Shanmugam, J.:— Both these matters raise a common question viz. whether the Cochin Stock Exchange Limited, a Company registered under the Companies Act is amenable to writ jurisdiction?

2. The facts of each case can be briefly stated as follows

3. W.A No. 925/1994: The appellant and the 4th respondent are members of Cochin Stock Exchange. They had dealings in the purchase and sales of shares during the period 1988 to 1990. Based on the claim of the 4th respondent, the 1st respondent viz. the Cochin Stock Exchange issued a notice informing him that an arbitration complaint had been received against him. The appellant raised a preliminary objection to the claim stating that the claim was time barred under Cl. 303 of the Bye-laws of the 1st respondent. The appellant later received information to the effect that the 1st respondent Management had condoned the delay in filling the arbitration complaint. Before the commencement of the arbitration proceedings the appellant approached this Court seeking for the issue of a writ of certiorari to quash the notices and the complaints contained in Exts. PI, P2, P4 and P5. The learned Judge dismissed the O.P holding that the writ petition is not maintainable and that the claim is purely based on contractual obligation, besides holding that the petitioner has got alternative effective remedies. The appeal is filed against this order.

4. O.P No. 6957/1995: The petitioner who joined the 1st respondent Cochin Stock Exchange Limited as a Trainee in the Administrative Department, was working as General Manager (Finance, Auditing and Listing). Disciplinary proceedings were initiated against the petitioner on the ground of dereliction, collusion and negligence in the discharge of duties and functions and failure to maintain surveillance, in April, 1995 culminating in the termination of services of the petitioner, which was communicated on 29-4-1995. The petitioner has challenged these proceedings by praying for the issue of a writ of certiorari by calling for the records leading up to the proceedings of termination of service of the petitioner and to quash them same and for consequential reliefs.

5. When the matter was taken up the counsel agreed to advance the arguments only on the maintainability of the writ petition. Therefore, the only question that arises for consideration is whether the Cochin Stock Exchange Limited is an authority under Art. 12 of the Constitution of India and whether it is amenable to writ jurisdiction?

6. The main points raised on behalf of the petitioners are: (1) Cochin Stock Exchange Limited registered under the Companies Act, the various articles of Memorandum of Association of the Company would show that the Company is under the Control of the Central Government. (2) The Cochin Stock Exchange discharges public duty and therefore, would come under the definition of ‘other authority’. (3) The Securities and Exchange Board of India Act, (992 and the Securities Contracts (Regulation) Act of 1956 and the rules made thereunder have a deep and pervasive control over the Cochin Stock Exchange and therefore, it is an authority under Art. 12 of the Constitution of India.

7. In support of these points the learned counsel took us through the various provisions of the Memorandum of Association. According to them, Art. 2 of the Memorandum of Association dealing with membership is subject to provisions of Securities Contracts (Regulation) Act, 1956 and rules framed thereunder. Art. 6 dealing with eligibility for membership provides for the admission of Corporations owned by the Government. Art. 8 states that a person is eligible to be elected as a member only if he satisfied the requirement of Securities Contracts (Regulation) Act, 1956 and rules framed thereunder. Art. 105 dealing with Council of Management provides that it must be constituted in accordance with the provisions of the Act. The sub-clause to Art. 106 provides for the Central Government to nominate one or more persons not exceeding three as members of Council of Management. Art. 107 ensures that the Government members are eligible to continue without election. Arts. 126, 142, 143, 144 and 149 say that the functions under the respective articles are subject to the approval and provisions of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as the ‘the Act’). By taking through these articles, the submission that the management and the power of the Cochin Stock Exchange are virtually under the control of the Central Government.

