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Girish Chandra Saxena v. Chief Executive, Standard Chartered Bank, Bombay And Others
Summary of the Opinion
Factual and Procedural Background
The respondent Bank is Standard Chartered Bank (referred to as "the Bank"), a banking company incorporated in England with its registered office in London. The petitioner was employed by the Bank at its Kanpur office. By an order dated 3-8-1993 the petitioner was removed from service. The petitioner filed a writ petition under Article 226 of the Constitution of India, seeking a writ of mandamus directing the respondents not to interfere with his working as Staff Officer, to pay salary regularly and to quash the termination. This Court granted an interim order on 3-12-1993 staying the operation of the termination order. A preliminary objection as to the maintainability of the petition was raised by the respondents and was to be decided first. The writ petition was ultimately dismissed and the interim stay discharged.
Legal Issues Presented
- Whether the right asserted by the petitioner is of a purely private character (i.e., derived from a contract of employment) such that a writ under Article 226 is not maintainable.
- Whether the Bank is a private body with no public duty and hence not amenable to writ jurisdiction under Article 226 (i.e., whether the Bank can be treated as a "person or authority" within the meaning of Article 226).
Arguments of the Parties
Petitioner's Arguments
- The petitioner disputed the respondents' preliminary objection to maintainability of the writ petition.
- The petitioner relied on several authorities (including Shri Anandi Mukta Sadguru v. V.R. Rudani and Unni Krishnan J.P v. State of Andhra Pradesh) to support the contention that the petition was maintainable under Article 226.
- The petitioner sought quashing of the termination order and continuance in service (i.e., he prayed for continuance and restoration of service in addition to other reliefs).
Respondents' Arguments
- The respondents raised a preliminary objection that the writ petition was not maintainable because the rights asserted by the petitioner were purely private and derived from an employment contract.
- They contended that the Bank is a private body incorporated under Royal Charter, not a governmental authority or State instrumentality under Article 12, and it does not discharge any statutory or public duty that would make it amenable to writ jurisdiction.
- They relied on precedent and the contractual nature of the employment relationship to argue that enforcement of the petitioner's contractual rights must be through contractual remedies rather than by writ under Article 226.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Shri Anandi Mukta Sadguru v. V.R. Rudani (1989) 2 SCC 691 : AIR 1989 SC 1607 | Writs (including mandamus) may not lie where rights are purely private or where the body is a private management with no public duty; private bodies performing public duty may be amenable. | Used as the primary authority setting out when private bodies may be subject to writ jurisdiction; court distinguished its facts (trust discharging public duty) from the present case of a private bank. |
| Bareilly Development Authority v. Ajay Pal Singh (1989) 2 SCC 116 : AIR 1989 SC 1076 | Where a contract entered into between State and an aggrieved person is non-statutory and purely contractual, rights governed only by terms of contract cannot be enforced by writ under Article 226. | Applied to support the proposition that non-statutory contractual disputes are outside writ jurisdiction; court held petitioner's rights arose from a non-statutory employment contract. |
| