IJIRA was "an other authority" within the meaning of Article 12 of the Constitution of India. It appears that while delivering the aforementioned Judgment, the learned single Judge was in agreement with another Judgment passed by another learned single Judge of this Court in the case of Biswajit Chakraborty v. Indian Jute Industries Research Association reported in 1992 Lab IC 1539, which had also held that IJIRA was a "State" as defined under Article 12 of the Constitution of India.
4. Let it be further recorded that similar point was argued in other writ petitions before this Court namely in W.P. No. 3538(W) of 2002 [Arindarn Banerjee v. Union of India and Ors.] and an Hon'ble single Judge of this Court while referring to the Judgments delivered in the case of Biswajit Chakraborty (supra) and Rabindranath Mukherjee (supra), held that IJIRA was a "State" within the meaning of Article 12 of the Constitution of India. It further appears that the Judgment of Rabindranath Mukherjee delivered in W.P. No. 20039(W) of 1999 (supra) was taken up in Appeal before a Division Bench vide M.A.T. No. 1876 of 2000/FMA No. 2253 of 2000. The Division Bench did not interfere with the ratio of the Judgment passed in Rabindranath Mukherjee's case in W.P. No. 20039(W) of 1999. The 5th case in which IJIRA has been held to be a "State"', is by reason of the Judgment dated 25.11.2002 which is sought to be impugned in this Appeal.
5. This therefore, is the 6th attempt of IJIRA trying to make out a case that it is not a "State" within the meaning of Article 12 of the Constitution of India. In order to substantial his claim, contrary to what has already been held in the aforementioned Judgments, learned Counsel submits that IJIRA is merely an organisation for carrying out research and development work exclusively for the benefit of the Jute Industries and it is governed by its own Memorandum of Association which would go a long way in establishing that IJIRA cannot be equated with the definition of a "State" within the meaning of Article 12 of the Constitution of India. He further submits that IJIRA is a registered society under the West Bengal Societies Registration Act, 1961 and has been registered as such on 30.3.1966. Mr. Gupta draws attention of this Court to various paragraphs of the Memorandum of Association namely paras 3(a), (f) and the list appearing at the end showing the names of persons and/or a bodies who subscribed to the Memorandum expressing their desire to form a society under the West Bengal Societies Registration Act, 1961. Mr. Gupta submits that none of these persons who subscribed in the manner stated aforesaid are linked with the Government and therefore, the society, consisting of these persons and who formed a society to promote r< search and other scientific work in the interests of the jute industries, cannot be said to be a "State" within the meaning of Article 12.
6. Before we proceed, it will be relevant to quote clauses 3(a) and (f) of the Memorandum of Association which read as follows:
3. The objects of the Association are:
(a) To promote research and other scientific work connected with the jute trade and industry and trades and industries allied with or accessory thereto; to establish and maintain laboratories, workshops and conduct experiments therein; to encourage and foster education of persons engaged in or likely to be engaged in the said trades or industries; and to maintain schools and grant scholarships connected with the purpose of the Association and to employ instructors and personnel as may be considered necessary for the said purposes and to pay remuneration to them.
(f) To accept grants of money from the Government, the CSIR and other public bodies, corporations, companies or persons for the purposes of the Association, on such conditions as may be agreed to [SIC].
7. He further draws attention to the Rules and Regulations of IJIRA and submits that under the said Rules, the "Council" means, "until the election of the first council, the signatories to the Memorandum of Association and thereafter, the council of management of the Association". The "Association" has been defined under the Memorandum as the "Indian Jute Industries' Research Association" (i.e. IJIRA). Under Regulation 2, two classes of "members" have been provided and they are (i) Primary Members who are the Jute Textile mills and (ii) the "Associate Members" who are the trades and industries allied with or accessory to the Jute Textile Mills, which pay contribution. According to Mr. Gupta a "Member" under the aforementioned Regulations, means a "proprietary concern" or a body corporate admitted to the membership of the Association in accordance with the said Rules and Regulations. Thus, for all practical purposes, Mr. Gupta submits, that neither of the two classes of members enumerated in Regulation 2 can bring IJIRA within the definition of a "State".
8. He further submits that under Regulation 15, it has been mentioned that the "Council" shall comprise of 24 persons in the following manner:
12 persons - Shall be elected by the general body of the Association from amongst the Primary Members 1 person - Shall be the Jute Commissioner or his nominee 2 persons - Shall be nominated by the Ministry of the Central Government granting funds for the Association 1 person - Shall be nominated by the Ministry of Science & Technology, Department of Scientific & Industrial Research 1 person - Shall be nominated by the Planning Commission 1 person - Shall be nominated by CSIR.
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Total - 18 The aforementioned 18 persons are to elect the Chairman and Vice-chancellor of the Council from amongst the elected members who will hold office for three years.
5 persons - Shall be nominated by the Ministry of Textiles form amongst the Directors of Premier Research & Development Institutions of the country engaged in Textile and Jute Sectors/ Management Institutions.
1 person - Shall be the Director of IJIRA & he shall be the ex-officio member.
9. According to Mr. Gupta, out of the said 24 persons only 6 as mentioned above, are Government Nominees. This Court does not accept the aforementioned submission because apart from these 6 nominees of the Government, clause 15 also lays down that 5 persons would be nominated by the Ministry of Textiles. Thus it is not only 6 persons who are Government Nominees but in fact, 11 persons are nominees of the Government of India. Moreover, clause 15 is also an indicator of the fact that the tenure of every member except the Government Nominees are for a period of only three years. In other words, it is evident even under the provisions of the clause 15 that while the Government Nominees enjoy a status of permanency, the other members come and go every three years. These will be evident upon reading the whole of clause 15. The same is reproduced below:
15. The Council shall comprise twenty four persons. The Genera] Body of the Association shall elect twelve persons from amongst the Primary Members of the Association at the Annual General Meeting. Another six shall comprise the following:
a) Jute Commissioner or his nominee
b) Two persons nominated by the Ministry of the Central Govt. granting funds for the Association
c) One person nominated by the Ministry of Science & Technology-Dept. of Scientific & Industrial Research
d) One person nominated by the Planning Commission
e) One person nominated by the CSIR.
These eighteen persons shall elect the Chairman and Vice-Chairman of the Council from amongst the elected members who shall hold office for three years. Five members would be nominated by the Ministry of Textiles from amongst the Directors of Premier Research & Development Institutions of the country engaged in Textile and Jute Sectors/Management Institutions. Director, IJIRA shall be an Ex-Officio member.
Provided, however, that in respect of the twelve persons or such number of persons as may be elected to the Council from amongst the members of the Association, one-third will retire every year and the vacancy so caused shall be filled up by election at the next Annual General Meeting.
Provided always that if there shall be any vacancy in the office of an elected member of the Council, the vacancy shall be filled by nomination by the Council and a member so nominated shall remain a member of the Council for the unexpired period of the term in whose vacancy he was nominated.
Provided that if for any reason such vacancy has not been filled up, the vacancy shall be filled up by election at the next Annual General Meeting for the term following the term in which the vacancy shall have occurred.
Provided always that notwithstanding anything to the contrary elsewhere contained in these Rules, the Council shall function whether any member who is entitled to become a member by reason of his office, is not a member of the Council for the time being or whether there is any vacancy in the Council caused by non appointment by the authority of Association entitled to make the appointments or otherwise and no acts or proceedings of the Council shall be invalidated merely by a reason of any vacancy, non attendance or any defects in the appointments of any of its members.
Subject to the above provisions, the tenure of every member shall be three years except that the Jute Commissioner or his nominee and two persons nominated by the Ministry of the Central Govt. granting funds for the Association, one person each from the Ministry of Science & Technology - Dept. of Scientific & Industrial Research, the Planning Commission and the CSIR as well as the five members nominated by the Ministry of Textiles from amongst the Directors of Premier Research and Development Institutions/Management Institutions, shall be Ex-Officio members to whom this rule shall not apply."[SIC] [highlighted portions are relevant as they have been interpreted in the manner as aforesaid].
10. Before we; go into the next argument of Mr. Gupta, it would also be relevant to look into some of the other provisions of the Memorandum of Association because they would go to show that the 'watchful eye" of the Government lurks vigilantly behind a facade of an innocuous society round the clock controlling IJIRA and thereby, brings it within the concept of the extended definition of a "State" under Article 12 of the Constitution of India.
11. In this context, clause 4 of the Memorandum of Association, inter alia, lays down that the Association shall "conform to the rules prevailing in Council of Scientific & Industrial Research laboratories"[SIC]. It is also clearly understood in clause 4 that any extra expenditure, in deviation to Govt. Rules shall have to be borne by the Association from its own resources.
12. This obviously makes us inclined to interpret that all expenditure is to be made strictly within the Govt. Rules but, if there he any extra expenditure which is incurred in deviation of Govt. Rules, then in that event, the same will have to be borne by the Association from its own resources.
13. It is also provided in clause 4 that except the Director, no member of the Council of Management of the Association is to be appointed to any salaried office or to any office of the Association and that no remuneration other benefits shall be given by the Association except by way of repayment of "out-of-pocket" expenses, except in accordance with the recommendations or by the approval of the Ministry of the Central Government which grants funds for the Association.