8. Coming to the control under the Act, it is argued that there is a deep and pervasive control over the activities of the Stock Exchanges. S. 4 dealing with recognition, S. 5 dealing with withdrawal of recognition, S. 7 dealing with annual reports and S. 7A dealing with power of stock exchanges to make rules restricting voting rights, S. 8 dealing with the power of Central Government to direct rules to be made or to make rules, S. 9 dealing with the power of stock exchanges to make bye-laws, S. 11 dealing with the power of the Central Government to supersede governing body of a recognised stock exchange and S. 12 dealing with the power to suspend the business of stock exchanges, would clearly establish that the Central Government has complete and total control over the functioning of the stock exchanges, so as to make them as an agency of the Central Government and therefore, the stock exchange is an authority within the definition of Art. 12 of the Constitution of India. It is also submitted that in view of the existence of the element of monopoly in dealing with the securities, the stock exchange is performing public function and the public interest is one of the factors that should be taken note of for deciding whether there is an effective control by the Government. In as much as the stock exchange is performing public function they have got a public duty to the members and their employees. Hence according to the petitioners they are amenable to writ jurisdiction. It is also one of the contentions of the petitioners that assuming that the stock exchange is an individual entity still a writ petition under Art. 226 would lie against the Company.

9. In support of the Constitution of the petitioners, the earned counsel relied upon the decitions reported in (1) AIR 1991 Bom 30, (2) AIR 1989 SC 1607, (3) AIR 1979 SC 1628, (4) AIR 1993 SC 2178, (5) AIR 1975 SC 1331 and (6) AIR 1981 SC 487. We will deal with these decisions a little later.

10. In Opposing the petition learned senior counsel Mr. P.K Kurian made the following submissions. (1) There is no basis to treat the 1st respondent Stock Exchange as an authority under Art. 12 of the Constitution of India. (2) The writ in the nature as prayed for cannot, be issued. (3) In so far as O.P No. 6957/95 is concerned the facts disclose a master and servant relationship between the parties and the termination of the petitioner was made in accordance with the terms of the contract. Therefore, the petitioner is not entitled to the relief of reinstatement. Lastly the learned counsel submitted that the provisions of the Act are only regulatory in nature and they would not confer the status of an authority to the stock exchange. He also submitted that the decision rendered in AIR 1991 Bom 30 has not laid down the correct law. He further relied upon the following decisions, in support of his contention.

11. In Shri Anadi Mukta Sadguru S.M.V.S.J.M.S Trust v. V.R Rudani, AIR 1989 SC 1607 the Supreme Court held that there are two exceptions for the issuance of a writ of mandamus. (1) If the rights are of a purely private character. (2) If the management is purely a private body with no public duty. But once these are absent and when the party has no other equally efficacious remedy, mandamus cannot be denied. Art. 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words “any person or authority” used in Art. 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. In the case before the Supreme Court the appellant-trust was managing the affiliated college to which public money is paid as Government aid and that plays a major role in the control, maintenance and working of educational institutions. The aided institutions like Government institutions discharge public function by way of imparting education to students. They are subject to the rules and the regulations of the affiliating University. Their activities are closely supervised by the University authorities. Employment in such institutions, therefore, is not devoid of any public character. In that view of the matter the Supreme Court held that mandamus cannot be refused to the aggrieved party. In that case the Supreme Court referred to the earlier decisions in Executive Committee of Vaish Degree College, Shamli v. Lakshmi Narain, AIR 1976 SC 888 and Dipak Kumar Biawas v. Director of Public Instruction, (1987) 2 SCC 252 : (AIR 1987 SC 1422), which were relied upon by the learned counsel for the 1st respondent here. The Supreme Court while approving those decisions distinguished the same in the decision in Shri Anadi Mukta Sadguru's case, AIR 1989 SC 1607. While distinguishing those two decisions the Supreme Court also observed that the management of the college was not a statutory body since it was not created by or under a statute. It was emphasised that an institution which adopts certain statutory provisions will not become a statutory body and the dismissed employee cannot enforce a contract of personal service against a non-statutory body.

12. In Ramana v. I.A Authority of India, AIR 1979 SC 1628 the Supreme Court in para 19 of their judgment set out the various factors which may have to be considered in determining whether a corporation is an agency or instrumentality of the Government. Those factors are financial assistance, control of the management and policies of the corporation, State protected monopoly status and the functions carried out by the corporation. The Supreme Court has also held that particularisation of relevant factors is however not exhaustive and by its very nature it cannot be so. Applying these here, we do not find any of the factors in existence in the case of the 1st respondent Company so as to say that the 1st respondent is an agency or instrumentality of the Government. The only plausible argument that could be accepted is that to some extent there is regulation over the management. But the extent of control as could be seen from the various provisions of the Act are only regulatory in character. The State does not lay down policies for the stock exchanges and apart from being represented by certain Government owned Corporations the management is totally independent of the Government control and there is no material to say that the stock exchange is an agency of the Government.

13. In Unni Krishnan, J.P v. State of A.P, AIR 1993 SC 2178 the Constitution Bench of the Supreme Court in para 83 held as follows:

“The emphasis in this case is as to the nature of duty imposed on the body. It requires to be observed that the meaning of authority under Art. 226 came to be laid down distinguishing the same term from Art. 12. In spite of it, if the emphasis is on the nature of duty on the same principle it has to be held that these educational institutions discharge public duties. Irrespective of the educational institutions receiving aid it should be held that it is a public duty. The absence of aid does not detract from the nature of duty.”

Referring to this decision learned counsel submits that the stock exchange discharges public duty and therefore amenable to Art. 226. But we are unable to find from the Memorandum of Association that the stock exchange discharges any public duty. Public education is the duty of a welfare State and if the said duty is performed by a private institution it could be held to be discharging a public duty. But in this case there is no duty cast upon the Government to run stock exchanges and in the absence of it the 1st respondent stock exchange which does the business of securities cannot be termed as discharging public duty.

14. In Sukhdev v. Bhagatram, AIR 1975 SC 1331 in para 35 of the judgment it was held as follows:

“The rules and regulations are authoritative because these rules and regulations direct and control not only the exercise of powers by the Corporations but also all persons who deal with these corporations.”

Further in para 36 the Supreme Court held that the expression “other authorities” in Art. 12 is wide enough to include within it every authority created by a statute and functioning within the territory of India, or under the Control of the Government of India. The expression “other authorities” will include all constitutional or statutory authorities on whom powers are conferred by law. The above decision will not support the case of the petitioners since the stock exchanges are not acting under the powers conferred by any law.

15. In Ajay Hasia v. Khalid Mujib, AIR 1981” SC 487 the Supreme Court held that having regard to the Memorandum of Association and the Rules of the Society, the Society is an instrumentality of the agency of the State and the Central Governments and it is an “authority” within the meaning of Art. 12. In the said decision in para 9 the Supreme Court summarised the relevant tests gathered from the decision in the International Airport Authority's case, AIR 1979 SC 1628, which is as follows:

“(1) One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of Government.

(2) Where the financial assistance of the State is so such as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with govermental character.

(3) It may also be a relevant factor ….. whether the corporation enjoys monopoly status which is the State conferred or State protected.

(4) Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality.

(5) If the functions of the corporation of public importance and closely related to govermental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government.

(6) Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government.”

By applying this principle the Supreme Court in that decision held that the Society is an instrumentality or the agency of the State and the Central Governments and it is an ‘authority’ within the meaning of Art. 12. The Supreme Court found in that case that having regard to the Memorandum of Association and the Rules of the Society, the composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu and Kashmir, Punjab. Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu and Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The management of the Society is under the control of the State and the Central Governments. If we apply the criteria laid down by this decision, we are not in a position to say that the stock exchange is an authority falling within the definition of ‘State’ in Art. 12 of the Constitution.

