Miscellaneous Part 3
Summary of Question- Maintainability of Writ petition against private body / person
Question – Whether a writ petition would generally be maintainable against a private body or person.
Answer- No. A writ petition is maintainable if the opposite party is “State” or “Authority” or an “Instrumentality” or “Agency” of the State within the meaning of Article 12 of the Constitution of India. A private body or a person is, ordinarily, NOT amenable to writ jurisdiction. There are certain exceptional circumstances in which such a writ petition may be maintainable e.g., where it may become necessary to compel such body or association to enforce any obligation of public nature casting positive obligation upon it.
1. The test propounded in Ramana Dayaram Setty vs. International Airport authority of India [1979 (3) SCC 489] for determining as to when the Corporation would be said to be an instrumentality or agency of the Government for maintainability of Writ Petition has been followed in Pradeep Kumar Biswas’s (2002) 5 SCC 111 Case at para 31. The test given in Ramana’s case at para 14 to 16 are summarized as under:
“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”(vide para14 of Ramana’s case)
“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” (vide para 15 of Ramana’s case).
“It may also be a relevant factor . whether the corporation enjoys monopoly status which is State-conferred or State-protected”( vide para 15 of Ramana’s case)
“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.”( vide para 16 of Ramana’s case)
2. The decision in General Manager, Kisan Sahkar Chini Mills Limited, Sultanpur, UP vs. Satrughan Nishad and Ors. (2003) 8 SCC 639 is also relevant. In this case the appellant was engaged in the manufacture of sugar. The respondents were the workers of the appellant and they filed writ petitions contending that they had to be treated as permanent workmen. Short fact of the case was that the appellant was Co-operative Society and Uttar Pradesh Co-operative Sugar Factories Federation Limited, which is the apex body of cooperative sugar mills in the State and whose function being advisory in order to safeguard operational and financial interest of the sugar mills, on 22nd November, 1999, Chairman-cum-Managing Director of the Federation, who was also Secretary to the Government of Uttar Pradesh in the Department of Sugar Industry and Cane Development, had sent a letter to General Manager of the Mill in which it was mentioned that during the course of discussion the Managing Director had with the General Manager and other officers of the Mill, it transpired that out of 708 workmen working in the Mill, 401 were surplus whose services were required to be dispensed with in view of the deteriorating financial condition of the Mill. By the said letter the Mill was advised to consider the desirability of dispensing with services of its surplus workmen. Thereupon, services of surplus workmen were dispensed with without giving any notice and paying retrenchment compensation as required under Section 6N of Uttar Pradesh Industrial Disputes Act, 1947. The Hon’ble Single Judge of the High Court held that the Mill was State within the meaning of Article 12 of the Constitution as it was instrumentality of the State. The Division Bench of the Hon’ble High Court affirmed by the decision. The Apex Court observed and held at para 8 as quoted below:
“ 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.”
2.1. Therefore, merely because a company is Govt. Company it is not state within the meaning of Article 12 of the Constitution of India and not amenable to writ jurisdiction under Article 226 of the Constitution of India. The authority of the Hon’ble e supreme court in (2003) 8 SCC 639 at para 8 is quoted below :
“ ……. 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…………….”
3. In VST Industries Limited vs. VST Industries Workers' Union and Anr.(2001) 1 SCC 298, the appellant-company was engaged in the manufacture and sale of cigarettes. A petition was filed by the first respondent under Article 226 of the Constitution seeking a writ of mandamus to treat the members of the respondent Union, who were employees working in the canteen of the appellant's factory, as employees of the appellant and for grant of monetary and other consequential benefits. The canteen was provided in the factory premises of the appellant pursuant to Section 46 of the Factories Act, which obliges a factory employing more than 250 workmen to provide such a canteen. The respondent contended that the appellant had been managing the canteen up to the year 1982 and thereafter introduced the contract system for maintaining the canteen so established. As such, the respondent contended that in running a canteen under Section 46 of the Act, the appellant was discharging a public duty and, therefore, a writ of mandamus would lie against it. Speaking for the Bench, Hon’ble Mr. Justice Rajendra Babu, (as he then was), observed and held as follows:
"7. In de Smith, Woolf and Jowell's Judicial Review of Administrative Action, 5th Edn., it is noticed that not all the activities of the private bodies are subject to private law, e.g., the activities by private bodies may be governed by the standards of public when its decisions are subject to duties conferred by statute or when by virtue of the function it is performing or possible its dominant position in the market, it is under an implied duty to act in the public interest. By way of illustration, it is noticed that a private company selected to run a prison although motivated by commercial profit should be regarded, at least in relation to some of its activities, as subject to public law because of the nature of the function it is performing. This is because the prisoners, for whose custody and care it is responsible, are in the prison in consequence of an order of the court, and the purpose and nature of their detention is a matter of public concern and interest. After detailed discussion, the learned authors have summarized the position with the following propositions:
(1) The test of a whether a body is performing a public function, and is hence amenable to judicial review, may not depend upon the source of its power or whether the body is ostensibly a "public" or a "private body".
(2) The principles of judicial review prima facie govern the activities of bodies performing public functions.
(3) However, not all decisions taken by bodies in the course of their public functions are the subject matter of judicial review. In the following two situations judicial review will not normally be appropriate even though the body may be performing a public function
(a) Where some other branch of the law more appropriately governs the dispute between the parties. In such a case, that branch of the law and its remedies should and normally will be applied; and
(b) Where there is a contract between the litigants. In such a case the express or implied terms of the agreement should normally govern the matter. This reflects the normal approach of English law, namely, that the terms of a contract will normally govern the transaction, or other relationship between the parties, rather than the general law. Thus, where a special method of resolving disputes (such as arbitration or resolution by private or domestic tribunals) has been agreed upon by the parties (expressly or by necessary implication), that regime, and not judicial review, will normally govern the dispute.”
