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S. Gurbakhsh Singh Petitioners v. Delhi State Industrial Development Corporation & Others S
Expert Summary of the Opinion — Gurbakhsh Singh v. Delhi State Industrial Development Corporation (DSIDC)
Factual and Procedural Background
Gurbakhsh Singh (the petitioner) filed a writ petition under Article 226 of the Constitution praying (1) that the order No. DSIDC/1-583/2203 dated 4 August 1977 issued by the Delhi State Industrial Development Corporation (DSIDC) be quashed; (2) that he be directed to continue in office as Section Officer in the DSIDC without interference; and (3) for a writ of mandamus or other direction requiring the DSIDC not to strike his name off its roll.
The respondents impleaded were: (1) DSIDC, (2) the Delhi Administration, (3) the Union of India through the Accountant General, Central Revenues, and (4) the Lieutenant Governor of Delhi.
Relevant factual chronology (as stated in the opinion): the petitioner was originally employed as an Auditor in the office of the Accountant General, Central Revenues on 16 September 1958. He was later selected for the post of Section Officer in DSIDC, relieved by order dated 4 August 1975 and joined DSIDC on 5 August 1975; being a permanent government servant he retained a lien on his permanent post for two years. In mid-1977 DSIDC indicated that deputationists and re-employees after superannuation would be reverted/terminated. DSIDC made enquiries seeking to return the petitioner to his parent office; the Accountant General initially replied that the petitioner had been sent on deputation and might be absorbed permanently. DSIDC, however, on 4 August 1977 communicated that the petitioner should join his parent department after expiry of his leave. The Accountant General later replied (2 November 1977) that the lien expired on 4 August 1977 and forwarded the petitioner's representation. The petitioner then filed the present writ petition.
The DSIDC raised a preliminary objection in its counter-affidavit that being a company incorporated under the Companies Act, 1956, it was not amenable to writ jurisdiction under Article 226. The High Court heard counsel on that preliminary objection and delivered the judgment addressing it.
Legal Issues Presented
- Whether the DSIDC, being a company incorporated under the Companies Act, is subject to the writ jurisdiction of the High Court under Article 226 of the Constitution of India (i.e., whether a writ petition is maintainable against DSIDC).
- Whether writs in the nature of certiorari and mandamus can be issued against DSIDC in the circumstances pleaded by the petitioner (i.e., whether DSIDC is a "person", an "authority" or the "Government" for the purposes of Article 226, and whether the conditions for certiorari or mandamus are satisfied).
Arguments of the Parties
Petitioner's Arguments
- The DSIDC is effectively a Government organisation because its shares are in the name of the President of India; therefore a writ petition under Article 226 is maintainable against it.
- The petitioner sought quashing of the DSIDC order dated 4 August 1977 and consequential reliefs including continuation in service and protection from being struck off the DSIDC roll.
Respondent (DSIDC) — Preliminary Objection
- The DSIDC is a company incorporated under the Companies Act, 1956, and as such a petition for a writ under Article 226 is not maintainable against it.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Indian Tobacco Corporation v. State of Madras, AIR 1954 Madras 549 | Shows that the words "any person or authority" in Article 226 are wide but mean only those to whom, according to established principles, writs would lie. | Used to limit the meaning of "person" under Article 226: companies are "persons" but must also be such persons as would properly be subject to writs under established principles. |
| T.C. Basappa v. T. Nagappa and another, AIR 1954 S.C 440 | Authority for the proposition that Article 226 powers are not confined strictly to English prerogative writs and can be issued "in the nature of" those writs. | Cited to explain the flexible scope of Article 226 and that orders/directions may go beyond traditional writ forms. |
| P.J. Irani v. State of Madras & Another, AIR 1961 S.C 1731 | Further authority on the scope of Article 226 to issue writs/orders beyond traditional English writs. | Relied on as part of the line of authority showing Article 226's broad scope. |
| Dwarka Nath v. Income-tax Officer, AIR 1966 S.C 81 | Additional authority on breadth of Article 226 jurisdiction (issuance of directions/orders "in the nature of" writs). | Used to support the Court's exposition of Article 226's scope. |
| Province of Bombay v. Khusaldas, AIR 1950 S.C 222 | Defines the nature of certiorari: applicable when a body (a) has legal authority, (b) determines questions affecting subjects' rights, and (c) has a duty to act judicially, but acts in excess. | Cited to set out the essential characteristics of bodies against which certiorari may issue; applied to conclude DSIDC does not meet these characteristics. |
| King v. London County Council, (1931) 2 K.B. 215 | English authority providing formulation of when certiorari issues (referred in Khusaldas). | Used as the foundational formulation of certiorari's scope quoted in the judgment. |
| Bharat Bank v. Employees of Bharat Bank, AIR 1950 S.C 188 | States the object of certiorari: keeping tribunals within the limits of jurisdiction assigned by law. | Cited to explain the objective of certiorari and used to show its traditional scope. |
| Calcutta Discount Co. Ltd. v. Income-tax Officer, AIR 1961 S.C 372 | Holds that administrative orders involving civil consequences must conform to natural justice. | Referred to in connection with the widened scope of certiorari to administrative acts in certain circumstances; Court noted DSIDC is not a body to which that extension applies. |
| State of Orissa v. Binapani Dei & others, AIR 1967 S.C 1269 | Part of authorities expanding certiorari to administrative acts affecting civil rights and requiring natural justice. | Used with other cases to explain the modern scope of certiorari; Court concluded DSIDC's administrative acts do not attract certiorari here. |
| A.K. Kraipak & others v. Union of India & others, AIR 1970 S.C 150 | Authority expanding judicial review and requirement of fair procedure for administrative decisions affecting rights. | Cited among authorities explaining the extension of quasi-judicial obligations to administrative acts. |
| D.F.O. South Kheri v. Ram Sanehi Singh, 1970 (1) S.C.W.R 194 | Also part of the line on extension of natural justice requirements to administrative acts with civil consequences. | Referred to support the point that certiorari can extend to administrative acts in some circumstances; nonetheless DSIDC not found to be such a body. |
| Kalyan Singh v. State of U.P. & others, AIR 1962 S.C 1183 | Mandamus requires a legal right to the performance of a legal duty, and that right must subsist on the date of the petition. | Applied by the Court to state the threshold for issuing mandamus. |
| Wazir Chand v. State of H.P., 1955 (1) S.C.R 408 | Authority that duties enforceable by mandamus may be constitutional in origin. | Cited to illustrate sources of duties enforceable by mandamus. |
| State of Bombay & others v. The Hospital Mazdoor Sabha & others, AIR 1960 S.C 610 | Shows mandamus can enforce duties imposed by statute. | Referred to as an example of statutory duties enforceable by mandamus. |
| Commissioner of Police v. Gordhandas Bhanji, AIR 1952 S.C 16 | Illustrates mandamus may be based on Common Law obligations. | Used to list categories of duties in respect of which mandamus may issue. |
| State of Mysore & another v. K.N. Chandrasekhara, AIR 1965 S.C 532 | Illustrates mandamus can be founded on Common Law principles. | Included among authorities describing when mandamus is available. |
| K.N. Guruswamy v. The State of Mysore & others, AIR 1954 S.C 592 | Shows mandamus may lie to enforce duties under rules/orders having force of law. | Cited to explain the categories of duties enforceable by mandamus. |
| State of Bihar v. Union of India (Civil Appeals Nos. 512-513 of 1969) | Held Hindustan Steel Ltd. to be an independent company distinct as an entity; left open whether it was subject to Articles 226/227. | Referred to for the proposition that companies incorporated under Companies Act have independent existence; question of writ jurisdiction left open in that case. |
| Praga Tools Corporation v. C.V. Imanual & others, AIR 1969 S.C 1306 | Held that a company incorporated under the Companies Act is a separate legal entity even if government holds majority shares; mandamus will not lie to enforce private contractual obligations or where there is no statutory/public duty on the company. | Relied on by the Court to conclude that mandamus cannot be issued against a non-statutory company like DSIDC in respect of private/contractual matters absent a statutory/public duty. |
| Dr. S.L. Aggarwal v. The General Manager, Hindustan Steel Ltd., AIR 1970 S.C 1150 | Held that a government-financed company is not necessarily a department of the Government and its employees are not holders of civil posts under the State for Article 311 protection. | Used to reinforce that a company under Companies Act, even if government-controlled, is distinct from the Government for constitutional protections and writ jurisdiction purposes. |
| National Seeds Corporation Employees Union & another v. National Seeds Corporation, AIR 1972 Delhi 292 | Held that a company not created by statute and without statutory obligations cannot be compelled by mandamus to comply with Section 9A Industrial Disputes Act; remedy may instead be an industrial dispute. | Applied to show that a private company incorporated under the Companies Act is not amenable to mandamus in respect of alleged non-compliance with Section 9A. |
| Industrial Finance Corporation of India v. Delhi Administration & others, I.L.R 1973 (2) Delhi 29 | Explains that whether a body is a "State" under Article 12 is relevant to Part III rights but not determinative of High Court jurisdiction under Article 226. | Relied upon to stress that Article 12 "State" analysis is distinct from Article 226 jurisdictional questions. |
| Kartick Chandra v. W.B.S.I. Corporation, AIR 1967 Cal. 231 | Held that even if a body is not a "State" under Article 12, a writ under Article 226 may lie on non-constitutional grounds or for contravention of provisions outside Part III. | Used to emphasize that being a "State" under Article 12 is not the sole test for Article 226 writ jurisdiction. |
| Dr. Y.V. Gupta v. Union of India & others, I.L.R 1975 (2) Delhi 452 (Full Bench) | Full Bench classification: statutory authorities, and separately registered societies/companies; societies/companies are not created by statute and generally are not "authorities" for Article 226 unless discharging public functions or acting contrary to statute. | Applied directly: DSIDC was incorporated under Companies Act and not created by statute; since it did not discharge public functions nor act contrary to statute in the present case, it could not be regarded as an "authority" under Article 226. |
| Executive Committee of Vaish Degree College, Shamli and others, AIR 1976 S.C 888 | Authority concerning writ jurisdiction in relation to educational/private institutions (cited in later High Court Full Bench decisions). | Referred through subsequent Andhra Pradesh decision (Shakuntala Sahawala) to support limitations on writs against private bodies not governed by statutory rules. |
| Arya Vidya Sabha, Kashi & another v. Krishan Kumar Srivastava, AIR 1976 S.C 1073 | Also part of Supreme Court authority concerning writ jurisdiction regarding private/public educational institutions. | Referred to via Shakuntala Sahawala to show limits on writ relief against private institutions not governed by statutory rules. |
| Shakuntala Sahawala v. The Director of Public Instruction, AIR 1977 Andhra Pradesh 381 | Full Bench held that even if an educational institution is a public body, a writ cannot issue so long as the private institution is not governed by statutory rules; High Court's writ jurisdiction in such matters is limited. | Used to illustrate that societies/companies registered under non-statutory enactments occupy a similar position to companies and that writs cannot be issued against them for breach of administrative/executive instructions where no statutory rule is involved. |
| Heavy Engineering Mazdoor Union v. State of Bihar, AIR 1970 S.C 82 | Supports the view that companies under the Companies Act remain separate legal entities and are not automatically agents or departments of the Government. | Cited alongside Praga Tools and Dr. Aggarwal to conclude DSIDC is not "Government" for Article 226 purposes. |
| Arun Narayan v. The State of Karnataka, AIR 1976 Karnataka 175 | Division Bench considered admission directions to a private medical college and observed that relief may effectively be against the State rather than the private body. | Cited by the Court but noted as not directly helpful to the DSIDC point; distinguished as not specifically dealing with the present issue. |
Court's Reasoning and Analysis
The Court focused on the preliminary objection that DSIDC, being a company incorporated under the Companies Act, was not amenable to writ jurisdiction under Article 226. The reasoning proceeded stepwise:
- The Court examined the text of Article 226 (pre- and post-42nd Amendment) and noted the Article authorises High Courts to issue directions, orders or writs to "any person or authority including in appropriate cases any Government" within territorial jurisdiction.
- The Court analysed the term "person." While Section 3(42) of the General Clauses Act defines "person" to include a company, the Court emphasised (citing Indian Tobacco Corporation) that "person" in Article 226 must be understood as meaning "a person or authority to whom, according to well established principles, writs like those mentioned would lie." The Court therefore rejected a plain textual expansion divorced from established principles of writ jurisdiction.
-
The Court then considered the writs sought by the petitioner:
- Certiorari — The Court set out the classical tests (Province of Bombay v. Khusaldas and King v. London County Council) that certiorari applies to bodies having legal authority to determine rights and a duty to act judicially. The Court found DSIDC was not a judicial or quasi-judicial body, had no legal authority to determine subjects' rights and no duty to act judicially; hence certiorari could not issue against it. The Court acknowledged the modern expansion of certiorari to some administrative acts (citing cases such as Calcutta Discount Co., Binapani Dei, A.K. Kraipak), but concluded that such expansion applies only when the body has legal authority over rights and a quasi-judicial duty — which DSIDC did not possess here.
- Mandamus — The Court identified the basic requirement for mandamus (Kalyan Singh) that the applicant must demonstrate a legal right to the performance of a legal duty, subsisting on the date of petition. The Court reviewed authorities showing mandamus can enforce duties arising under the Constitution, statutes, common law or rules having the force of law. It then examined precedent on grants of mandamus against companies and non-statutory bodies (Praga Tools, Dr. S.L. Aggarwal, National Seeds Corporation, etc.) which collectively hold that a company incorporated under the Companies Act, even if government-controlled, remains a distinct legal entity and does not attract mandamus unless a statutory or public duty is imposed on it or it is a statutory corporation or body charged with public responsibilities.
- The Court next analysed whether DSIDC constituted an "authority" for Article 226 purposes. It relied substantially on the Full Bench decision in Dr. Y.V. Gupta which drew a three-fold classification and held that companies and societies are generally not "authorities" unless they are statutory bodies or are discharging public functions or acting contrary to statute. The Court found DSIDC was incorporated under the Companies Act (not created by statute to discharge statutory functions), did not discharge public functions in the sense required, and no plea was made that DSIDC acted contrary to any statute or statutory rule. The impugned action — treating the petitioner as on deputation and sending him back — affected contractual rights (if at all) and not legal rights requiring judicial review by certiorari or mandamus.
- Finally, the Court considered whether DSIDC could be treated as "Government" for Article 226 merely because the President held its shares. The Court relied on Praga Tools, Heavy Engineering Mazdoor Union and Dr. S.L. Aggarwal to conclude that ownership of shares by the Government does not convert a company into a Government department or an agent of the Government for the purposes of Article 226.
- On that basis — that DSIDC is not a proper "person" for writ purposes in the circumstances, is not an "authority" under Article 226, and is not "Government" — the Court held the petition could not be maintained against DSIDC.
Holding and Implications
Holding: The Court upheld the preliminary objection and dismissed the writ petition. The dismissal was ordered without costs. (As stated in the opinion: "We uphold the preliminary objection and accordingly dismiss the Writ Petition, but in the circumstances without costs. Petition dismissed.")
Implications:
- Direct effect on the parties: The petition seeking quashing of DSIDC's order dated 4 August 1977 and consequential reliefs was dismissed; the DSIDC is not treated by the Court, on the facts pleaded, as amenable to writ jurisdiction under Article 226 for the challenged action.
