Andhra HC (Pre-Telangana)
Administrative Staff College Of India, ... vs D.P. Seshachalam on 30 December, 1988
Equivalent citations: (1990)ILLJ575AP
Author: K. Jayachandra Reddy
Bench: K. Jayachandra Reddy
JUDGMENT Jayachandra Reddy, J.
1. This writ appeal is directed against the order of our learned brother P. A. Chowdhary. J. The writ petition was filed seeking a writ or order or direction in the nature of Mandamus declaring the order of termination of the petitioner's service dated 23rd October, 1979 as illegal and void and without jurisdiction, and to direct the respondent, viz., the Administrative Staff College of India, to reinstate him in service.
2. A preliminary objection was taken on behalf of the Administrative Staff College that the writ is not maintainable in as much as the Administrative Staff College of India is not an authority as to come within the meaning of "State" under Article 12 of the Constitution of India. The learned single Judge, after referring to various decisions, held that the Administrative Staff College of India should be regarded as "State" within the meaning of Article 12 of the Constitution and is thus amenable to writ jurisdiction, and then he quashed the impugned order.
3. In this writ appeal Sri V. R. Reddy, the learned counsel appearing for the appellant, viz., the Administrative Staff College, submitted that the College is registered as a society under the Societies Registration Act and is not a statutory corporation like the Life Insurance Corporation, etc. which are created under statutes, and the mere fact that the Education Secretary of the Government of India is one of the members of the Court of Governors, or the further fact that the College is receiving assistance from the Government, does not impress the college with any statutory character and therefore the writ is not maintainable. It is also submitted that the relationship between the College and the employee is purely that of master and servant and no writ petition is maintainable by an employee for a declaration of reinstatement in case of termination of service.
4. To appreciate these rival contentions it becomes necessary to refer to the circumstances and the manner under which the College was established, the Memorandum of Association and the Rule governing the College. The idea of establishing this College dates back to a visit of the then Finance Minister Sri T. T. Krishnamachari to the Administrative Staff College at Honely-on Thames in the U.K. in 1948. Later on, the recommendation of the All India Council for Technical Education was accepted by the Government and the then Education Minister, Sri Moulana Abul Kalam Azad, appointed a Planning Committee to pursue the same. The Planning Committee was chaired by Sri T. T. Krishnamachari who piloted it in the Government for implementation and the Administrative Staff College eventually took shape in its actual establishment in the year 1957 at Hyderabad. The Minutes of the 64th meeting of the Court of Governors held in Hyderabad on 6th December, 1974 show. -
"The College should play a greater role in the area of Public Administration/public policy/developmental administration and should also exhibit sensitivity to the problems of the changing situation scene in the country. As a national institute in the filed of Management Development its involvement in the national scene and national problems should be on a pro-active basis rather than on a re-active basis. The College should develop an 'ASCI View' on all-India polices".
As on 31st March, 1980 the Court of Governors consisted of 30 in number of whom the Principal and the Vice - Principal were the appointees to the College. There are six Secretaries to the Government of India. Apart from that, the Chairman, State Bank of India, a Scientist from the Central Leather Research Institute, the Director General of National Council of Applied Economic Research, the Managing Director, I.D.L. Chemicals Ltd., and the Chairman of Nagarjuna Fertilisers Ltd. are the members of the Court of Governors. The College receives grants from the Government of India and also Ford Foundation Grant. The Memorandum of Association and the Rules contain the objects for which the Society is formed. The sum and substance of the Memorandum of Association would go to show that the objects are, to promote and provide for the study of the principles and technique of organisation and administration in the various spheres of national life; to provide and arrange for a co-operative study and investigation of such principles and techniques and for exchange of ideas and experiences and for promotion of a better understanding between persons connected with organisation and administration in the various spheres; to establish and maintain centres for research into problems of policy organisation management and administration and to conduct scientific research in applied sciences in different spheres; to undertake, organise and facilitate study courses conferences, etc.; to undertake and provide for the publication of journals and of research papers and books; to enter into agreement with any Government or authority; to obtain from such Government or authority rights, privileges, concessions, etc., and to do all such other lawful thing as may be considered conducive or incidental to the attainment of the above objects. The first Court of Governors consisted of nearly 11 members. In the same Memorandum the names of several persons who have associated themselves for the purposes described in the Memorandum and who have subscribed their names to the Memorandum, are mentioned. They include Sri T. T. Krishnamachari, Dr. Alagappa Chettiar, Secretary, Ministry of Education, Joint Secretary, Ministry of Production and the joint Secretary, Ministry of Finance. In the Rules "General Body" is defined. There is a provision for patrons, ordinary members, associate members and honorary members, Rule 8 deals with the composition of the Court of Governors, and sub-rule (3) of Rule 8 says that the Court of Governors may co-opt not more than 14 persons whose nomination is considered by the Court to be of value to the College as additional Members of the Court of Governors. Rule 17 provides for the meetings of the general Body.
