Allahabad High Court
Ram Karan vs State Of U.P. And 5 Others on 15 May, 2014
Author: Surya Prakash Kesarwani
Bench: Surya Prakash Kesarwani
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. - 58 Case :- WRIT - A No. - 27306 of 2014 Petitioner :- Ram Karan Respondent :- State Of U.P. And 5 Others Counsel for Petitioner :- Anoop Kumar Singh Counsel for Respondent :- C.S.C.,Om Prakash Hon'ble Surya Prakash Kesarwani,J.
1. On oral request of learned counsel for the petitioner in Writ Petition No. 27308 of 2014 the name of the petitioner as mentioned on page-6 of the writ petition is allowed to be corrected.
2. Office is directed to correct the name of the petitioner in the records.
3. Heard Sri Anoop Kumar Singh, learned counsel for the petitioner, Sri B.P. Singh Kachhawah, learned Standing Counsel for respondent no. 1 to 5 and Sri Om Prakash, learned counsel for respondent no. 6.
4. This writ petition has been filed seeking relief against the respondent no. 6 i.e. Secretary Sahakari Ganna Vikas Samiti Ltd. Saharanpur. The relief sought by the petitioner is that the respondent no. 6 may be directed to pay his arrears of salary and other dues .
5. It is not disputed that respondent no. 6 i.e Co-operative Society is neither a government body nor an instrumentality of the State. It is not founded by the government. It does not discharge public function. It has its own bye laws and governing body. Its members are individuals and mainly cane growers.
6. The Hon'ble Supreme Court in the case of General Manager, Kisan Sahkari Chini Mills Ltd., Sultan Vs. Satrughan Nishad reported in (2003)8 SCC 639; AIR 2003 SC 4531 held as under:-
"5. Shri Rakesh Dwivedi, learned Senior Advocate appearing in support of the appeals, submitted that the contesting respondents could not have been allowed to invoke writ jurisdiction of the High Court as the Mill, which is a registered co- operative society, was not State within the meaning of Article 12 of the Constitution as it was neither instrumentality nor agency of the Government of Uttar Pradesh. On the other hand, Shri Sunil Gupta, learned Senior Advocate appearing on behalf of the contesting respondents, submitted that the Mill was an instrumentality of the Government, as such it was an authority within the meaning of Article 12 of the Constitution.
6. The point raised is no longer res integra as the same is concluded by decisions of this Court. In the case of Ajay Hasia and others v. Khalid Mujib Sehravardi and Ors., (1981 ) 1 SCC 722, a Constitution Bench of this Court, while approving the tests laid down in the case of Ramana Dayaram Shetty v. International Airport Authority of India & Ors., (1979) 3 SCC 489, as to when a corporation can be said to be an instrumentality or agency of the government, observed at page 736 which runs thus:-
"The tests for determining as to when a corporation can be said to be an instrumentality or agency of government may now be culled out from the judgment in the International Airport Authority case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority case as follows:
(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government (SCC p.507, para 14) (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character. (SCC p.508, para 15) (3) It may also be a relevant factor#whether the corporation enjoys monopoly status which is State conferred or State protected. (SCC p.508, para 15) (4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality. (SCC p.508, para 15) (5) If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. (SCC p.509, para 16) (6) "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation being an instrumentality or agency of Government. (SCC p. 510, para 18) If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of government, it would, as pointed out in the International Airport Authority case, be an 'authority' and, therefore, 'State' within the meaning of the expression in Article 12. "
7. In the case of Pradeep Kumar Biswas v.Indian Institute of Chemical Biology and others (2002) 5 SCC 111, a Bench of seven Judges of this Court, in para 27 of its judgment has noted and quoted with approval in extenso the aforesaid tests propounded in International Airport Authority case (supra) and approved in the case of Ajay Hasia (supra) for determining as to when a corporation can be said to be an instrumentality or agency of the government so as to come within the meaning of the expression 'authority' in Article 12 of the Constitution. There the Bench referred to the case of Chander Mohan Khanna v. NCERT (1991) 4 SCC 578 where, after considering the memorandum of association and the rules, this Court came to the conclusion that NCERT was largely an autonomous body and its activities were not wholly related to governmental functions and the government control was confined only to the proper utilisation of the grants and since its funding was not entirely from government resources, the case did not satisfy the requirements of the State under Article 12 of the Constitution. Further, reference was also made in that case to the decision of this Court in Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers' Association and another, (2002) 2 SCC 167, where it was held that the company was an authority within the meaning of Article 12 of the Constitution as it was substantially financed and financially controlled by the Government, managed by a Board of Directors nominated and removable at the instance of the Government and carrying on important functions of public interest under the control of the Government.
