D.P. Wadhwa, J.
(1) Services of the petitioner who was working as Chief Executive (Corporate Affairs) in Swadeshi Polytex Limited (respondent No.2), a public limited company, were terminated by order dated20June 1991 of the third respondent- Chairman and Managing Director (CMD)ofrespondent No.2,anofficer of the Indian Administrative Service. The petitioner seeks an appropriate order, or a writ of certiorari quashing that order being vocative of principles of natural justice and vocative of Articles 14 and 21 of the Constitution. He further seeks an appropriate direction or order or writ in the nature of mandamus declaring that the third respondent had no legal authority to terminate his services. There is also a prayer that the appointment of the third respondent as C.M.D. of the company was itself irregular and void, but that prayer has not been pressed. Yet another prayer was that a direction, writ or order be issued directing the respondents to continue the services of the petitioner till the completion of his service tenure. Since during the pendency of the writ petition that service tenure was over, again this prayer was not pressed, it having become infructuous.
(2) There are three respondents. First respondent is Union of India in the Ministry of Textile through its Secretary, and the second and third respondents, as noted above, are respectively the company and the CMD. The principal contention of the respondents which we may note at the very threshold of this judgment is that the company, the second respondent is not a State within the meaning of Article 12 of the Constitution and, thus, not amenable to writ jurisdiction of this Court under Article 226 of the Constitution. We may now briefly give the facts of the case which are not in dispute.
(3) The petitioner was earlier an employee of Ici India Limited from where he retired in 1989. A letter dated 22 July 1988 was addressed to him by the then Chairman of the Company, the second respondent offering him the appointment as Chief Executive (Corporate Affairs) of the company at a fixed salary ofRs.l2,500.00 per month on certain terms. A regular letter of appointment was issued to the petitioner on 22 February 1989 which spelled out in detail the terms and conditions of the employment of the petitioner. He was to be paid Rs. 12,500.00 per month as his salary and given other perks as per rules of the company. The petitioner was told that his tenure of service would be three years subject to extension by another two years at the discretion of the company with a rider that services could be terminated by either party by giving three months notice or paying salary in lieu thereof. This was term No. 18 of the letter of appointment. On 20 June 1991 the C.M.D., the third respondent addressed a letter to the petitioner drawing his attention to this term and saying that services of the petitioner were no longer required, and thereforee, stood terminated with immediate effect. The petitioner was told that he was entitled to three months salary in lieu of notice after dues, if any. from him to the company. By letter dated 27 June 1991 the petitioner asked the C.M.D. to give him reasons as to why he was issued the letter of termination and for an opportunity to state his case, if necessary. The petitioner said this might be useful to reconsider the matter by the C.M.D. A public notice, also appeared in the Hindustan Times on 26 June 1991 in the name of the C.M.D. that the petitioner had ceased to be in the employment of the company w.e.f. 20 June 1991 and that all authorities vested with him remained withdrawn from that date. It has not been made clear to us as to what was the necessity of issuing such a public notice. Then by letter dated 16 July 1991 the petitioner objected to the arbitrariness and unlawful action of the C.M.D. in terminating his services and requested him to withdraw the letter of termination and restore his status and facilities due to him. Since nothing happened this petition was filed on 31 July 1991.