3.1. Applying the above principles, the Apex Court held the writ petition as not maintainable.
Summary of Question- ‘Dispose of the Representation’ mantra
Question – Whether Hon’ble High Courts / Tribunals should dispose of an application with just direction to the applicant to make representation to the opposite party and direction to the opposite party to dispose of the representation.
Answer- No. The Hon’bler Supreme Court does not favour that High Courts / Tribunals should use “Dispose of the representation” mantra.
In CIVIL APPEAL NO.2425 of 2019 (THE GOVT. OF INDIA Vs. P. VENKATESH), decided on 1st.March 2019, a case related to compassionate appointment, the Hon’ble Supreme Court observed :
"The Tribunal, unfortunately, passed a succession of orders calling upon the appellants to consider and then re-consider the representations for compassionate appointment. After the Union Ministry of Information and Broadcasting rejected the representation on 13 November 2007, it was only in 2010 that the Tribunal was moved again, with the same result. These successive orders of Tribunal for re-consideration of the representation cannot obliterate the effect of the initial delay in moving the Tribunal for compassionate appointment over a decade after the death of the deceased employee. This ‘dispose of the representation’ mantra is increasingly permeating the judicial process in the High Courts and the Tribunals. Such orders may make for a quick or easy disposal of cases in overburdened adjudicatory institutions. But, they do no service to the cause of justice. The litigant is back again before the Court, as this case shows, having incurred attendant costs and suffered delays of the legal process. This would have been obviated by calling for a counter in the first instance, thereby resulting in finality to the dispute. By the time, the High Court issued its direction on 9 August 2016, nearly twenty one years had elapsed since the date of the death of the employee."
Summary of Question- Second Appeal under CPC ; Substantial Question Law mandatory
Question – Whether it is obligatory for the High court to formulate substantial question law in Second Appeal.
Answer- Yes. In Second Appeal, it is obligatory for the High Court to first formulate the appropriate substantial question of law and then deal with the same. It is so , even if findings of lower court is perverse.
1. In CIVIL APPEAL No. 1301 of 2019 , decided on 30th. January 2019, the Apex Court observed and held:
"Even on a fair reading of the judgment, we are of the considered opinion that the High Court proceeded to decide the Second Appeal without formulating any substantial question of law, which it ought to have done in view of the mandate of Section 100 of the Code of Civil Procedure, 1908 and the consistent view taken by this Court including in 2012 (4) SCC 344 – Hardeep Kaur Vs. Malkiat Kaur....."
2. With regard to the submission of the learned counsel of the respondent to the effect that the findings of the trial court and affirmed by first Appellate Court being perverse, the High Court, in second Appeal , interfered without framing substantial question of law, the Apex Court in the said case held:
" In our view, even if the High Court wanted to so hold, it was obligatory, to first formulate the appropriate substantial question of law and then deal with the same....... "
Summary of Question- Second Appeal under CPC ; No re-appreciation of evidence.
Question – Whether Evidence can be re-appreciated in Second Appeal.
Answer- No. In Second Appeal under section 100 CPC, High Court cannot re-appreciate evidence like First Appeal under section 96 CPC.
In CIVIL APPEAL NO.6567 OF 2014, decided on 13th March 2019, the Hon’ble Supreme Court observed and held :
“….However, in Second Appeal under Section 100 of the CPC, the High Court, by impugned judgment and order has interfered with the Judgment and Decree passed by the First Appellate Court. While interfering with the judgment and order passed by the first Appellate Court, it appears that while upsetting the judgment and decree passed by the First Appellate Court, the High Court has again appreciated the entire evidence on record, which in exercise of powers under Section 100 CPC is not permissible. While passing the impugnd judgment and order, it appears that High Cout has not at all appreciated the fact that the High Court was deciding the Second Appeal under Section 100 of the CPC and not first appeal under Section 96 of the CPC. As per the law laid down by this Court in a catena of decisions, the jurisdiction of High Court to entertain second appeal under Section 100 CPC after the 1976 Amendment, is confined only when the second appeal involves a substantial question of law. The existence of ‘a substantial question of law’ is a sine qua non for the exercise of the jurisdiction under Section 100 of the CPC."
“Before parting with the present judgment, we remind the High Courts that the jurisdiction of the High Court, in an Appeal under Section 100 of the CPC, is strictly confined to the case involving substantial question of law and while deciding the second appeal under Section 100 of the CPC, it is not permissible for the High Court to re- appreciate the evidence on record and interfere with the findings recorded by the Courts below and/or the First Appellate Court and if the First Appellate Court has exercised its discretion in a judicial manner, its decision cannot be recorded as suffering from an error either of law or of procedure requiring interference in Second Appeal. We have noticed and even as repeatedly observed by this Court and even in the case of Narayanan Rajendran v. Lekshmy Sarojini, (2009) 5 SCC 264, despite the catena of decisions of this Court and even the mandate under Section 100 of the CPC, the High Courts under Section 100 CPC are disturbing the concurrent findings of facts and/or even the findings recorded by the First Appellate Court, either without formulating the substantial question of law or on framing erroneous substantial question of law.
Therefore, we are constrained to observe as above and remind the High Courts the limitations under Section 100 of the CPC and again hope that High Courts would keep in mind the legal position before interfering in Second Appeal under Section 100 of the Code of Civil Procedure."