5. Relying of the Memorandum of Association and the Rules it is contended by the learned counsel for the College that the College was neither conceived nor established as an instrumentality or agency of the State, that the administration and management of the affairs of the College are entrusted to a Court of Governors consisting of several persons elected by the General Body, and that barring the provisions for nomination of one person by the Government of India, the Government has absolutely no manner of control over the constitution of the Court of Governors. The fact that number of State Governments and public sector undertakings had chosen to become members of the College Society and that eminent persons holding or who had held outstanding positions in public life were elected or co-opted as members of the Court of Governors does not detract from the autonomous and independent status of the College.
6. At this stage it becomes necessary to gather several principles laid down by the Supreme Court by its authoritative pronouncements. In Ramana Dayaram Shetty v. International Airport Authority (1979-II-LLJ 217) it is pointed out that for instrumentality or an agency, the following tests have to be observed (p. 227) :
1. One thing is clear that if the entire share capital of the Corporation is held by the Government, it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government.
2. Existence of deep and pervasive 'State control' may afford an indication that the Corporation is a State agency or instrumentality.
3. It may also be a relevant factor whether the Corporation enjoys monopoly status which is State conferred or State protected.
4. 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.
5. 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.
The Supreme Court further proceeded and amplified thus :-
(i) In applying the above tests, it is not very much relevant whether the Corporation is created by a statute or is incorporated under a statute; e.g., Companies Act, Societies Registration Act, etc., The fact that a Corporation is a statutory Corporation may perhaps be a factor supporting the conclusion of the Corporation being an instrumentality or agency of the State; but, it does not follow that every statutory Corporation is ipso facto an instrumentality or agency of the State.
(ii) It is not necessary that all the tests pointed out above should be satisfied. It would be a question to be determined in a given case on an aggregate of the relevant circumstances. For instance, if a Corporation is created and the functions of an existing department of the Government are transferred to it, it would no doubt be a strong factor supporting the conclusion of the Corporation being an instrumentality or agency of the Government; but what difference would it make if, instead of doing that, the State creates a Corporation by contributing its total share capital by retaining total control over it, and by calling upon such Corporation to undertake a fresh activity of a public nature and for the benefit of the public ?
(iii) If a Corporation is vested by law with power to give directions, the disobedience of which is punishable as a criminal offence or is invested with the power to make Rules and Regulations and to administer or enforce them to the detriment of the citizens and others, within the territory of India, within the meaning of Art. 12. In such cases, the further test whether they are instrumentalities or agencies of the Central or State Government is unnecessary.
7. In Ajay Hasia v. Khalid Mujib (1981-I-LLJ-103) a question arose whether the Regional Engineering College, Srinagar though sponsored by the Government of India but established and managed by a Society registered under the Societies Registration Act, is an "authority" within the meaning of Article 12 of the Constitution. The Supreme Court in this case also surveyed the entire case law, referred to the relevant tests laid down in Ramana's case (supra), and then observed (p. 112) :
"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."
Their Lordships also observed (p. 113) :
"The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Art. 12"
While considering whether that particular society viz., Regional Engineering College, Srinagar, is an 'authority' falling within the definition of "State", their Lordships examined the composition of the Society and held thus (pp. 113-114) :
"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 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 Central Governments."
Having pointed out these characteristics, their Lordships held that the State and the Central Governments have full control of the working of the society.