(4) The second respondent is not a Government company as defined in section 617 of the Companies Act, 1956. For the purpose of that Act,Govemment company means any company in which riot less than 51% of the paid up share capital is held by the Central or State Government and includes a company which is subsidiary of a Government company. Public financial institutions have been specified in section 4A of the Act and these include Industrial Development Bank of India (IDBI), Life Insurance Corporation of India (LIC), Unit Trust of India (UTI), Industrial Finance Corporation of India (IFCI) and General Insurance Corporation of India (GIC) as per notification issued under sub-section (2) of section 4A of the Act. The shareholding of the second respondent is as under:-
____________________________________________________________________________ Name of the Institution No of % age shares ____________________________________________________________________________ Private Investors 19,85,450 50.91 National Textile Corporation (U.P.) Ltd. 13,11,000 33.61 Financial Institution Industrial Development Bank of India 3,14,300 8.06 Industrial Finance Corporation of India 71,400 1.83 Life Corporation of India 1,71,5754 4.53 Unit Trust of India 32,3754 0.83 General Insurance Corporation of India 2,4254 0.06 Nationalised Banks 6.475 0.17 Sub Total: 6.03.440 15.48 Total; 9.00.0004 100.00% ____________________________________________________________________________
(5) From the shareholding it is apparent that the second respondent is not a Government company Respondents have contended that affairs of second respondent are managed by a Board of Directors and that the company is governed by its own Memorandum and Articles of Association. Respondents have stated that National Textile Corporation (U.P.) Limited is a subsidiary of National Textile Corporation Ltd (NTC), a Government Company. It is stated that prior to I April 1985 shares now being held by Ntc (UP) Limited were held by Swadeshi Cotton Mills Company Limited, a public limited company, and after that date by virtue of the provisions of Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertaking) Act, 1986, the shares held by Swadeshi Cotton Mills Company Limited and by its subsidiary vested in the Central Government and immediately thereafter the said shares stood transferred and vested in the NTC. Further by virtue of transfer of textile undertaking of Swadeshi Cotton Mills Company Limited the shareholding in Swadeshi Polytex Limited, the second respondent stood transferred to Ntc (UP) Limited. The Board of Directors of second respondent at the relevant time had three nominees of Ntc, two nominees of the financial institutions, and two nominees from the private investors. Respondents contend that merely because that nominees of the financial institutions and the Ntc are on the Board of Directors of the second respondent it neither means that Ntc is in the management of the second respondent nor that the Central Government is controlling that company. It is stated that Central Government is neither a party to the management policy of the company nor the actions of the management require any approval of the Central Government except where any statute so requires. There is no de jure or de facto control by the Central Government, so the respondents put. It is also stated by respondents that the Central Government does not appoint Cmd of the second respondent and that it is done by the Board of Directors of the second respondent. They say that the petitioner has created a wrong impression that Cmd of Ntc automatically becomes the ex officio Director or Cmd of the second respondent and also that merely because the third respondent is an I.A.S. officer it would not mean that Central Government is in control of the company.
(6) There is no dispute about the shareholding of the second respondent. In M/s.Doypack Systems Pvt. Ltd v. Union of India & others : 1988(36)ELT201(SC) the question for consideration was whether equity shares in the two companies, i.e.,10 lakhs share in Swadeshi Polytex Limited and 17,18,344 shares in Swadeshi Mining and . (Acquisition and Transfer of Undertakings) Act, 1986. The Supreme Court answered the question in affirmative in favor of the NTC. The judgment was given on 12 February 1988. The Supreme Court held that the shares so vested in the Central Government and under sub-section (2) of section 3 of that Act these now vested in Ntc which had right over the said shareholding of Swadeshi Polytex Limited.
(7) After decision of the Supreme Court three successive CMDs of Ntc have been appointed as CMDs of the second respondent. First Cmd was Mr. Ajit Singh, the second Mr. V. Sandal-am and the third who is respondent No.3 Mr. R. Ramakrishna. All the three belong to the Indian Administrative Sercice. The two letters, first offering appointment and second the letter of appointment, which have been mentioned above, were given by Mr. Ajit Singh as Chairman of the second respondent. The impugned letter terminating the services of the petitioner had been given by Mr. R. Ramakrikshna, an I.A.S. officer describing himself as the Cmd of the second respondent. Government servants do not cease to be so merely because, for the time being, they are allotted to different institutions [see State of Gujarat and another v. Raman Lal Keshav Lal Soni and others ( : (1983)ILLJ284SC ]. In this case an argument was raised that several Panchayat Institutions were declared to be bodies corporate by a State Act and, thereforee, their servants could not be Government servants. The court upheld this contention and held that 'Government servants do not cease to be Government servants merely because, for the time being, they are allotted to different Panchayat Institutions and are paid out of the funds of those institutions.'
(8) In S.S. Dhanoa v. Municipal Corporation. Delhi, and others : 1981CriLJ871 the services of the appellant, a member of Indian Administrative Service, were placed at the disposal of a cooperative society (Super Bazar) registered under the Bombay Cooperative Societies Act, 1925, as extended to Delhi. The question was whether the appellant was a public servant within the meaning of Clause (12) of Section 21 of the Indian Penal Code for the purpose of section 197of the Code of Criminal Procedure. The court held that during his period of deputation the appellant was not an officer in the service or pay of the Government, nor was he in the service of a local authority, a corporation established by or under an Act or a Government company. The court held that term 'corporation' was wide enough to include private corporations, but said that in the context of Clause (12) of Section 21 of the Indian Penal Code, the expression 'corporation' must be given a narrow legal connotation, and meant, a corporation created by the Legislature and not a body or society brought into existence by an act of a group of individuals. The court said that a cooperative society was not a statutory body because it was not created by a statute and that it was a body created by an act of a group of individuals in accordance with the provisions of a statute. The court, thus, held that a cooperative society was, thereforee, not a corporation established by or under an Act of the Central or State Legislature, and that a Government employee working on deputation in a cooperative society can, by no stretch of imagination be said to be employed in connection with the affairs of the Union within the meaning of section 197, Criminal Procedure Code . We do not find this judgment to be relevant to the issue involved in the present case before us.
(9) The second respondent need not be a Government company as defined in section 617 of the Companies Act and it may also not be subsidiary of Ntc in strict sense of the term as defined in section 4 of that Act We any note that sub-section (1) of section 4 which defines holding company and subsidiary says that for the purposes of the Companies Act a company shall, subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only if that other controls the composition of its Board of Directors. Then sub-section (3) and other sub-sections spell out the conditions, but those may not be strictly relevant for our purposes and we need not go into the question if the second respondent is a subsidiary of Ntc, as we find that Ntc in effect controls the affairs of the second respondent. We have seen the constitution of the Board of the second respondent. Three of the Directors including the Cmd are the nominees of Ntc, a Government company, and two are nominees of financial institutions which are all statutory corporations and 'State' within the meaning of Article 12 of the Constitution. The other two members of the Board of the second respondent are nominees of the private investors. Third respondent is also the Cmd of NTC. We have also seen above that difference in shareholdings between the private investors and the Ntc and other financial institutions is very marginal, otherwise second respondent could well have been a Government company. That the affairs of second respondent are governed by its Memorandum and Articles of Association, appears to be an attractive argument and would be even so, but then it is the nominees of the State which are at the helm of affairs of the second respondent and the contention in the present case of the respondents that it is beyond the reach of this Court in writ jurisdiction under Article 226 of the Constitution is a mere pretence. There is no specific denial to the averment made by the petitioner that before he was appointed there were series of interviews and ultimately he was selected by a panel of experts which included Textile Secretary to the Government of India. Petitioner has also drawn our attention to an extract from the minutes of the meeting of the Board of Directors of the second respondent held on 5 August 1991 which was fought on record by the respondents. In this certain discussions have been recorded regarding the confirmation of the minutes of the previous meeting held on 4 May 1991. In the meeting of 4 May 1991 two-resolutions were passed. By first resolution the third respondent was appointed Chairman of the Board and by the second resolution the third respondent was appointed Managing Director of the company 'pursuant to provisions of Articles of Association and sections 269, 316 and other applicable provisions of the Companies Act, 1956, for a period of two years from the date on which new duly elected Managing Director assumes office whichever is earlier.' When these minutes came for confirmation in the meeting of the Board on 5 August 1991 one of the members Of the Board pointed out that notice for appointment of the third respondent as Managing Director of the company had not been circulated as an 'agenda item' and hence requirement of section 316(2) had not been complied with. The minutes record that Chairman pointed out 'that as already notified to all the Board Members that the minuted item 5/18 reads as follows:-
'SHRIV. Sundaram then proposed that as already notified to all the Board Members Shri R. Ramakrishna was also to be appointed as Managing Director of the Company.'
(10) Then the minutes go on to record as under :-
'THIS indicated that there was a prior notification to all the Members. The Section 316(2) only talks of 'specific Notice' having 'been given to all Directors then in India'. The Section does not talk of a notice being given as part of the Agenda. Shri Sundaram clarified that pursuant to instructions from Government, he had taken every Director into confidence individually and collectively and that was tantamount to sufficient notice. The matter was hot only discussed prior to the Board Meeting on 4.5.1991 but: it was also discussed extensively in the meeting of 4.5.91 itself. All these are indicative of the fact that the matter had been sufficiently notified to the Board Members and that unanimous consent was given in the Board. The objection taken by Shri Gaurav Swarup was, there fore, over-ruled.'