- Legal consequence as articulated in the opinion: A company incorporated under the Companies Act, which is not a statutory body discharging public or statutory functions and which has not been shown to have acted contrary to statute, is generally not an "authority" or "Government" such that writs of certiorari or mandamus can be issued against it under Article 226 in respect of private/contractual matters. Ownership of shares by the President (or the Government) does not by itself make a company part of the Government for Article 226 purposes.
- No new broad legal principle was announced by the Court beyond its application of existing precedents and Full Bench authority; the Court's holding rests on the application of established case law to the facts before it.
This summary is confined to and derived exclusively from the content of the provided opinion. No information not contained in the opinion has been introduced.
T.V.R Tatachari, C.J:— This Writ Petition has been filed by Gurbakhsh Singh under Article 226 of the Constitution of India praying (1) for the issuance of an appropriate writ quashing the order, No. DSIDC/1-583/2203, dated 4th August, 1977, issued by the Delhi State Industrial Development Corporation (hereinafter referred to as the DSIDC) as being against the rules applicable to the petitioner. (2) for directing his continuation in office as Section Officer in the DSIDC without any interference and (3) for a writ of mandamus or other appropriate order or direction requiring the DSIDC not to strike off the petitioner's name from its roll.
2. The petitioner impleaded as respondents to the writ petition (1) The Delhi State Industrial Development Corporation (DSIDC). (2) The Delhi Administration, (3) the Union of India through the Accountant General, Central Revenues and (4) the Lieutenant Governor of Delhi.
3. A preliminary objection has been raised in the counter-affidavit filed on behalf of the DSIDC that the DSIDC is a Company incorporated under the Companies Act, 1956, and, as such, no petition for a writ is maintainable against it under Article 226 of the Constitution. We, therefore, heard the learned counsel for both the parties on the preliminary objection, and we proceed to give our judgment regarding the same.
4. For the purpose of deciding the preliminary objection, it is sufficient to state only a few facts which led up to the filing of the Writ Petition.
5. According to the petitioner, he was originally employed on 16th September, 1958, as an Auditor in the office of the Accountant General. Central Revenues, New Delhi, which is a department of the Government of India. He was later selected for the post of Section Officer in the DSIDC in the scale of Rs. 650 — 960. He was relieved by an office order No. 335, dated 4th August, 1975 (A.N), and he joined the service of the DSIDC on 5th August, 1975. However, he, being a permanent Government servant, was allowed to retain a lien on his permanent post for a period of 2 years in accordance with the rules applicable to a permanent Government servant in the office of the Accountant General, Central Revenues.
6. In June, 1977, it was given out that all the persons who were on deputation in the DSIDC will be reverted to their parent offices/departments, and the services of all the persons who were re-employed after the age of superannuation will be terminated. According to the petitioner, he did not fall in any of the said categories, as he was not on deputation, but was a directly recruited employee after selection on the base of interview. The DSIDC, by a letter, dated 18th June 1977, made an enquiry regarding sending the petitioner back to the office of the Accountant General, Central Revenues. But the Accountant General, by his letter, No. Admn. 1/11-3/77-78/940, dated 22nd July, 1977, intimated the DSIDC that the petitioner was sent on deputation to the DSIDC, that he was selected for post of Section Officer in response to his application to the DSIDC, and that he should be considered for permanent absorption in the DSIDC. However, on 4th August, 1977, when the petitioner was on earned leave DSIDC sent a communication to the petitioner as well as to the Accountant General that he should join his parent department after the expiry of the leave. The Accountant General sent a reply to the said communication, letter No. Admn. 1/11-3/77-78/1652, dated 2nd November, 1977, stating that the rules did not permit the reversion of the petitioner, as the period of two years for which lien could be kept had already expired on 4th August, 1977. The accountant General also forwarded the petitioner's representation seeking his permanent absorption in the DSIDC. The petitioner then filed the present writ petition seeking for the quashing of the order of the DSIDC, dated 4th August, 1977, and for certain consequential reliefs which we have mentioned earlier.
7. As already stated, the preliminary objection is that the DSIDC, being a company incorporated under the Companies Act, no writ petition is maintainable against it under Article 226 of the Constitution. In reply to the objection, the petitioner stated that the DSIDC is totally a Government organisation as its shares are in the name of the President of India, and that the writ petition is, therefore, maintainable against it under Article 226 of the Constitution of India.
8. Thus, the point for determination is whether the DSIDC, being a Company incorporated under the Companies Act, is subject to the jurisdiction of the High Court under Article 226 of the Constitution of India, and the Writ Petition is maintainable.
9. Article 226 (1), before it was amended by the Constitution (42nd Amendment) Act, 1975, provided that:
“every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, issue to any person or authority, including in appropriate cases any Government, within those territories directions, orders or writs including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose”.
10. According to the above provisions, directions, orders or writs can be issued thereunder to (i) any person, (ii) any authority, and (iii) any Government in the territories in relation to which the High Court concerned exercises jurisdiction. By the Constitution (42nd Amendment) Act, the old Article 226 has been substituted by a new one. However, Article 226 (1), even as amended, continues to provide that:
“every High Court shall have power throughout the territories in relation to which it exercises jurisdiction, issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them” for the purposes set out in the Article.