14. Thus the provisions of clause 4 of the Memorandum of Association clearly indicate that no appointment shall be made and no money shall he paid unless it is in accordance with any recommendation made or approval of the Ministry of the Central Government. Clause 4 reads thus:
4. The income and property of the Association, whencesoever derived, shall be applied solely towards the promotion of the objects of the Association and no portion thereof shall be paid or transferred directly or indirectly, by way of dividend, gift, division, bonus or otherwise by way of profit, to the Members of the Association. Provided that the Association shall broadly conform to the rules prevailing in Council of Scientific & Industrial Research laboratories but it being clearly declared that the Association shall specifically exempt itself from the operation of any particular Government rules and procedures when the Association finds it necessary to do so in the interests of achieving the objects of the Association, it being further understood that the extra expenditure, if any, incurred by deviating from Government Rules shall be borne by the Association from its own resources.
Provided that nothing herein shall prevent the payment in good faith of resonable and proper remuneration to any officer or servant of the Association or to any member of the Association, in return for any services rendered to the Association, or for any materials, labour, plant or power supplied for the purposes of the Association, nor prevent the payment of interest at a resonable rate on money lent, or payment of a resonable and proper rent for premises demised or let by any Member of the Association.
Provided further that, except the director no member of the Council of Management of the Association shall be appointed to any salaried office of the Association or any office of the Association paid by fees, and that no remuneration or other benefit shall be given by the Association to any member of such Council of the Association except by way of repayment of out-of-pocket expenses and interest as aforesaid on money lent or the payment of a resonable and proper rent for premises demised or let to the Association or any remuneration to any member of the Council in accordance with any recommendation by or with the approval of the ministry of the Central Government granting funds for the Association.
Provided that nothing herein contained shall he construed as restricting the right of a member to apply for a licence of a discovery or a process, patented or otherwise, of this Association in his private capacity or in his capacity as a member of the industry or trade." [SIC] [underlining by this Court]
15. Apart from the aforesaid, it is also evident upon reading clause of the Memorandum of Association that no addition, alteration or amendment to the Memorandum of Association or the Rules and Regulations can be made unless there is prior consultation with the Ministry of the Central Government granting funds to the Association. Even any property, remaining after the winding up or dissolution of the Association, cannot be paid or distributed amongst the members of the Association. The same can only be given or transferred to some other similar institution or institutions as may be determined by the members of the Association but such determination is subject to the approval of the Ministry of the Central Government granting funds to the Association at tile time of or before the time of dissolution. Clause 5 and 6 of the Memorandum of Association read as follows:
5. No addition, alteration or amendment shall be made to or in the Memorandum of Association or the Rules & Regulations of the Association for the time being in force, without prior consultation with the Ministry of the Central Government granting funds for the Association.
6. If upon the winding up or dissolution of the Association there remains, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the Members of the Association, but shall be given or transferred to some other institution or institutions having objects similar to the objects of the Association, and which shall prohibit the distribution of its or their income and property amongst its or their Members to an extent at least as great as is imposed on the Association under or by virtue of clause 4 thereof, such institution or institutions to be determined by the Members of the Association subject to the approval of the Ministry of the Central Government granting funds for the Association at or before the time of dissolution.[SIC]
16. Mr. Gupta then submits that under Article 20 of the Rules and Regulations, the quorum of only two Councillors shall be sufficient for any meeting of the Council. He submits that this being the position it cannot be said that the Government's control or participation is necessary. The aforementioned submission of Mr. Gupta is not acceptable to this Court for the simple reason that a mere quorum for a meeting cannot be a yardstick to decide as to whether a particular institution is a "State" or not a "State". In any event, clause 20 refers to a situation which may arise only occasionally on account of same pressing reasons but this by itself cannot be a ground or a point for taking into consideration as to whether IJIRA is a "State" or not.
17. Mr. Biswarup Gupta, learned senior advocate then further submitted that under Regulation 48 the Audits and Accounts of the Association are to be maintained in such manner prescribed by a Chartered Accountant and not by the Comptroller and Auditor General of India and this itself therefore is an indication to prove that the Association is not a "State".
18. We are not inclined to accept such a submission. Although the Association is required to maintain proper accounts in such form as may be prescribed by a Chartered Accountant, yet the same, according to this Court, is a procedure adopted merely for convenience because ultimately, under Regulation 48(iii), the accounts of the Association, as certified by the Chartered Accountant together with the audit report shall be forwarded annually to the Ministry of the Central Government granting funds to the Association. The accounts of the Association therefore, has to be sent to the concerned Ministry not as a mere formality but for the purpose of seeing as to whether IJIRA is faithfully discharging its obligations for which the Central Government has given funds to it. Moreover, from the letter dated 31.3.1998 issued by the Under Secretary to the Government of India (see: running page 355 of the Stay Application} it will be evident that the Under Secretary while writing to the Accounts Officer directed inter alia that the accounts of IJIRA shall be subjected to audit by the Comptroller and Auditor General of India. This has been dealt with further in paragraph 21(F) of this Judgment.
19. Mr. Gupta, then submits the under Regulation 49, the annual report is to be sent to the concerned Ministry merely for information. This Court is not inclined to accept such a submission because of the very language of Regulation 49 which lays down that the proceedings of the Annual General Meeting are to be sent to the Ministry and to the members, for information. In other words, the transmission of the annual report to the Ministry is mandatory and circulation and/or transmission thereof to the members of the Association is only for their information.
Regulations 48 and 49 read thus:
ACCOUNTS AND AUDIT
48.[i] The Association shall maintain proper accounts and other relevant records at its registered office and prepare an annual statement of account in such form as may be prescribed by a Chartered Accountant.
[ii] The accounts of the Association shall be audited annually by a Chartered Accountant and in particular he shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Association.
(iii) The accounts of the Association as certified by the Chartered Accountants together with the audit report thereon shall be forwarded annually to the Ministry of the Central Government granting funds for the Association according to the conditions laid down for this purpose.
ANNUAL REPORT
49. A draft of the annual report and the yearly accounts of the Association shall be prepared by the Council and placed before the Association at its Annual General Meeting for consideration and approval. Copies thereof as finally approved by the Association shall be supplied to the members. The proceedings of the Annual General Meeting of the Association together with the Annual Report shall be sent to the Ministry of the Central Government granting funds for the Association and to the members for information.
20. Mr. Gupta then argued that the Staff Manual would show that IJIRA is governed by an autonomous Council of Management and the terms and conditions laid down therein are such that it clearly takes IJIRA outside the purview of Article 12 of the Constitution of India. It is true that the manner of recruitment is different for the staff of IJIRA than Government employees but again, that by itself cannot be a factor for detemining as to whether IJIRA is a "State" or not. In order to determine as to whether an Organisation is a "State" within the meaning of Article 12 or not, the tests have already been laid down by Hon'ble the Supreme Court of India in the case of Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Ors. . It has been laid down by their Lordships that in each case, the tests that have to be seen to determine as to whether a corporation is an instrumentality or agency of the Government. Would be whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to that body and must be pervasive. If these ingredients are found, then the body would be a "State" within the meaning of Article 12 but when the control is merely regulatory, it would not be so. Mr. Biswarup Gupta submits that from every angle, the control is merely regulatory and neither the Memorandum nor the Rules and Regulations show that IJIRA is financially, functionally and administratively dominated by or is under the control of the Government.
21. In order to further deal with the aforementioned issue, in addition the manner dealt with in the preceding paragraphs, we have to first see the extent of control of the Government. In the Affidavit-in-Reply to the Affidavit-in-Opposition, the Respondent No. l herein (namely Debabrata Sarkar) submitted before the Writ Court from which this Appeal arises, that a host of a letters brought on record therein, establish administrative control of the Central Government. The aforementioned Affidavit-in-Reply has been appended to the Stay Application being CAN No. 4306 of 2003 at running page 269 thereof and upon a perusal of the same we find the following:
A) Letter dated 24.7.1992 written to the Regional Passport Officer by the Director, IJIRA requesting for the issuance of a passport to Debabrata Sarkar.
In the said letter, the Director, IJIRA states, inter alia, as follow-
Sri Debabrata Sarkar, Senior Technologist of Indian Jute Industries' Research Association, an autonomous R&D Organisation under administrative control of the Ministry of textiles, Government of India....
The aforesaid lines are relevant for noting that the Director, IJIRA has himself admitted in the said letter that IJIRA is under the administrative control of the Ministry of Textiles, Government of India. Mr. Gupta also argues that the Staff Service Regulations are such that they are different from Government employees. The very fact that it is an autonomous R&D Organisation obviously means that they will have their own Staff Service Regulations but the fact remains that this autonomous R&D organisation is under the administrative control of the Government of India. Ministry of Textiles, as admitted by the Director, IJIRA himself in this letter.
B) Letter dated 21.6.1996 issued by the Deputy Director, IJIRA, and addressed to the Senior Cargo Manager. Indian Airlines, Dumdum Airport.
In the said letter, the Deputy Director, inter alia, states that IJIRA being "exclusively a R&D institution funded by and are functioning under the administrative control of the Ministry of Textiles, Government of India, have brought the materials covered under consignments...."
This is another letter to show admission on the part of the Deputy Director admitting that IJIRA is a Research and Development Institution functioning under the administrative control of the Government of India, Ministry of Textiles.
C) Letter dated 1.4.1998 written by the Director, IJIRA and addressed to The Under Secretary to the Government of India, Ministry of Textiles annexing therewith the Annual Report for the period 97-98. The said report, at running page 324 of the Stay Application, inter alia states that IJIRA registered "under the West Bengal Societies Registration Act, 1961" is an autonomous Cooperative Research Organisation under the administrative control of the Ministry of Textiles, Government of India...." The concluding, portion of the said letter at running page 326 of the Stay Application, speaks of the release of a sum of Rs. 478.03 lakhs for the period 1996-97 by the Ministry of Textiles, Government of India. A huge amount of money, by all standards, given to IJIRA showing effective funding by the Government! D) Letter No. 22/13/90 dated 6.3.1997 issued by the Under Secretary to the Government of India and addressed to the Director, IJIRA asking him to take formal approval of the Government in matters relating to foreign visits of the officers/scientists of IJIRA irrespective of the fact whether the said foreign visit was being funded by IJIRA or by any other national/international agency. In this letter also, the aforementioned instruction is given after the Under Secretary clearly mentions in the very opening lines of the said letter that IJIRA is fully funded by grants from the Central Government and therefore, it was required to follow all Government Rules and Regulations. This letter shows both financial as well as functional control by the Government whereas the other letters are clear pointers to the administrative domain of the Government of India.
E) Memorandum dated 10.10.1996 (to be found at running page 348 of the Stay Application) is a Memorandum issued by the Senior Administrative Officer informing all concerned that the Government Audit Party will be conducting audit on and from 14.10.1996 and will continue doing so for 20 working days. All concerned therefore were requested to be ready for the said audit for the period 1995-96.
F) Letter dated 31.3.1998 issued by the Under Secretary to the Government of India (to be found at running page 355 of the Stay Application).
In the said letter the Accounts Officer, Pay & Accounts Office (Textiles) is directed to follow certain instructions in relation to the release of funds to IJIRA for meeting its expenditure for the period 1997-98. It inter alia says that:
i) An audited statement of accounts showing the expenditure incurred during 1997-98 shall be furnished to the Government together with a certificate from the Auditors certifying as to whether the grants-in-aid had been utilised for the purpose for which it was sanctioned.
ii) A register should be maintained as prescribed in form GFR-19 of the permanent and semi-permanent assets acquired wholly or partly out of Government grants and every year, an extract from that register should be furnished to the Government.
iii) Reservation for SC/ST in the posts and/or service which are under the control of IJIRA, has to be made in accordance with the criteria laid down by the Government.
iv) There has to be a statutory cut of 10% in the staff strength of IJIRA during the current financial year.
v) The account of the institute will be subject to audit by the Comptroller and Auditor General of India in accordance with the provisions of the Comptroller and Auditor General's duties (power and condition of service) Act, 1971.
vi) The grantee institution is not permitted to divert the funds received, to other institutions.
vii) Sufficient number of copies of the annual report including audited statement of accounts both in English and Hindi must be made available to the Government not later than 31st July, 1998 for placing the same on the table of the Parliament.
22. From a perusal of the aforementioned letters and documents, there can be no doubt that the Central Government dominates funding and it also dominates the functional and administrative spheres of the functioning of IJIRA. We are therefore constrained to hold that IJIRA is a "State" within the meaning of Article 12 of the Constitution of India.
23. At the same time we would be failing in our duties if we do not advert to some of the observations of the learned single Judge in Rabindranath Mukherjee's case (supra) made in W.P. No. 20039(W) of 1999 and which are as follows:
There is no dispute that in its Annual Report for the year 1978-79 the respondent employer reported as follows:
Attachment of IJIRA to the Ministry of Industry Newspaper reports had appeared around August, 1977 regarding the proposed "dismemberment" of CSIR and the transfer of many of its constituent Laboratories to "User Ministries". These reports were discussed by the Co-ordination Council of the Fibre Group of Laboratories of CSIR on 3rd September, 1977. In the absence of any official intimation regarding the proposed transfer or the reasons for it, the Co-ordination Council decided to obtain soon clarifications on this issue at the next meeting of the Governing Body of CSIR, which was to be held on September 21, 1977. The Governing Body of CSIR, however, referred the issue to the society of CSIR. On November 23, 1977 the Society of CSIR met under the Presidentship of the Prime Minister and took the decision to transfer all the Research Association, including IJIRA. to the Ministry of Industry with effect from April 1, 1978. The decision was formally conveyed by the Director-General of CSIR to the Director of IJIRA by a letter dated May 4, 1978....
24. During the course of arguments. Mr. Kalyan Bandhopadhyaya, learned Counsel for the respondents produced, for the perusal of this Court, the letter dated 4.5.1978 issued by Mr. A. Ramchandran, on behalf of the Government of India, Department of Science and Technology addressed to Sri T. Radhakrishnan, Director, IJIRA. In the said letter it is stated as follows:
I am enclosing herewith a copy of the Notification No. CD-161/ 78 dated 6th April, 1978 amending the Government of India (Allocation of Business) Rules, 1961 which constitute formal orders of the Government of India transferring your Institute/Museums/Research Associations to the Ministry named therein. From a perusal of the aforementioned letter, it is evident that by reason of an amendment brought in the Government of India (Allocation of Business) Rules, 1961, IJIRA was transferred to the concerned Ministry. The fact relating to this letter has also been taken note of by Hon'ble Mr. Justice Barin Ghosh in the aforementioned paragraphs quoted hereinabove and appearing under Para 13 supra.
The photocopy of the letter dated 4.5.1978 be retained with the records of this case.
25. We have also very meticulously and carefully perused the Judgment delivered in Rabindranath Mukherjee's case (supra). We find that apart from dealing with the aforementioned letters and facts, the learned single Judge has come to the following conclusions:
...on 6th April, 1978 the respondent employer became one of the subjects to be dealt with by the Industries Department of the Government and at present it is a subject of the Department of Chemicals. In terms of the provisions contained in the Government of India (allocation of business) Rules, 1961 the respondent employer became a subject of a Department of the Government with effect from 5th April, 1978 and continues to remain so. Minister as the incharge of the Controlling Department of the respondent employer or otherwise may be asked by the President to look after the business of the Government of India in relation to the respondent employer. But then that itself may not make the respondent employer a Governmental agency.
Grants-in-aid Rules provide that grants-in-aid including scholarship, may be sanctioned in favour of (1) an institution or organisation set up by the Government; (ii) voluntary organisations; (iii} educational institutions, local bodies and cooperative societies; and (iv) Government servants. The institutions or organisations set up by the Government may have been set up by the Government under a statute or as a society registered under the Societies Registration Act, 1860 or otherwise. The question is why "or otherwise"? to answer that question one has to read the Grants-in-Aid Rules very carefully. Voluntary organisations in order to obtain Grants-in-Aid must be involved in either promoting welfare schemes or programmes of the Government. But then they cannot get grants-in-aid exceeding 25 percent of their approved administrative expenditure on pay and allowances of their personnel. A voluntary organisation, therefore, shall be entitled to grants-in-aid for promoting welfare schemes and Government programmes but such grants-in-aid shall not exceed 25 per cent of approved administrative expenditure on pay and allowances would remain a voluntary organisation, despite receiving grants-in-aid for the purpose of promoting Government programmes and social welfare schemes and would, therefore, be a non-governmental organisations. If such a voluntary organisation is a subject within the meaning of the Government of India (Allocation of Business) Rules, 1961, it would not become a Governmental agency and on the other hand would continue to remain a non-Governmental agency but the Government of India and its Ministers shall be entitled to control its activities by making necessary stipulations at the time of providing the aids. But if a voluntary organisation originally established as such for the purpose of promoting social objects, welfare schemes and programmes of the Government, but later on cannot perform its such activities without grants-in-aid in excess of 25 per cent of approved administrative expenditure on pay and allowances of the personnel of such organisations, in terms of the grants-in-Aid Rules, it shall not be entitled to obtain grants-in-aid towards its administrative expenditure in excess of 25 per cent of approved administrative expenditure on pay and allowances of the personnel of such organisation and accordingly would be forced to stop its activities. If, however, the Government wishes such a voluntary organisation to continue to remain active, what should be done? I think the work "otherwise" should be construed in such perspective. Ordinarily the sentence "institutions or organisations set up by the Government as autonomous body either under a statute or a society registered under the Society Registration Act or otherwise" should mean institutions or organisations set up or established by the Government as autonomous body under a statute or as a society or be any other permissible means and that would relate to the time of setting up or establishment of the institution or organisation. But having regard to the Grants-in-Aid Rules the word "otherwise" shall include also those institutions or organisations which were not set up initially b the Government but later on the Government took over the responsibility of such institutions or organisations and continues to provide funds to such institutions or organisations to meet their administrative expenditure in excess of 25 per cent of approved administrative expenditure on pay and allowances of their personnel. If, therefore, an institution or organisation which was not initially set up by the Government but later on the Government granted aid to such an organisation or institution towards administrative expenditure in excess of 25 per cent of the approved administrative expenditure on pay and allowances of the personnel of such voluntary organisation, unless contrary is shown, it would be deemed that the Government has taken over the activities of such an organisation or institution and is, therefore, would be treated as an institution or organisation set up by the Government. If such an organisation is a subject in terms of Government of India (Allocation of Business) Rules, 1961 and accordingly the President may allocate the business of Government of India in relation to such an organisation or institution to a Minister of the Government, though the same may not become a part of the establishment of the Government but would certainly be a governmental agency for having been deemed to be established by the Government, funded by the Government and administratively controlled by the Government through a Minister appointed by it. It does not matter whether on the face of it, it appears that such an organisation or institution had not been established by the Government initially, the same is managed by persons other than the Government Officers and collects funds to some extent from private citizens or by selling its efforts or products.
In the instant case in view of the absence of the correspondence, referred to above, it is not known whether the respondent employer was initially established by the Government. Be that as it may the Government in 1978 decided that the facilities of research available to the respondent employer be made available to the Government so as to control the impact of the finished research of the respondent employer for the country's economic development, which is an over all responsibility of the Government, and promptly thereafter made it a subject of one of its departments so that it remains under its own administrative control. At the same time it took upon itself the burden of providing almost the entire needs of the respondent employer on account of funds required to run and manage the respondent employer. Can it be said that the respondent employer is not an other authority within the meaning of Article 12 of the Constitution of India in these backgrounds?....
From all the aforesaid facts and circumstances, we are clearly of the opinion that there can be no doubt at all but to come to the inescapable conclusion that the Appellant is clearly a State within the meaning of the Article 12 of the Constitution of India.
26. As a consequence of the findings returned by this Court in the aforementioned paragraphs, this Court would now turn to the relevant observations and/or findings return by the learned single Judge in the impugned Judgment dated 25.11.2002 passed in W.P. No. 7822(W) of 1998 [Debabrata Sarkar v. Union of India and Ors.]. In the aforementioned Judgment, the following observations of the learned single Judge are worth reproducing. They are quoted in two parts under Headings A and B. A This writ petition is made by an individual against Indian Jute Industries Research Association and/or their authorities as well as Union of India through the Secretary of Ministry of Textiles Government of India. At the threshold the respondents took preliminary point that writ petition is not maintainable against Indian Jute Industries Research Association which is not a 'State' under Article 12 of the Constitution of India.
The challenge of the petitioner is the initiation of the disciplinary proceedings and determination of service as again the petitioner etc. by the Indian Jute Industries Research Association which is commonly known as IJIRA. According to the petitioner, it is an autonomous body registered under the West Bengal Societies Registration Act, 1961 to promote research and other scientific work connected with the jute trade and allied industries. It is fully funded and controlled by the Central Government. It is imparting public duty. Therefore, it is a 'State' under Article 12 of the Constitution of India which has been denied by the respondent.
My task has been minimized by my brother Judges. Justice Altamas Kabir in a Judgment reported in 1992 LAB IC 1539 (Biswajit Chakraborty v. Indian Jute Industries and Research Association (UNDP and Ors.) held that IJIRA as a State. Within the meaning of Article 12 of the Constitution of India. The ratio of the Judgment is that almost the entire funds of the Indian Jute Industries Research Association are given by the Central Government from different sources. Six members of the Board are also nominated by the Central Government. Therefore, although the aforesaid body is a separate entity, the Central Government exercise control of the management, hence it is a state.
Similarly, Justice Barin Ghosh is an unreported Judgment i.e. W.P. No. 20039(W) of 1999 (Rabindra Nath Mukherjee's case v. Union of India and Ors.) held on the similar line. Although an appeal was preferred from such order to a Division Bench but the Appeal Court in M.A.T. 1876 of 2000/FMA 2253 of 2000 reluctantly refused to interfere with the ratio of the Judgment of Justice Barin Ghosh.
Similarly, in a further writ petition in W.P. No. 3538(W) of 2002 (Arindam Banerjee v. Union of India and Ors.) Justice Kalyan Jyoti Sengupta held in a similar manner. It is significant to note hereunder that Justice Sengupta has taken into account the Judgments of Justice Kabir and Justice Ghosh in respect of the formation of opinion in connection thereto during the course of hearing before this Court.
B No doubt the Government of India funding the institution for the purpose of running the same. It is also an admitted position that IJIRA is the only organisation for testing the jute products. Therefore, such organisation is doing the monopoly activities on behalf of the State in respect of testing of the jute products. No doubt it has a deep and pervasive control of the Ministry of Textiles, Government of India. It is also clear from the respective document i.e. the audited account of the year 1995-96 that funding of the Government is approximately 99.41%. Joint Director of the Audit of the Central Government inspecting the accounts of such authority. Annual reports and the audited accounts are being produced before the House of Parliament. This organisation is doing various technical research work like (a) research and product; (b) improvement of quality; (c) savings and energy and foreign exchange; (d) new products/process as output and (e) export possibility of the products.
Upon placing such facts he cited a recent Supreme Court Judgment (Pradip Kumar Biswas v. Indian Institute of Chemical Biology and Ors.) whereunder a seven Judges' Bench (per majority 5:2) held Council of Scientific and Industrial Research i.e. (CSIR) which was held not 'State' in (supra) was overruled Majority of the Judges of the Supreme Court held that from whichever prospect the facts are considered, there can be no doubt that the conclusion reached in Sobhajit Tewary's case (supra) mas erroneous. If the decision of Sobhajit Tewary has sought to lay down a legal principle that a Society registered under the Society Registration Act and the company incorporated under the Companies Act is by that reason alone excluded for the concept of 'State' under Article 12, it is a principle which has since long been discredited. 'Judges' have made worthy, if same fest, efforts, while giving lip service to the Rule, to riddle it with exceptions and by distinctions reduce it to a shadow. In (Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers' Association and Anr.) I find that a Bench of the Supreme Court held that Mysore Paper Mills Limited is the 'State'. For the purpose of drawing inference certain conditions have laid down therein. The company is controlled by the Government more than 97%. The memorandum of association entrusts important public duties in their programme growth of national economy. Out of 12 directors 5 are Governmental nominee besides other elected Directors who are also with the nomination of the Government. The various other forms of supervision and control will go to show that the State Government has deep and pervasive control of the company and it is day to day administration and secondly confirm the position that it is an instrumentality and agency of the State. And physical form of the company is merely clock or cover for the Government.