(11) Reference to these minutes was made to show that instructions were being issued by the Government and that Articles of Association of the second respondent did not provide for any instructions from the Government. We have not been shown any provision under which a member of the Indian Administrative Service or for that matter any Government servant could act as the Chairman and Managing Director of a company incorporated under the Companies Act, 1956 which is not a Government company. As we see the records of this case, the third respondent has become Cmd of the second respondent because he is also the Cmd of NTC. a Government company. Mr. P.V. Kapur, learned counsel for the .petitioner, said that the Central Government in this case was exercising 'deep and pervasive' control in the second respondent as a result of which it would be a State under Article 12 of the Constitution. He said assuming that second respondent is not a State, the court would nevertheless be entitled to assume, and the petitioner entitled to invoke, its jurisdiction under Article 226 of the Constitution since the court can issue an order or direction to a person in contradistinction to a State or authority. He said such an order could be issued if that person 'wears the hat' of the Government and exercises public functions. Mr. Kapur said justice of the case demanded that court would certainly issue a direction or an order against the second respondent or the third, as the case might be. We have seen above that the Ntc and the financial institutions have overwhelming majority in the Board of Directors. Their shareholding is such that for all times to come they could exercise control over the company and directions are in fact issued by the Central Government for the conduct of the affairs of the second respondent. Appointment of senior officers, and in any case that of the petitioner, had been made by the Cmd and also terminated by the Cmd, an officer of the Central Government. Mr. - Kapur said he was not asking for any mandamus and was praying only for an appropriate order or direction in the matter and that this Court could in exercise of jurisdiction under Article 226 of the Constitution do that. Mr. Kapur referred to a decision of the Andhra Pradesh High Court in T. Gattaiah and another v. Commissioner of Labour and others. 1981 Lab.I.C. 942, which he said was noticed in a Full Bench decision of the Andhra Pradesh High Court in Sri Konaseema Co-operative Central Bank Ltd., Amalapuram and another v. N. Seetharama Raja, Air 1990 A.P. 171, wherein in was mentioned that as held in Gattaiah's case writ could undoubtedly be issued against a co-operative society on the basis that it was a 'person' within the meaning of Article 226, and that decision in Gattaiah's case was affirmed by a Division Bench in appeal reported in(1982)1 Andh. L.T.12. Mr. Kapur said these judgments were authorities for the proposition he was advancing and that even a writ could lie against a company incorporated under the Companies Act.
(12) Mr. Ganesh. learned counsel for the respondents, would have nothing of the sort. He asserted that the second respondent was not a State covered under Article 12 of the Constitution. He said that subject-matter and relief claimed in the petition fell in the domain of private law and not public law. He said the only remedy was a civil suit. There was no violation of any fundamental right or even statutory right of the petitioner. Mr. Ganesh said there was purely a relationship of master and savant, a contractual relationship between the petitioner and the second respondent a company. Mr. Ganesh said no mandamus could be issued as there was no statutory duty cast on the second . respondent to continue the petitioner in employment. No writ of certiorari could also be issued as the impugned order, terminating the services of the petitioner, was not a quasi judicial order. Lastly, Mr. Ganesh said that disputed questions of facts arose in the petition and the petitioner could not say that there was no other equally efficacious remedy 496 1993(25)
(13) Available to him which in fact was there in the form of filing a civil suit.
(14) Mr. Ganesh also relied on the Full Bench decision of the Andhra Pradesh High Court in Sri Konaseema Co-operative Central Bank Ltd, Amalapuram and another v.N. Seetharama Raju AIR 1990 AP 171 where the Full Bench, however, observed that a writ could be issued against a cooperative society on the basis that it was a 'person' within the meaning of Article 226 only where the petitioner was seeking enforcement of a statutory public duty. Again in subsequent para reverting to the judgment in Gattaiah's case the Full Bench said that the following proposition was beyond dispute:-
'EVEN if a particular Society cannot be characterised as a 'State' within the meaning of Art. 12 of the Constitution, even so a writ would lie against it to enforce a statutory public duty which a person is entitled to enforce. In such a situation, it is unnecessary to go into the question whether the Society is a 'person' or an 'authority', within the meaning of Art. 226. What is material is the nature of the statutory duty placed upon it. This is the principle affirmed in Gattaiah, affirmed by the Bench in Writ Appeal No. 16/1991.'