11. We shall first consider the scope of the words “any person”. “Person” includes any company or association or body of individuals, whether incorporated or not (vide Section 3 (42) General Clauses Act, 1897). However, although the words “any person or authority including any Government” are quite wide in their scope, it has been held that these words mean only “to any person or authority to whom, according to well established principles writs like those mentioned in the Article would lie”. (Vide the Indian Tobacco Corporation v. State of Madras, AIR 1954 Madras 549, 551, 552.) (1). As regards the “directions” and “orders” mentioned in the Article, it has been pointed out by Mr. H.M Seervai in his treatise “Constitutional Law of India” (second edition) at page 815, while dealing with the unamended Article, as under:—
“Orders, directions or writs are to be issued “to any person” and “for any purpose”. Once the meaning of these words is ascertained with reference to writs, a different meaning cannot be given to them with reference to “Orders” or “directions”. In England, the writs of mandamus, certiorari and prohibition were replaced by “Orders” of the same name in 1938; the writ of quo warranto was replaced first by information in the nature of quo warranto, and later by an injunction — that is an order of the Court. In India, the Writs of habeas corpus and mandamus were replaced by “directions” in the nature of mandamus by Section 491, Cr.P.C, and Section 45 Specific Relief Act, 1877 respectively. The words “Orders” and “directions” were used to describe what at one time were called writs, and since the terminology had been in use in England and in India, all the three words have been used in Article 226 to describe well-recognised English writs”.
12. However, it has been held by the Supreme Court that the powers of the High Court under Article 226, like those of the Supreme Court under Article 32, are not limited to the prerogative writs, that Article 226 speaks not of the English Writs but of writs “in the nature of those writs”, that High Courts, in issuing directions, orders and writs under Article 226 can travel beyond the contents of the writs which are normally issued as writs of habeas corpus, mandamus, prohibition, quo warranto and certiorari, and that they can issue orders or directions or writs in all appropriate cases and in appropriate manner, so long as they keep to the broad and fundamental principles that regulate the exercise of jurisdiction in the matter of granting such writs in English Law (vide T.C Basappa v. T. Nagappa and another, AIR 1954 S.C 440, 443 (2); P.J Irani v. State Of Madras & Another, AIR 1961 S.C 1731, 1738 (3); and Dwarka Nath v. income-tax Officer, AIR 1966 S.C 81, 85) (4).
13. Thus, if the jurisdiction under Article 226 as unamended or amended, is sought to be invoked against one on the basis that he or it is a “person” within the meaning of the article, it has to be seen whether he or it is a “person” to whom or to which, directions or orders or writs are issued according to the broad and fundamental principles that regulate the exercise of jurisdiction in the matter of granting such writs in English Law.
14. In the present case, the petitioner has asked for directions or orders or writs in the nature of certiorari (prayer 1) and mandamus (prayers 2 and 3) against the DSIDC. We have, therefore, to notice the broad and fundamental principles that regulate the issuance of the said writs and the person to whom or to which they are issued. We shall consider first the writ of certiorari. In Province of Bombay v. Khusaldas, AIR 1950 S.C 222, 225 (5), the Supreme Court stated the nature of certiorari as under, quoting from the decision in the King v. London County Council, (1931) 2 K.B 215, 243 (6):—
“‘Whenever any body of persons (a) having legal authority, (b) to determine questions affecting rights of subjects and (c) having the duty to act judicially, (d) act in excess of their legal authority, certiorari may issue to remove the proceedings from such body to the High Court and quash a decision that goes beyond jurisdiction”.
In Bharat Bank v. Employees of Bharat Bank, AIR 1950 S.C 188, 211 (7), the Supreme Court pointed out the object of a writ of certiorari as under:—
“The object of this writ is to keep the exercise of powers by judicial and quasi-judicial tribunals within the limits of the jurisdiction assigned them by law and to restrain them from acting in excess of their authority”.
The scope of certiorari has since been widened, and it has been held that even an administrative order must be made in conformity with the rules of natural justice if it involves civil consequences (vide Calcutta Discount Co. Ltd. v. Income-tax Officer, AIR 1961 S.C 372, 380 (8); State of Orissa v. Binapani Dei & others, AIR 1967 S.C 1269 (9); A.K Kraipak & others v. Union of India & others AIR 1970 S.C 150, 156 (10); and D.F.O South Kheri v. Ram Sanehi Singh, (1970 (1) S.C.W.R 194, 198) (11).
15. In the present case, the DSIDC, a Company incorporated under the Companies Act, is not a judicial or quasi judicial body. It has no legal authority to determine questions affecting rights of subjects. There is no duty cast upon it to act judicially. So, a direction or order or writ in the nature of certiorari cannot be issued against it quashing its order. Even as regards administrative orders of the DSIDC, it is true that as pointed out by Mr. Durga Das Basu in his book “Constitutional Law of India” at pages 262, 263, “the distinction between quasi-judicial and administrative orders, for the purpose of certiorari, has been largely obviated in India by the extension of quasi-judicial obligation, by the Supreme Court, to newer categories of administrative acts”, but still, no certiorari can be issued against the administrative orders of DSIDC, because the extension of the quasi-judicial obligation of acting according to principles of natural justice in cases of orders involving civil consequences is only to the administrative orders of a body which has legal authority to determine questions affecting rights of subjects and also has the duty to act judicially, and the DSIDC is not such a body.
16. As regards mandamus, it is well settled that the applicant must show that he has a legal right to the performance of a legal duty, as distinguished from a discretion, by the party against whom the mandamus is sought, and such right must be subsisting on the date of the petition (vide Kalyan Singh v. State of U.P & others, AIR 1962 S.C 1183, 1188) (12). The duty that may be enjoined by mandamus may be one imposed by the Constitution, (Wazir Chand v. State of H.P 1955 (1) S.C.R 408, 414) (13), a statute (The State of Bombay & others v. The Hospital Mazdoor Sabha & others, AIR 1960 S.C 610) (14), Common Law (Commissioner of Police v. Gordhandas Bhanji, AIR 1952 S.C 16, 21 (15); State of Mysore & another v. K.N Chandrasekhara AIR 1965 S.C 532, 537) (16) or by rules or orders having the force of law (K.N Guruswamy v. The State of Mysore & others, AIR 1954 S.C 592) (17).
17. The question as to whether a mandamus can be granted against a Company has been considered in some decisions.
18. In State of Bihar v. Union of India, Civil Appeals Nos. 512-513 of 1969, decided on 19th September, 1969 (18), the Hindustan Steel Limited, a Company incorporated under the Companies Act, was held by the Supreme Court to be an independent company and thus a distinct entity. But, the question whether it was subject to the jurisdiction of the High Court under Articles 226 and 227 was left open.
19. In Praga Tools Corporation v. C.V Imanual & others. AIR 1969 S.C 1306 (19), mandamus was sought restraining the Corporation, a Company incorporated under the Indian Companies Act, 1913, from implementing or enforcing an agreement. The Supreme Court held at pages 1307, 1309 and 1310 as follows:—
(at page 1307) “.... at the material time, however, the Union Government and the Government of Andhra Pradesh between them held 56 per cent and 32 per cent of its shares respectively and the balance of 12 per cent shares were held by private individuals. Being the largest shareholder, the Union Government had the power to nominate the company's directors. Even so, being registered under the Companies Act and governed by the provisions of that Act, the company is a separate legal entity and cannot be set to be either a Government Corporation or under the authority of the Union Government......”
(at page 1309) “But it is well understood that a mandamus lies to secure the performance of a public or statutory duty in the performance of which the one who applies for it has a sufficient legal interest. Thus, an application for mandamus will not lie for an order of reinstatement to an office which is essentially of a private character nor can such an application be maintained to secure performance of obligations owned by a company towards its workmen or to resolve any private dispute.....”
“Therefore, the condition precedent for the issue of mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus is, in form, a command directed to a person, corporation, or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body, (at page 1310) A mandamus can issue, for instance, to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purposes of fulfilling public responsibilities (Of. Halsbury s Laws of England (3rd Ed.), Vol II, page 52 onwards). The Company (i.e, the Corporation in that case) being a non-statutory body and one incorporated under the Companies Act, there was neither a statutory nor a public duty imposed on it by a statute in respect of which enforcement could be sought by means of a mandamus, nor was there in its workmen any corresponding legal right for enforcement of any such statutory or public duty”.
20. In Dr. S.L Aggarwal v. The General Manager, Hindustan Steel Ltd., AIR 1970 S.C 1150, 1153 (20), the services of Dr. S.L Aggarwal were terminated by the General Manager of the Hindustan Steel Ltd. which is a company incorporated under the Companies Act. In his writ petition filed under Article 226, Dr. Aggarwal sought the protection given under Article 311 of the Constitution, on the ground that the company was entirely financed by the Government and its management was directly the responsibility of the President, and hence the post held by Dr. Aggarwal was virtually under the Government of India. The Supreme Court, however, held, following the principles laid down in the case of Praga Tools Corporation, that the Hindustan Steel Ltd., was not a department of the Government nor were the servants of it holding posts under the State, that it had its independent existence and by law relating to corporations, it was distinct even from its members, and that in the circumstances, Dr. Aggarwal, who was an employee of Hindustan Steel Ltd., did not answer the description of a holder of “a civil post under the Union” as stated in Article 311, and was not, therefore, entitled to the protection of that Article.
21. In National Seeds Corporation Employees Union and another v. National Seeds Corporation, AIR 1972 Delhi 292, 295 (21), the employees sought a mandamus directing the corporation to restore the enhanced house allowance which the employees were getting under a resolution passed by the Board of Directors of the Corporation and which has been revoked by a subsequent office order/without complying with the provisions of Section 9A of the Industrial Disputes Act. A Division Bench of this Court, Hardayal Hardy, C.J, and Prakash Narain, J. held that since the corporation was a company not either created by a statute nor any statutory obligation had been cast upon if by its Constitution, it could not be said that the alleged non-compliance with Section 9A of the Industrial Disputes Act by the Corporation entitled the petitioners to claim that a mandamus be issued to the respondent-company to comply with the said provisions, as the statute merely laid down the law and the procedure to be followed before effecting any change in the conditions of service of workmen, and there has been no statutory obligation on a private employer, like a company incorporated under the Companies Act, to follow Section 9A in the manner in which there would be a statutory obligation on a company to comply with the provisions of the statute which brings it into existence, although the alleged violation of section 9A might entitle the petitioners to raise an industrial dispute, with which, however, the Division Bench was not concerned with.
22. It is clear from the above decisions that in the case of the DSIDC, though it is a “person”, a mandamus cannot be issued as it is only a company incorporated under the Companies Act and a non-statutory body.
23. The next question for consideration is as to whether it is an “authority” within the meaning of Article 226. Before referring to a decision which dealt with this aspect, it has to be noted that the word “authority” occurs also in Article 12 of the Constitution which defines “State”. But, as pointed out by a Full Bench of this Court, of which one of us was a member, in Industrial Finance Corporation of India v. Delhi Administration & others, I.L.R 1973 (2) Delhi 29, 39 (23), the question of being a “State” within the meaning of Article 12 is material for the purposes of application of the provisions in Part III of the Constitution, and is not material in the matter of exercise of jurisdiction by a High Court under Article 226 of the Constitution. In that case, the question under consideration was whether the Industrial Finance Corporation of India was a “State” within the meaning of Article 12. In dealing with that question, the Full Bench pointed out at page 39 as follows:—
“In dealing with the above question, it has to be borne in mind that the question of being a “State” within the meaning of Article 12 is material only for the purpose of application of the provisions contained in the Article in Part III in which the words “the State” occur. The said question is not material in the matter of exercise of jurisdiction by a High Court under Article 226 of the Constitution. The issuance of a writ or order or direction under Article 226 depends upon the existence of the well established conditions for such issuance and not upon the question whether the definition of “State” in Article 12 is satisfied in the case. Thus, as held by the High Court of Calcutta in Kartick Chandra v. W.B.S.I Corporation, AIR 1967 Cal. 231, 234 (24), “even though a body of persons may not constitute a “State” within the definition of Article 12, a writ under Article 226 may sometimes lie against it on non-constitutional grounds or on ground of contravention of provisions of the Constitution outside Part III”. We have referred to this aspect only to emphasise that the question of being a “State” within the meaning of Article 12 is not to be mixed up with the question of issuance of a writ, order or direction under Article 226”.
24. It has further to be noted that on a consideration of the decisions of the Supreme Court, the Full Bench held at page 49, that “a body or authority cannot, by the mere fact that it has been constituted or set up by a statute, be regarded as an “authority” and hence a “State” within the meaning of Article 12”, that “to be under an authority, it should have functions and powers such as are mentioned or indicated in the aforesaid observations of the Supreme Court”, and that “broadly stated, the said observations indicate that a body or authority constituted or set up by or under the Constitution or a Statute within, the territory of India or under the control of the Government of India would be an “authority” and hence “State” within the meaning of Article 12 if —
(1) it is an agent or instrument of the Government; or
(2) it has been set up for the purpose of administering laws enacted by the Parliament or by the State or has been vested with the duty to make decisions in order to implement those laws; or
(3) it has been vested with powers to carry out governmental or quasi-governmental functions, or powers to give directions which are to be obeyed and command obedience of the same; or
(4) it is invested with power to make rules or regulations and to administer or enforce them to the detriment of citizens and others”.
25. In the present case, the DSIDC does not satisfy the requirements (2) to (4). It does not satisfy the first requirement also, as the mere fact that the President holds all the shares of the Company as alleged by the petitioner does not make the company an agent or instrument or a department of the Government as held by the Supreme Court in the case of Praga Tools Corporation (Supra)? Heavy Engineering Mazdoor Union v. State of Bihar, AIR 1970 S.C 82 (19) and Dr. S.L Aggarwal (Supra). We shall refer to the said decisions again in dealing with the word “Government” in Article 226. Thus, the DSIDC is not a “State” within the meaning of Article 12. But, as stated earlier, its not being a “State” is not material in the matter of exercise of jurisdiction under Article 226.
26. Coming now to the decision which dealt with the meaning of the word “authority” in Article 226, it is the decision of a Full Bench of this Court in Dr. Y.V Gupta v. Union of India & others, I.L.R 1975 (2) Delhi 452 (25). In that case, the Full Bench considered in paragraph 34 whether the ICAR (Indian Council of Agricultural Research) was an “authority” within the meaning of Article 226 and Article 12. The Full Bench held that the ICAR was not an “authority” for the purposes of Article 226, as it was only a voluntary association (see para 29) registered under the Registration of Societies Act, 1860 (see para 11 & 13), and it was not a statutory body created by a Statute, nor was it discharging public functions, nor was it shown in that case to have acted contrary to some statute or statutory rule (see para 29). In that context, it was explained in paragraph 34 as follows:—
“What is an “authority” either for the purposes of Article 226 or of Article 127? A three-fold classification may be made of bodies or persons contending to be eligible to be regarded is “authorities”. On the one hand are statutory authorities. They are created by a statute and derive their power from the statute. They satisfy the usual condition precedent to be considered as “authorities” within the meaning of Articles 226 and 12. On the other hand, are registered societies and companies. These are voluntary creations of associations of private persons. Their power is derived from themselves. The statutes under which they are registered or incorporated only help them to attain a legal personality. An association before it becomes a legal person is only a metaphor. For instance, we speak of a jury, a bench of judges, a public meeting or even of the community itself as being a person instead of being merely a group of persons. We personify a group of individuals thereby. But legal personality is not reached until the law recognises over and above the associated individuals a legal person which represents them but is not identical with them. The object of the Societies Registration Act and the Companies Act is not to create societies and companies but only to confer legal personality on existing societies and existing companies. As the companies and the societies are not created by statutes, the powers exercised by them are not the result of a statutory creation but only a result of voluntary association and functioning under statutory regulation. The societies and companies are not, therefore “authorities”.