8. From the decisions referred to above, it would be clear that the form in which the body is constituted, namely, whether it is a society or co-operative society or a company, is not decisive. The real status of the body with respect to the control of government would have to be looked into. The various tests, as indicated above, would have to be applied and considered cumulatively. There can be no hard and fast formula and in different facts/situations, different factors may be found to be overwhelming and indicating that the body is an authority under Article 12 of the Constitution. In this context, Bye Laws of the Mill would have to be seen. In the instant case, in one of the writ applications filed before the High Court, it was asserted that the Government of Uttar Pradesh held 50% shares in the Mill which fact was denied in the counter affidavit filed on behalf of the State and it was averred that majority of the shares were held by cane growers. Of course, it was not said that the Government of Uttar Pradesh did not hold any share. Before this Court, it was stated on behalf of the contesting respondents in the counter affidavit that the Government of Uttar Pradesh held 50% shares in the Mill which was not denied on behalf of the Mill. Therefore, even if it is taken to be admitted due to non traverse, the share of the State Government would be only 50% and not entire. Thus, the first test laid down is not fulfilled by the Mill. It has been stated on behalf of the contesting respondents that the Mill used to receive some financial assistance from the Government. According to the Mill, the Government had advanced some loans to the Mill. It has no where been stated that the State used to meet any expenditure of the Mill much less almost the entire one, but, as a matter of fact, it operates on the basis of self generated finances. There is nothing to show that the Mill enjoys monopoly status in the matter of production of sugar. A perusal of Bye-Laws of the Mill would show that its membership is open to cane growers, other societies, Gram Sabha, State Government, etc. and under Bye-Law 52, a committee of management consisting of 15 members is constituted, out of whom, 5 members are required to be elected by the representatives of individual members, 3 out of co-operative society and other institutions and 2 representatives of financial institutions besides 5 members who are required to be nominated by the State Government which shall be inclusive of the Chairman and Administrator. Thus, the ratio of the nominees of State Government in the committee is only 1/3rd and the management of the committee is dominated by 2/3rd non-government members. Under the Bye-Laws, the State Government can neither issue any direction to the Mill nor determine its policy as it is an autonomous body. The State has no control at all in the functioning of the Mill much less deep and pervasive one. The role of the Federation, which is the apex body and whose ex-officio Chairman-cum-Managing Director is Secretary, Department of Sugar Industry and Cane, Government of Uttar Pradesh, is only advisory and to guide its members. The letter sent by Managing Director of the Federation on 22nd November, 1999 was merely by way of an advice and was in the nature of a suggestion to the Mill in view of its deteriorating financial condition. From the said letter, which is in the advisory capacity, it cannot be inferred that the State had any deep and pervasive control over the Mill. Thus, we find none of the indicia exists in the case of Mill, as such the same being neither instrumentality nor agency of government cannot be said to be an authority and, therefore, it is not State within the meaning of Article 12 of the Constitution.
9. Learned counsel appearing on behalf of the contesting respondents submitted that even if the Mill is not an authority within the meaning of Article 12 of the Constitution, writ application can be entertained as mandamus can be issued under Article 226 of the Constitution against any person or authority which would include any private person or body. Learned counsel appearing on behalf of the appellant, on the other hand, submitted that mandamus can be issued against private person or body only if infraction alleged is in performance of public duty. Reference in this connection may be made to the decisions of this Court in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Samarak Trust and others v. V.R.Rudani and others (1989) 2 SCC 691 in which this Court examined the various aspects and distinction between an authority and a person and after analysis of the decisions referred in that regard came to the conclusion that it is only in the circumstances when the authority or the person performs a public function or discharges a public duty that Article 226 of the Constitution can be invoked. In the cases of K.Krishnamacharyulu and others v. Sri Venkateswara Hindu College of Engineering and another (1997) 3 SCC 571 and VST Industries Ltd. v.VST Industries Workers' Union and another, (2001) 1 SCC 298, the same principle has been reiterated. Further, in the case of VST Industries Ltd. (supra), it was observed that manufacture and sale of cigarettes by a private person will not involve any public function. This being the position in that case, this Court held that the High Court had no jurisdiction to entertain an application under Article 226 of the Constitution. In the present case, the Mill is engaged in the manufacture and sale of sugar which, on the same analogy, would not involve any public function. Thus, we have no difficulty in holding that jurisdiction of the High Court under Article 226 of the Constitution could not have been invoked."
7. In Writ Petition No. 45914 of 2013 (Gopal Prasad Vs. State of U.P. & 7 others) decided on 5.9.2013 this Court held that a Cane Cooperative Development Society is not "State" within the meaning of Article 12 of the Constitution of India and a writ petition against it is not maintainable.
8. In the Case of Jyoti Kumar Malviya Vs. Indian Farmers Fertilizers Cooperative Ltd. and others 2006 (3) ADJ 383 (All) (DB) a Division Bench of this Court considered the provisions of Article 12 and 226 of the Constitution of India and observed as under:-
"3. Article 226 of the Constitution provides that every High Court shall have powers, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo-warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. Part III of the Constitution deals with the fundamental rights and Article 12 which defines "The State" is contained in Part III of the Constitution. The significance of Article 12 of the Constitution has been emphsised by a Constitution Bench of the Hon'ble Supreme Court consisting of seven Hon'ble Judges in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Ors. in the following words:
"But before considering the decisions it must be emphasized that the significance of Article 12 lies in the fact that it occurs in Part III of the Constitution which deals with fundamental rights. The various Articles in Part III have placed responsibilities and obligations on the "State" vis-a-vis the individual to ensure constitutional protection of the individual's rights against the State, including the right to equality under Article 14 and equality of opportunity in maters of public employment under Article 16 and most importantly, the right to enforce all or any of these fundamental rights against the "State" as defined in Article 12 either under Article 32 by this Court or under Article 226 by the High Courts by issuance of writs or directions or orders." (Emphasis supplied)
4. As seen above, Article 226 of the Constitution confers powers on the High Courts to issue to 'any person' or 'authority' writs for enforcement of 'the fundamental rights' as well as 'for any other purpose'. The power to issue writs of the nature expressly mentioned "to any person" can only mean the power to issue such writ to any person to whom, according to well established principles the writ lay and the words 'for any other purpose' must mean a purpose other than enforcement of fundamental rights for which any of the writs would, according to established principles issue i.e. for enforcement of some other legal right and the performance of some legal duty.
5. The word "State" has been defined in Article 12 to include the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.
6. Dr. B.R. Ambedkar explained the scope of Article 12 and the reason why this Article was placed in the chapter of fundamental rights in the Constituent Assembly by stating:
The object of the fundamental rights is twofold. First, that every citizen must be in a position to claim those rights. Secondly, they must be binding upon every authority - I shall presently explain what the word 'authority' means - upon every authority which has got either the power to make laws or the power to have discretion vested in it. Therefore, it is quite clear that if the fundamental rights are to be clear, then they must be binding not only upon the Central Government, they must not only be binding upon the Provincial Government, they must not only be binding upon the Governments established in the Indian States, they must also be binding upon District Local Boards, Municipalities, even Village Panchayats and Taluk Boards, in fact, every authority which has been created by law and which has got certain power to make laws, to make rules, or make bye-laws.
If that proposition is accepted - and 1 do not see anyone who cares for fundamental rights can object to such a universal obligation being imposed upon every authority created by law - then, what are we to do to make our intention clear? There are two ways of doing it. One way is to use a composite phrase such as 'the State', as we have done in Article 7; or, to keep on repeating every time, 'the Central Government, the Provincial Government, the State Government, the Municipality, the Local Board, the Post Trust, or any other authority'. It seems to me not only most cumbersome but stupid to keep on repeating this phraseology every time we have to make a reference to some authority. The wisest course is to have this comprehensive phrase and to economise in words.
7. The definition of "State" was initially treated to be exhaustive confined to the authorities stipulated under Article 12 and those which could be read ejusdem generis with the authorities mentioned in Article 12 itself because till about the year 1967 the Courts had taken the view that even statutory bodies, Universities, Selection Committee for admission to Government Colleges were not "other authorities" for the purpose of Article 12. It was only in the year 1967 that a Constitution Bench of the Supreme Court consisting of five Hon'ble Judges in the case of Rajasthan State Electricity Board, Jaipur v. Mohan Lal and Ors. held that the expression "other authorities" was wide enough to include all Constitutional or Statutory Authorities on whom powers were conferred by law and it was not at all material that some of the powers conferred were for the purpose of carrying on commercial activities. It was observed:
"The expression "other authorities" is wide enough to include within it, every authority created by a Statute and functioning within the territory of India or under the control of the Government of India; and we do not see any reason to narrow down these meanings in that context in which the word "other authorities " are used in Article 12."