8. In B. S. Minhas v. Indian Statistical Institute (1984-I-LLJ-67) the question arose was whether a Statistical Institute, a society registered under the Societies Registration Act, is an 'authority' within the meaning of Article 12 of the 'Constitution. There again all the tests laid down in the abovementioned cases were referred to. Then their Lordships examined the Memorandum of Association of the Statistical Institute and came to the conclusion that it is dominated by the representatives appointed by the Central Government, and the money required for running the Institute is provided entirely by the Central Government and the accounts of the Institute have also to be submitted to the Central Government for its scrutiny and satisfaction, and the Society has to comply with all such directions as may be issued by the Central Government and that the control of the Central Government is deep and pervasive.
9. In P. K. Ramachandra Iyer v. Union of India (1984-I-LLJ-314) the question was whether the Indian Council of Agricultural Research (I.C.A.R.) and its affiliate institutions are such other authorities as would be comprehended in the expression 'other authority' in Art. 12. There again all these tests were referred to and their Lordships reached the conclusion that the institute was an adjunct of the Government of India and therefore an instrumentality or an agency of the State. In M. K. Agarwal v. Gramin Bank the Supreme Court held that Gurgaon Gramin Bank constituted under the Regional Rural Banks Act, having regard to its constitution and nature of its legal entity and the measure of State control, is an instrumentality of the State and is made of the State's own 'flesh and bones' and is accordingly 'State' within the meaning of Art. 12.
10. Bearing in mind the above principles, if we examine the following decisive features, it is not possible to hold that the Administrative Staff College of India comes within the meaning of "State". The Society was set up by the Committee appointed by the Government and the Memorandum of Association shows that it was established to promote the educational system. The list of members shows that the members of the College Society consist of honorary members, and almost all the leading private undertakings also are members. 13 State Governments are members and some Banks also are members. The object underlying in establishing this College is to enrich and disseminate management knowledge and to improve the professional excellence of executives and administrators. The courses are in respect of the management of public undertakings. The Memorandum of Association and the Rules further show that the ordinary members have to enrich to the College a minimum of Rs. 5,000/- per each year for atleast five years and likewise associate members also have to pay subscription. No doubt, the Government gives certain financial aid. It is stated in the counter-affidavit that the Government of India sanctioned a block grant of Rs. 3 lakhs a year for the first three years i.e., from 1957 to 1960 and Rs. 2 1/2 lakhs a year for the next three years i.e., from 1960 to 1963. But the College did not receive any amount as reimbursement of the expenditure incurred in training a participant over and above the course fee charged with respect to the nominees from the Government. After 1963-64 the Government has been reimbursing the difference. But the mere receipt of aid by itself is not a conclusive test. In Ramana's case (supra), as a matter of fact, it is emphasised that if the entire share capital of the Corporation is held by the Government it would go a long way towards indicating that the Corporation is an instrumentality or agency of the Government, and 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. In Ajay Hasia's case (supra), their Lordships also observed that "the inquiry has to be not as to how the juristic person is born but why it has been brought into existence ...... Whether be its genetical origin, it would be an 'authority' within the meaning of Article 12". Therefore, the origin or the receiving of some financial assistance be itself is not conclusive or clinching and the Hasia's case (supra), some of these tests are not themselves conclusive or clinching and the meaning of "other authority" should not be stretched so far as to bring in every autonomous body within the sweep of the expression.
11. The only two other remaining tests are whether the Government has deep and pervasive State Control and whether any department or Governmental function are transferred to this Society. The Articles of Association referred to above do not in any manner indicate that any department or governmental functions are transferred. The objects in the Memorandum of Association already referred to, show that the College is not a wing of the Education Department, and it is started only for the purpose of enriching and disseminating managemental knowledge and improving the professional excellence of executives and administrators of all its members containing many public as well as private undertakings and other institutions. Therefore, it is clearly distinct from a department of a Government and no governmental functions are being discharged by the Administrative Staff College.
12. The only other question is whether the Government has deep and pervasive State control. The composition of the Court of Governors would go to show that it consists of 17 persons elected by the General Body. Only one person is nominated by the Government of India and the Principal and the Vice-Principal are the ex-officio members and 14 members are to be co-opted by the Court of Governors. It can, therefore, be seen that barring the provision for nomination of one person by the Government of India, the Government has absolutely no manner of control over the constitution of the Court of Governors. The mere fact that number of State Governments and public sector undertakings have chosen to become members of the College society and that eminent persons who held outstanding posts in public life are elected as members of the Court of Governors, does not in any manner indicate that the Government has control over the Court of Governors.