(15) The issue before the Full Bench was whether a writ petition could lie against a cooperative society and if that did, in what circumsiances. The context was the enforcement of bye-laws governing service conditions of employees. The Full Bench was of the view that if a particular cooperative society could be characterized as 'State' within the meaning of Article 12 of the Constitution, it would also be an 'authority' within the meaning, and for the purpose, of Article 226 of the Constitution and that in such a situation an order passed by the Society against its employee in violation of the bye-laws could be corrected by way of a writ petition. A society which is a 'State' has to act in conformity with Article 14 and for that reason it could be made to follow bye-laws. The court said that bye-laws made by a cooperative society registered under the Andhra Pradesh Cooperative Societies Act did not have the force of law and were in the nature of contract and where the society could not be characterised as 'State' the service conditions of its employees governed by bye-laws could not be enforced through a writ petition. Finally, the court said mandamus, certiorari, and prohibition were public law remedies, and they were not available to enforce private law rights. It held that every act of a society which might be a 'State' did not necessarily belong to public law field, and that such a society, which was a 'State', might have its private law rights just like a Government. The court finally said that a contractual obligation, which was not statutory, could not be enforced by way of a writ petition under Article 226 of the Constitution.
(16) Under Article 226 of the Constitution, the High Court has power to issue to any person or authority, including in appropriate cases, any Government, directions, orders, or, writs, including writs in the nature of habeas coipus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part Iii (fundamental rights) and for any other purpose. In contradistinction to this, Article 32 empowers the Supreme Court to issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and ceitiorari, whichever may be appropriate, for the enforcement of any of the rights conferred, by part III. Language of Article 226 talks of no limitations on the power of the High Court There is considerable divergence of views on the interpretation of the words 'person' if a writ 497 could issue against a person under Article 226 of the Constitution. Under Clause (1) of Article 367, unless the context otherwise requires, the General Clauses Act, 1897,shall, subject to any adaptations and modifications that may be made therein under Article 372, apply for the interpretation of the Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India. 'Person', under section 2(42) of the General Clauses Act, shall include any company or association or body Of individuals, whether incorporated or not. Constitution is not a statute. It is a fountain head of all the statutes. When the language of Article 226 is clear, we cannot put shackles on ourselves to limit our jurisdiction by putting an interpretation on the words which would limit our jurisdiction. When any citizen or person is wronged. High Court will step in to protect him, be that wrong be done by the State, an instrumentality of the State, a company or association or body of individuals whether incorporated or not,or even an individual. Right that is infringed may be under Part Iii of the Constitution or any other right which the law validly made might confer upon him..
(17) Article 226 does not inhibit the right of the High Court in the exercise of its jurisdiction. Its powers under Article 226 are all pervasive subject only to certain self imposed limitations it will exercise that power throughout the territory in relation to which it exercises jurisdiction. Clause (2) of this Article similarly empowers a High Court in relation to the territories within which the cause of action, wholly or in part, arises. Must we refer to any judgment when the language of Article 226 itself is explicit Nevertheless, since the power conferred upon the High Court under Article 226 is so vast, the court itself has laid down certain guidelines and self imposed limitations subject to under which it will exercise jurisdiction, but those guidelines cannot be mandatory in all circumstances. For example, the High Court does not interfere when an equally efficacious alternative remedy is available or when there is established procedure to remedy a wrong or enforce a right. It does not act like a proverbial 'bull in china shop' in the exercise of its jurisdiction under Article 226. It is not necessary for us to compare the exercise of power by the High Court under Article 226 of the Constitution and that by the Supreme Court under Article 32 thereof.