8. Thus, though the definition of "State" was expanded but it followed that since a company incorporated under the Companies Act was not formed statutorily and was not subject to any statutory duty, it was excluded from the purview of the "State". Reference in this connection may be made to the decision of the Supreme Court in Praga Tools Corporation v. C.A. Amanul AIR 1969 SC 1306.
10. It must also be noticed that on the same day and by the same Constitution Bench of the Supreme Court, Sabhajeet Tiwari v. Union of India and Ors. was decided. The Council of Scientific and Industrial Research was held not to be an authority for two reasons. The first was that the society did not have a statutory character like the Oil and Natural Gas Commission or the Life Insurance Corporation or the Industrial Finance Corporation but was merely a society incorporated in accordance with the provisions of Societies Registration Act and secondly the employees did not enjoy the protection available to government servants as contemplated under Article 311 and, therefore, could not be held to be a department of the Government.
12. The Supreme Court in the aforesaid decision propounded certain tests which were subsequently reformulated after two years by another Constitution Bench of five Hon'ble Judges in the case of Ajay Hasia v. Khalid Mujib Sehravardi and Ors. , This case was in respect of a Regional Engineering College whose administration was carried on by a society registered under the provisions of Societies Act, 1898. An objection was raised by the society in response to the petition filed by the candidates challenging the admission procedure that it was not 'State' within Article 12 and, therefore, not amenable to the writ jurisdiction of the Supreme Court under Article 32 of the Constitution. The Court observed that the society cannot be equated with the Government of India or the Government of any State and nor could it be said to be a local authority. It, therefore, was required to be seen whether it would fall within the expression "other authorities" for it to be a State under Article 12 of the Constitution. The Court also emphasised that the concept of instrumentality or agency of the Government is not limited to a corporation created by a Statute but is also equally applicable to a company or a society and in each individual case it would have to be decided, on a consideration of the relevant factors, whether the company or the society was an instrumentality or the agency of the Government so as to come within the meaning of the expression "other authority" under Article 12. The tests laid down by the Supreme Court in International Airport Authority were summarized as follows:
"The tests for determining as to when a corporation can be said to be an instrumentality or agency of Government may now be culled out from the judgment in the International Airport Authority's case . These tests are not conclusive or clinching, but they are merely indicative indicia which have to he used with care an caution, because while stressing the necessity of a wide meaning to he placed on the expression "other authorities ", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government with the sweep of the expression. A wide enlargement of the. meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority's case as follows :
(1) "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of Government."
(2) "Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character."
(3) "It may also be a relevant factor...whether the corporation enjoys monopoly status which is the State conferred or State protected."
(4) "Existence of "deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality."
(5) "If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government".
(6) "Specifically, if a department of Govt. is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government."
13. The society was found to be an instrumentality or agency of the State for the following reasons:
"......................The composition of the Society is dominated by the representatives appointed by the Central Government and. the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and. the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in. the report of the Reviewing Committee. The control of the Slate and the Central Governments is indeed, so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or Central Govt. can be removed from the membership of the Society by the State Government with the approval of the Central Government, The Board of Governors, which is in-charge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. It will thus be seen that the State Government and by reason of the provision for approval, the Central Government also, have full control of the working of the Society and it would not be incorrect to say that the Society is merely a projection of the State and the Central Governments......................"
14. The Constitution Bench of the Supreme Court in Pradeep Kumar Biswas, upon a consideration of the above referred cases and a number of other cases, made the following observations:
"The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case 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 the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State."
(Emphasis supplied)
9. In view of the facts and circumstances mentioned above and the law laid down by this Court in the case of Gopal Prasad (supra) and in the case of Jyoti Kumar Malviya (supra) and by Hon'ble Supreme Court in the case of Satrughan Nishad (supra), Sahakari Ganna Vikas Samiti Ltd. Sulatanpur (respondent no. 6) is not state within the meaning of Article 12 of the Constitution of India. Hence writ petition is not maintainable.
10. In the circumstances the writ petition is dismissed as not maintainable.
Order Date :- 15.5.2014 Dhirendra/-