16. In Sejal Rikeen Dalal v. Stock Exchange, Bombay, AIR 1991 Bom 30 the learned Judge has taken the view that a Stock Exchange is amenable to jurisdiction of the High Court under Art. 226 of the Constitution. The said case arose out of a decision of the Stock Exchange rejecting the application for a transfer of membership. While rejecting the objection of the Stock Exchange that a writ will not lie against it, after following Shri Anadi Mukta Sadguru's case, AIR 1989 SC 1607 the learned Judge held that the Stock Exchange is, inter alia, established to assist, regulate and control dealings in securities and to ensure fair dealings. According to the learned Judge these are objects of public interest and therefore, taking a wide interpretation given to Art. 226 of the Constitution, the Stock Exchange can be considered, for the purpose of this petition, as amenable to the jurisdiction of the High Court under Art. 226 of the Constitution. The said decision, in our view, has not been correctly decided the points in issue. The Bombay High Court failed to take note of the series of decisions on this point of the Supreme Court and also the ratio laid down in Shri Anadi Mukta Sadguru's case, AIR 1989 SC 1607. We have already set out the principles underlying the said case in the earlier paragraphs.

17. Coming to the decisions cited on behalf of the respondent, in Chander Mohan Khanna v. N.C.E.R.T, (1991) 4 SCC 578 : (AIR 1992 SC 76) the Supreme Court while holding that N.C.E.R.T does not fall within the definition of ‘State’ in Art. 12, held that the combination of State aid coupled with an unusual degree of control over the management and policies of the body, and rendering of an important public service being the obligatory functions of the State may largely point out that the body is “State”. The Supreme Court further held that Art. 12 should not be stretched so as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression “State”. A wide enlargement of the meaning must be tempered by a wise limitation. It must not be lost sight of that in the modern concept of Welfare State, independent institution, corporation and agency are generally subject to State control.

18. In Tekraj v. Union of India, AIR 1988 SC 469 the Supreme Court held that the Institute registered under the Societies Registration Act is not “State” within the meaning of Art. 12 of the Constitution. The Supreme Court further held that in a Welfare State, Governmental control is very pervasive and in fact touches all aspects of social existence. In the absence of a fair application of the tests to be made, there is possibility of turning every non-governmental society into an agency or instrumentality of the State. That obviously would not serve the purpose and may be far from reality.

19. In Dipak Kumar Biswas v. Director of Public Instruction, (1987) 2 SCC 252 : (AIR 1987 SC 1422) the Supreme Court held that even though the college in question may be governed by the statutes of the University and the Education Code framed by the Government of Meghalaya and even though the college may be receiving financial aid from the Government it would not be a statutory body because it has not been created by any statute and its existence is not dependent upon any statutory provision. Though the action of the college in terminating the services of the appellant on ground of want of the Director's approval had been held to be wrongful but even so it was not in contravention of any statutory provisions of regulations or procedural rules. Therefore, Supreme Court held in that case that it is not possible to grant a declaration that the appellant continues to be in the service of the college and that he is entitled to all the benefits flowing from the declaration.

20. In Banchhanidhi v. State of Orissa, AIR 1972 SC 843 the Supreme Court held that contractual rights cannot be enforced by a writ.

21. In the decision in U.P Warehousing Corpn. v. Vijay Narayan, AIR 1980 SC 840 the Supreme Court held that in matters of employment, while exercising its supervisory jurisdiction under Art. 226 of the Constitution, over the orders and quasi-judicial proceeding of an administrative authority — not being proceeding under the industrial/labour law before an industrial labour tribunal — culminating in dismissal of the employee, the High Court should ordinarily, in the event of the dismissal being found illegal, simply quash the same and should not further give a positive direction for payment to the employee full back wages.

22. In Sofhi v. F.A.C.T, 1984 Ker LT 32 : (1984 Lab IC (NOC) 110) a Division Bench of this Court while holding that F.A.C.T ‘an authority’ is within Art. 12 of the Constitution, summarised the characteristic features in order to decide whether the institution is an instrumentality or agency of the Government, which is as follows:

“(a) The entirely or a massive majority of the share capital in the hands of the Government is a penetrating index that it is an instrument or agent of the Government.

(b) ‘Deep and pervasive’ State control is an affirmative assurance that it, is Government agency or instrumentality. This can be gathered from the following surrounding circumstances as well:—

(i) Domination in the composition of the Society or company by the representatives of the Government.

(ii) Subjection to the directions of the Government for the performance of its functions.

(iii) The concurrence or approval of the Government for making rules and regulations.

(iv) The accounts requiring scrutiny and satisfaction of the Government.

(v) The effective control of the affairs of the Society/Corporation by the Government.

(c) Substantial financial assistance by the Government meeting practically the entire expenditure of the Company gives an added colour and flavour of Governmental agency.

(d) The public importance of the functions, in its nature allied to Governmental activity, is also yet another vital indication.

(e) Monopoly status of the Corporation either conferred or protected by the State.

(f) Statutory, origin of the Corporation/Company may be the hall mark of ‘State’, but the absence of this birth mark need not exclude it from the expansive area of ‘State’ within Art. 12.”

By applying these tests we are unable to find I any of the ingredients in the case of Cochin Stock Exchange.

23. In Thomas v. South Indian Bank Ltd., (1987) 1 Ker LT 101 a Division Bench of this Court held that the two Scheduled Banks viz. the Catholic Syrian Bank Ltd., and the Southe Indian Bank Ltd., are not amenable to the writ jurisdiction under Art. 226 of the Constitution as they are not ‘other authorities’ within the meaning of Art. 12. While coming to the conclusion the Division Bench held that there is no deep and pervasive State control, nor is the management of the Banks controlled by the representatives of the Government. There is no financial assistance by the Government. Even though the Reserve Bank of India has a-hold and control over the functioning of the Scheduled Banks and they are discharging public functions, these cannot make the banks instrumentalities of the State.

24. In Johnson v. Kerala Industrial and Technical Consultancy, ILR (1992) 1 Ker 808 Pareed Pillay, J. (as he then was) held that the Kerala Industrial and Technical Consultancy Organisation Ltd. is not a ‘State’ within the meaning of Art. 12. The learned Judge after considering the management, control, the object and the service it renders held that these features sufficiently show that the Kerala Industrial and Technical Consultancy Orgn. Ltd. is not an instrumentality of the State.

25. Applying these tests laid down by the Supreme Court and this Court in the various decisions and after going through the Memorandum of Association as pointed out by the learned counsel on both sides, we do not find any of the control envisaged by the decisions over the Stock Exchange so as to say that there is a pervasive and effective control over the management of the Stock Exchange. Cochin Stock Exchange is a Company registered under the Companies Act. Some of the important provisions which were pressed into service for the purpose of showing that there is a deep pervaisve control by the State are — Art. 6 where a Government owned Corporation is also eligible to apply for membership of the Exchange, Art. 106 which provides for the nomination of one or more persons not exceeding three in number as members of the Council of Management. Under Art. 126 the Secretary shall be appointed with the prior approval of the Central Government. The terms and conditions of such appointment shall be subject to the approval of the Central Government. The bye-laws and the rules of the Company shall be subject to the provisions of the Securities Contracts (Regulation) Act, 1956. Similarly the Act provides for regulatory measures like recognition, withdrawal of recognition, direction to make rules, power to suspend business and power to supersede the governing body. As it could be seen in the preamble to the Act, the Securities Contracts (Regulation) Act is an Act to prevent undesirable transactions in securities by regulating the business of dealing therein, by prohibiting options and by providing for certain other matters connected therewith. Thus the said Act is purely regulatory in character.

26. Applying the tests laid down by the series of Supreme Court decisions, we do not find that these regulatory measures by itself are sufficient in the absence of any other factors like financial assistance, control of management and policies, State protected monopoly status and public functions, so as to come to the conclusion that the 1st respondent Company is an authority amenable to writ jurisdiction under Art. 226 of the Constitution.

27. The subject-matter in both the matters are purely contractual in character. Therefore, in any event, the issue relating to the violation of the bye-laws of the Company and appointment of arbitrator for realising the claim of another member and the issue relating to the termination of services of an employee are purely in the realm of contract. Therefore the extraordinary/jurisdiction under Art. 226 is not the proper forum for the reliefs prayed for.

For all these reasons stated above, we do not find any merits in any of those contentions raised by the petitioners. Accordingly the Writ Appeal and the Original Petition are dismissed. However, no order as to cost.

Order accordingly.