13. At this juncture it is very important to note the latest decision of the Supreme Court in Tekraj v. Union of India (1988-I-LLJ-341). There the question was whether the Institute of Constitutional and Parliamentary Studies (ICPS) registered under the Societies Registration Act, 1860, is 'State' within the meaning of Article 12. Their Lordships referred to the objects of the said Society which are as follows (p. 344) :' "(1) To promote and provide for constitutional and parliamentary studies with special reference to comparative studies in constitutional systems of various countries and working of the Indian Constitution and parliamentary and governmental institutions in their various aspects;
(2) To undertake study of courses and fundamental research relating to developments in constitutional law, conventions and practices, parliamentary procedure, legislative drafting, trends in judicial interpretation and allied matters;
(3) To organise inter alia training programmes in constitutional problems and matters of current parliamentary importance;
(4) To set up a legislative research and reference service for the benefit of all interested members of the Union Parliament and State Legislatures irrespective of their party affiliations;
(5) To undertake and provide for the publication of a journal and of research papers and of books and brochures with a view to disseminate democratic values and to foster broad based civic education and awareness, and in particular, to promote study of constitutional and parliamentary affairs;
(6) To establish and maintain libraries and information services to facilitate the study of constitutional and parliamentary subjects and spread information in regard thereto;
(7) To invite as and when feasible, scholars who may or may not be members of the Society, to take advantage of the facilities offered by the Society and to benefit the Society by their knowledge and experience; and (8) To institute appropriate fellowships, offer prizes and arrange scholarships and stipends in furtherance of the objects of the society"
Then their Lordships also referred to the other aspects and observed thus (p. 344) :
"The memorandum permitted the Society to accept gifts, donations and subscriptions of cash and securities and of any property either movable or immovable. The rule classifies the members under heads like Founder Members. Life Members, Honorary Members, Ordinary Members, Corporate Members and Associate Members. Ordinary Membership, according to the Rules, would extend to Members of Parliament or of any State Legislature or those who have been or are members of the Judiciary or advocates of the Supreme Court or the High Courts or persons employed in public service or persons engaged in teaching of study of social sciences particularly of Political Science, Law or subject related thereto. In the category of Honorary Members were the President, the Vice-President and the Prime Minister of India. Though the Memorandum permitted receipt of gifts and donations from outside, it is not disputed that the main source of income of the Society has been the annual Central Government grant."
Having thus extracted the Memorandum and the other objects of the Society their Lordship considered various tests cited above. Then in paragraph 13 it is observed thus (p. 353) :
Democracy pre-supposes certain conditions for its successful working. It is necessary that there must be a deep sense of understanding mutual confidence and tolerance and regard and acceptance of the views of others. In the early years of freedom, the spirit of sacrifice and a sense of obligation to the leadership that had helped the dream of freedom to materialise had been accepted. The emergence of a new generation within less than two decades of independence gave rise to a feeling that the people's representatives in the Legislatures required the acquisition of the appropriate democratic ideas and spirit. ICPS was born as a voluntary organisation to fulfil this requirement. At the inception it was certainly not a governmental organisation and it has not been the case of the parties in their pleadings nor have we been told at the bar during the long arguments that had been advanced that the objects of ICPS are those which are a State obligation to fulfill. The Society was thus born out of a feeling that there should be a voluntary association mostly consisting of Members of the two Houses of Parliament with some external support to fulfill the objects which were adopted by the Society."