27. In the present case, the DSIDC was not created by a statute, but was only incorporated under the Companies Act. As per the observations of the Full Bench in para 29, the DSIDC can still be regarded as an “authority” for the purpose of exercise of jurisdiction under Article 226, if it is discharging public functions and acts contrary to a statute rule. There is no such plea in the present case. The act complained of was that the DSIDC treated the petitioner as being on deputation with it and, on that basis, sent him back to his parent department. Such an action affects, if at all, a contractual right and not a legal right of the petitioner. Nor does it involve any duty on the part of the DSIDC to act judicially. In the circumstances, it has to be held that the DSIDC cannot be regarded as an, “authority” for the purposes of the exercise of jurisdiction under Article 226.
28. We next come to the word “Government” in Article 226. The question is whether a Company like the DSIDC which was incorporated under the Companies Act is “Government” within the meaning of Article 226. This has been considered by the Supreme Court in three cases. In the cases of Praga Tools Corporation (Supra), Heavy Engineering Mazdoor Union v. State of Bihar (Supra), and Dr. S.L Aggarwal (Supra), the Supreme Court held that a company incorporated under the Companies Act, even if all the shares or a majority of the shares in it are held by the Government, has an existence independent of the Government and is an entity distinct from the Government, and that it would not be an agent, or a department of the Government by the law relating to it. Thus, the DSIDC is not “Government” within the meaning of Article 226.
29. Our attention has been drawn to the decision in Shakuntala Sahawala v. The Director of Public Instruction, AIR 1977 Andhra Pradesh, 381 (26). In that case, a Full Bench of the High Court of Andhra Pradesh, dealing with a society registered under the Hyderabad Non-Trading Societies Registration Act, and following the decisions of the Supreme Court in Executive Committee of Vaish Degree College, Shamli and others AIR 1976 S.C 888 (27) and Arya Vidya Sabha, Kashi and another v. Krishan Kumar Srivastava, and another, AIR 1976 S.C 1073 (28), held at page 385 that:—
‘.... even if the educational institution is considered to be a public body, no writ or direction can be issued so long as the private institution is not governed by statutory rules and there is no question of any enforcement of statutory rules. However, as against a Government servant, who is functioning under administrative orders or administrative instructions, a writ can issue if there is violation of principles of natural justice or if the administrative instructions, which are binding on him have not been followed by him. The High Court, in exercise of its jurisdiction under Article 226 of the Constitution, can always direct a public servant to abide by the rule of law and the administrative instructions binding on him are part of the rule of law. It is only to the limited extent that the High Court can exercise its writ jurisdiction under Article 226 of the Constitution in matters of this kind. We are constrained to hold, in view of the decisions of the Supreme Court referred to above that even on the basis of the distinction between a statutory body and a public body that a private institution, like the 2nd respondent, registered under the Co-operative Societies Act or the Companies Act or Non-Trading Societies Registration Act, is a public body, it is not open to the High Court to issue a writ or direction against such a body for breach of any administrative or executive.
The above decision and the decisions of the Supreme Court mentioned therein dealt with a society registered under the Registration of Societies Act, and held that such societies are in the same position as companies incorporated under the Companies Act.
30. Another decision cited by Mr. Sistani was Arun Narayan v. The State of Karnataka, AIR 1976 Karnataka 175 (29). In that case, a Division Bench of the High Court of Karnataka dealt with the question of admission of a student to a private medical college. The Division Bench held at page 178 that though the College (respondent No. 2) “is a private institution which does not come within the definition of ‘State’ in Article 12 of the Constitution and is also not a public authority, since it (respondent No. 2) feels obliged to obey the direction of the Government to admit certain number of ‘Karnataka’ students to its college, the petitioner can ask for a writ restraining respondent No. 1, the State of Karnataka, from enforcing any direction given by it (respondent No. 1). Hence, it would, in our opinion, be too technical to dismiss this petition solely on the ground that respondent No. 2 is a private institution. Though the petitioner has asked for a writ, direction or order as against respondent No. 2 what he has, in substance, sought for is a writ to respondent No. 1, the State of Karnataka, not to enforce its direction to admit certain number of ‘Karnataka’ students to respondent No. 2 College”.
The decision does not specifically deal with the point under our consideration and is not therefore of much assistance to the counsel.
31. For the foregoing reasons, we uphold the preliminary objection and accordingly dismiss the Writ Petition, but in the circumstances without costs.
Petition dismissed.
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