I have taken note of the submissions made by the learned Counsel appearing for the parties to come to an appropriate conclusion. Factually, there is no doubt that the Society has a deep and pervasive control of the Government of India. It is more than the 99% which is over and above the reason of funding as provided in 2002(2) SCC 167 (supra). The explanation of Mr. Chatteriee, in view of AIR 1988 SC 169 (supra) holding the view of AIR 1975 SC 1329 (supra) in Sobhqjit Tewary's case in respect of CISR is no longer good law in view of the majority decision of the Supreme Court reported in 2002(5) SCC 111 (supra). It is well considered that even a Society having been registered under the Societies Registration Act can be called as 'other authority within the meaning of Article 12 of Constitution of India. Therefore, what is the remaining balancing factor? The remaining balancing factor is whether relationship of master-servant can be amenable under the writ jurisdiction of this Court in view of such circumstances or not. This question particularly arose in view of Ajay Hasia's case reported in AIR 1981 SC 487 (supra). According to me, Ajay Hasia's case reported in AIR 1981 SC 487 as well as Sabhajit Tewary's case reported in AIR 1975 SC 1329 (supra) have been thoroughly considered by the recent Supreme Court Judgment which is the largest Bench amongst all the other Benches whose Judgments were cited before this Court till now. Although the decision was taken by the Supreme Court per majority i.e. 5:2 but that does not necessarily mean the strength of the Bench can be curtailed. Although the earlier two Judgments, which are very much considered are Judgments of five Judges' Bench, but this Judgment having been ratio of seven Judge's Bench i.e. 5:2 have overruling effect over those Judgments because of the strength. Moreover, one of such dissending Judges taken the similar view in the Judgment reported in 2002(11) SCC 167 (supra). Therefore, the technicalities whether the said authority is instrumentality or the agency of the State or not is no more Pres Integra.
So far as the question of jurisprudence service is concerned I have taken notes of certain factual position. The factual aspect is that whether the services of the employees are being taken note by the Board of Directors of such Society or not it appears to that Council of Board is very much controlled by the Union of India and taking various aspects of the matter including the staff welfare. It has its own staff manual for taking decision as against an employee. According to me, unless the funds are utilised for the purpose of the work through the employees such work cannot be done. Therefore it is clear that the funds having been utilised for the purpose of IJIRA through the employer difference between this case and a case of the Calcutta Electric Supply Corporation Limited. Such company is not funded and controlled by the Governmental authority. It is only doing monopolistic business of the State as its agent or instrumentality by way of supplying electricity. Here almost total fund is coming to the Society, irrespective of its form, for the purpose of utilisation of the work through their men and machines. Therefore, such fund are being utilised for the purpose of such rendering services. The duties and responsibilities of such persons are accountable to the Council of Boards of the Society which has been fully funded by the Government of India. Therefore, I have no doubt that IJIRA has deep and pervasive control of the Government of India in respect of all rendering services through its employees. Therefore IJIRA is 'State' under Article 12. The employer-employee relationship can be amenable under the writ jurisdiction of this Court.
27. We have also looked into the other Judgments referred to by the learned single Judge in the aforementioned Judgment. We have also carefully considered the documents and pleadings on record and we find absolutely no reason to take a different view than what has been taken by the other learned Judges in the earlier applications. On the contrary, we find that this 6th attempt of IJIRA in trying to repeatedly argue the same points over and over again notwithstanding the issue having been conclusively set at rest must be deprecated in the strongest terms as it amounts to an attempt, ad nauseam, to unnecessarily take the Court's time. They are harping on the same tune right from the beginning and this is their 6th attempt. We therefore, strongly deprecate such efforts because a number of days were consumed in hearing this case to the prejudice of an already very heavy roster. We therefore, feel compelled that such litigations should be discouraged. For all the reasons stated in the earlier paragraphs as well as for the reason stated in this paragraph, we reject the contentions of IJIRA and we hold and come to the conclusion that IJIRA is a "State" within the meaning of Article 12 of the Constitution of India.
28. The Appeal fails and is accordingly dismissed.
Urgent xerox certified copy of this order, if applied for, the same will be supplied expeditiously.
Prabir Kumar Samanta, J.
29. I agree.