Coming to the birth of the Society and its objects their Lordship summed up as follows (para 14, p. 353) :
"To start with, the Society was accommodated in the Parliament House but in due course is shifted out. The President of India inaugurated the Society. Very appropriately the speaker of the Lok Sabha became its first President and three Ministers, a former Chief Justice of India and a former Attorney-General joined as its Vice Presidents. Some of the public officers were also associated in the administrative set up of the Society. Individual Members of Parliament and the corporate body known as Parliament are certainly two different concepts. Services of some of the employees of Parliament were lent to the Society. While Art. 12 refers to Parliament as such, a few Members of Parliament cannot be considered as Parliament so as to constitute that body as referred to in Art. 12. The Speaker and the Ministers who joined as Vice-Presidents of the society were there in their individual capacities and not as Ministers, though designations were indicated. In the category of Vice-Presidents, Executive Chairman, Treasurer and members, there were many people who were really not a part of Government as such and some of them did not belong to Parliament."
Then their Lordships concluded thus (para 15, p. 353) :
"The objects of the Society were not governmental business but were certainly the aspects which were expected to equip Members of Parliament and the State Legislatures with the requisite knowledge and experience for better functioning. Many of the objects adopted by the Society were not confined to the two Houses of Parliament and were intended to have an impact on society at large".
So far as the acceptance of gifts and donations is concerned, their Lordships observed thus (para 16, pp. 353-354) :
"The Memorandum of the Society permitted acceptance of gifts, donations and subscriptions. There is material to show that the Ford Foundation, a US based Trust, had extended support for some time. Undoubtedly, the annual contribution from the Government has been substantial and it would not be wrong to say that they perhaps constitute the main source of funding, yet some money has been coming from other sources. In later years, foreign funding came to be regulated and, therefore, it became necessary to provide that without Government clearance, like any other institution, ICPS was not to receive foreign donations. No material has been placed before us for the stand that the Society was not entitled to receive contributions from any indigenous source without Government sanction. Since Government money has been coming, the usual conditions attached to Government grants have been applied and enforced. If the Society's affairs were really intended to be carried on as a part of the Lok Sabha or Parliament as such, the manner of functioning would have been different. The accounts of the Society are separately maintained and subject to audit in the same way as the affairs of societies receiving Government grants are to be audited. Government usually impose certain conditions and restrictions when grants are made. No exception has been made in respect of the Society and the mere fact that such restrictions are made is not a determinative aspect."
The further observations made by the Supreme Court in this context are also relevant and they are as follows (para 19, p. 354) :
"We have several cases of societies registered under Societies registration Act which have been treated as "State" but in each of those cases it would appear on analysis that either governmental business had been undertaken by the Society or what was expected to be the public obligation of the "State" had been undertaken to be performed as a part of the Society's function. In a Welfare State, as has been pointed out on more than one occasion by this Court, Governmental control is very pervasive and in fact touches all aspects of social existence. In the absence of a fair application of the tests to be made, there is possibility of turning every non-governmental society into an agency or instrumentally of the State. That obviously would not server the purpose and may be far from reality. A broad picture of the matter has to be taken and a discerning mind has to be applied keeping the realities and human experiences in view so as to reach a reasonable conclusion. Having given our anxious consideration to the facts of the case, we are not in a position to hold that ICPS is either an agency or instrumentality of the State so as to come within the purview of "other authorities" in Art. 12 of the Constitution. We must say that ICPS is a case of its type-typical in many ways and the normal tests may perhaps not properly apply to test its character."
14. The above observations and the ratio laid down by their Lordships in Tekraj's case (supra) apply on all fours to the facts of this case. The object of the Administrative Staff College, as already mentioned, is not government function, but it was only meant to enrich and disseminate managemental knowledge and to improve the professional excellence of executives and administrators of its members and various public undertaking. As a matter of fact, the annual report go to show that the College started centres for Education Policy and Management and for Public Systems and Policy, with a view to enrich and disseminate managemental knowledge and to improve professional excellence of Executives and Administrators. Taking a broad picture of the matter and applying a discerning mind keeping the realities, we think we are not in a position to hold that the Administrative Staff College is as instrumentality or an agency of the State so as to come within the purview of 'other authorities' under Article 12 of the Constitution. Therefore, a writ cannot lie against the College.
15. Now coming to the merits of the case, a committee was set up to review the work of the respondent. The committee reviewed his performance and gave an adverse report. We need not go into the details of same. Having regard to the relationship of master and servant between the Administrative Staff College and the respondent, the College is perfectly within its limits in passing the termination orders.
16. In the result, the writ appeal is allowed, but under the circumstances without costs.