(18) In Rohtas Industries Ltd. and another v. Rohtas Industries Staff Union and others : (1976)ILLJ274SC , the Supreme Court observed as under-
'THE expansive and extraordinary power of the High Courts under Article 226 is as wide as the amplitude of the language used indicates and so can affect any person - even a private individual - and be available for any (other) purpose, even one for which another remedy may exist. ..... But it is one thing to affirm the jurisdiction, another to authorise its free exercise like a bull in a china shop. This Court has spelt out wise and clear restraints on the use of this extraordinary remedy and High Courts will not go beyond those who lissome inhibitions except where the monstrosity of the situation or other exceptional circumstances cry for timely judicial interdict or mandate. The mentor of law is justice and a potent drug should if, judiciously administered. Speaking in critical retrospect and portentous prospect, the writ power has, by and large, been the people's sentinel on the qui vive and to cut back on or liquidate that power may cast a peril to human rights. '
(19) We get sufficient support to our view from the judgment in Gattaiah's case and though the Full Bench in Sri Konaseema Cooperative Central Bank Ltd.'s case said that in that case the petitioner was seeking enforcement of a statutory public duty.
(20) We may now refer to some of the judgments cited at the Bar.
(21) In Banchhanidhi Rath v. The State of Orissa and others : AIR1972SC843 the petitioner had asked for a writ of mandamus seeking quashing of certain order passed by the Inspector of Schools retiring the petitioner on his attaining the age of 58 years. The court noticed that the management of the school by a resolution was passed over to the Government which was giving grants-in-aid to the school. The court said that the Government, thereforee, managed the school and it had made a uniform policy, that a teacher should be retired on attaining the age of 58 years. The court, thereforee, held that there was no right of the petitioner to remain in service. At the same time, the court observed that if a right was claimed in terms of a contract, such a right could not be enforced in a writ petition.
(22) In Kulchhinder Singh and others v. Hardayal Singh Brar and others : (1976)IILLJ204SC the question was whether a writ would issue under Article 226 against a society registered under the Punjab Cooperative Societies Act setting aside a selection list at the instance of the aggrieved party who was not included therein. The High Court had held that the writ petition would be incompetent. The argument in the Supreme Court proceeded on the basis that the society was 'other authority' within the meaning of Article 12 of the Constitution, and, thereforee, fell within the definition of State. It was also contended that the society was a 'public authority'. Yet another plea raised was that a society registered under the Cooperative Societies Act was subject to the jurisdiction of the High Courts under Article 226 since this provision was widely worded and a writ may be issued for any purpose against any person. The court found that 'writ petition will disclose that essentially the appellant is seeking merely to enforce an agreement entered into between the employees and the cooperative bank'. The court held that remedy of Article 226 was unavailable to enforce a contract qua contract.
(23) Then the court went on to observe as under:-
'WE fail to see how a supplier of chalk to a government school or cheese to a government hospital can ask for a constitutional remedy under Art. 226 in the event of a breach of a contract, by-passing the normal channels of civil litigation. We are not convinced that a mere contract agreeing to a quota of promotions can be exalted into a service rule or statutory duty. What is immediately relevant is not whether the respondent is State or public authority but whether what is enforced is a statutory duty or soverign, obligation or public function of a public authority. Private law may involve a State, a statutory body, or a public body in contractual or various actions. But they cannot be siphoned off into the writ jurisdiction. The controversy before us in substance will turn on the construction and scope of the agreement when the claim to a quota as founded can not be decided in writ jurisdiction without going back on well-settled guidelines and even subverting the normal processual law except perhaps in extreme cases which shock the conscience of the Court or other extraordinary situation, an aspect we are not called upon to explore here. We are aware of the wide amplitude of Art. 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course, without even statutory complexion, can be enforced by this short, though, wrong cut. '
(24) In Lekhraj Sathramdas Lalvani v. N.M. Shah, Deputy Custodian cum Managing Officer, Bombay, and others : [1966]1SCR120 the Supreme Court said that a writ of mandamus might be granted only in a case where there was a statutory duty imposed upon the officer concerned and there was a failure on the part of that officer to discharge that statutory obligation. It said that the chief function of the writ was to compel the performance of public duties prescribed by statute and to keep the subordinate tribunals and officers exercising public functions within the limits of their jurisdictions, any duty or obligation falling upon a public servant out of a contract entered into by him as such public servant could not be enforced by the machinery of a writ under Art. 226 of the Constitution.
(25) In Anadi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsov Smarak Trust and others v. V.R. Rudani and others : (1989)IILLJ324SC the court said that if rights were purely of a private character no mandamus could issue, and that if the management of the college was purely a private body with no public duty mandamus would not lie. In this case, the appellant, a tru, was running a science college and was affiliated to the Gujarat University. There was some dispute regarding implementation of certain pay scales of the teachers which was raised by the University Area Teachers Association. The Chancellor of the University gave his award on the dispute which was accepted by the State Government as well as the Gujarat University. Instructions were issued to all the affiliated colleges to pay their teachers in terms of the award. The appellants instead of implementing the award served notice of termination upon Ii teachers on the ground that they were surplus and approached the University for termination of their services. That was refused. The trust then decided to close down the college itself and informed the University that from a particular year it would not admit any student. The college teachers filed a writ petition seeking a writ in the nature of mandamus or any other appropriate writ, direction or order directing the appellants to pay to them their due salary and allowances, etc. The petition was resisted by the appellant trust and one of die grounds was that it was not a statutory body and not subjected to the writ jurisdiction. The High Court allowed the petition and on certificate granted the trust filed the appeal before the Supreme Court. In para 10 of the judgment the Supreme Court has noticed two questions for consideration and one of these being, 'the maintainability of the writ petition for mandamus as against the management of the college'. The contention raised was that the trust was a private institution against which no writ of mandamus could be issued. The court observed that the law relating to mandamus had made the most spectacular advance. The court then referred to as to how the prerogative writs in England started with very limited scope and suffered from many procedural disadvantages. It said that in England the prerogative writ of mandamus was confined only to public authorities to compel performance of public duty and for them the 'public authority' meant every body which was created by statute - and whose powers and duties weak defined by statute. The court pointed out that Article 226, however, conferred, wide powers on the High Court to issue writs in the nature of prerogative writs. This, the courtsaid, was a striking departure from the English law, and under Article 226 writ could be issued to any person or authority and it could be issued for the enforcement of any of the fundamental rights and for any other purpose. Then the court held as under:-
(26) The term 'authority' used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Art. 32. Article 226 confers power on the High Courts to writs for enforcement of the fundamental rights as well as non-fundamental rights.. The words 'Any person or authority' used in Article 226 are, thereforee, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owned by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied.
(27) In All India Sainik Schools Employees Association v. The defense MinistercumChairman, Board of Governors, Sainik School Society, New Delhi and others AIR 1989 S.C. 88 the court held that the Sainik School Society was 'Slate' inasmuch as the entire funding was by the State and Central Governments and that the overall control vested in the governmental authority. In this case the petitioners had filed the petition under Article 32 of the Constitution and the court held that Article 14 was applicable.
(28) In Life Insurance Corporation of India v. Escorts Ltd. and others : 1986(8)ECC189 , which was an appeal from the Bombay High Court, the court examined the argument of the' Attorney General who had contended that actions of the State or an instrumentality of the State, which did not properly belong to the field of public law but belong to the field of private law were not liable to be subjected to judicial review. The court was of the view that there was considerable force in this contention but said it might not be necessary for it to enter into a lengthy discussion of the topic before it. Then the court went on to observe -
'WE also desire to warn ourselves against readily referring to English cases on questions of Constitutional law. Administrative Law and Public Law as the law in India in these branches has forged ahead of the law in England, guided as we are by our Constitution and uninhibited as we are by the technical rules which have hampered the development of the English law. While we do not for a moment doubt that every action of the State or an instrumentality of the State must be informed by reason and that, in appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Art. 226 or Art. 32 of the Constitution, we do not construe Art. 14 as a charter for judicial review of State actions and to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. For example, if the action of the State is political or sovereign in character, the Court will keep away from it. The Court will not debate academic matters or concern itself with the intricacies of trade and commerce. If the action of the State is related to contractual obligation 501 or obligations arising out of the Court, the Court may not ordinarily examine it unless the action has some public law character attached to it. Broadly speaking, the Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. When the State or an instrumentality of the State ventures into the corporate world and purchases the shares of a comany, it assumes to itself the ordinary role of a shareholder, and dons the robes of a shareholder, with all the rights available to such a shareholder. There is no reason why the State as a shareholder should be expected to state its reasons when it seeks to change the management, by a resolution of the Company, like any other shareholder. '
(29) In view of the law which has developed all these years and as propounded by the Supreme Court it may not be necessary to refer to other judgments of the High Courts. But the fact remains that in all these judgments which we have been referred to, the Judges are speaking in one vein, that of the issuance of writs, and said that the person against whom these writs would lie must be performing the public functions. To us, however, it appears that Article 226 while empowering the High Court for issue of orders or directions to any authority or person does not make any such difference between public functions and private functions.
(30) We need not go into the question as to what is the nature, scope or amplitude of the writs of habeas corpus, mandamus, prohibition, quo warranto and certiorari. They are certainly founded on the English system of jurisprudence. Article 226 also speaks of directions and orders which can be issued to any person or authority, including, in appropriate cases, any Government. We are not unmindful of the fact that trend of various judgments has been that perhaps since Article 226 is based on public law foundations, power under this Article can be exercised when the dispute is in the realm of public law. But that question does not strictly fall for consideration in the present case because of the view which we are taking.
(31) In the present case in hand, as we have seen above, the second respondent is. no doubt, wearing the mask of a public limited company but it is dancing to the tunes of the Central Government. Its affairs are controlled by the Central Government. A member of the Indian Administrative Service is on the helm of the affairs of the second respondent. There is a complete control of the State in the affairs of the second respondent where it has a great deal of majority. The second respondent may not be a Government company in strict sense of the definition as given in the Companies Act, but it is certainly wearing the hat of the Government and is an extended arm of the Ntc, a Government Undertaking. The control of the Central Government through the Ntc on the second respondent is deep and pervasive and it cannot bedenied. That being the position, the question that would arise is should not a company like the second respondent be amenable to the jurisdiction of this Court under Article 226 of the Constitution, may be not for the purpose of issuing a writ, I but for issuing a direction or order, as the case may be. To contend that a writ would not lie when an order is of administrative nature, is a thing of the past. Any administrative } order which affects the rights of a person has to be just, fair and reasonable. It cannot be i arbitrary. Law has progressed much after decision of the House of Lords in Ridge v. Baldwin and others. 1964 A.C. 40 . In A.K. Kraipak and others v. Union of India ' and others : [1970]1SCR457 the Supreme Court observed as under-
'THE aim of the rules of natural justice, is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely (1) no one shall be a judge in his own cause (Nemo debet esse judex propria causa), and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rules of natural justice. The validity of that limitation is not questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those roles should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasijudicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than a decision in a quasi-judicial enquiry. '
(32) In the present case we find no reasons have been stated by the respondents as to why the petitioner was given marching orders. When the petitioner asked for reasons he was not told so. The respondents claim exercise of power under the terms of appointment of the petitioner, but they certainly cannot act in arbitrary fashion. The Supreme Court has struck down even a statutory rule which empowers the employer to terminate the services of an employee by giving notice for a certain period [see D.T.C. v. D.T.C. Mazdoor Congress, : (1991)ILLJ395SC ]. Of course the employer in those cases was a 'State' under Article 12 of the Constitution. Mr. Ganesh raised a pertinent query as to what would happen if in the Board of Directors the majority of the Directors will represent private investors. In that case how could it be said the control would be that of the Government or of an authority being the instrumentality of the State. We do not think we have to answer a question in the abstract form. Court will certainly see who is calling the shots in the affairs of the compny.
(33) The respondents cannot have recourse to the contract of employment in the * present case where, in our opinion, second respondent is controlled by the Ntc, a State agency. We, thereforee, allow the petition though styled as writ petition. Since during the pendency of this writ petition the tenure of employment of the petitioner ended as per his contract, he cannot be put back in the same place. The relief has to be, thereforee, modified. In the circumstances, thereforee, we issue a direction that petitioner be paid all his emoluments as if he was in service and till he was to cease in the employment of the second respondent on 21 February 1992. All these emoluments shall be paid to the petitioner within one month from today. There will be no order as to costs.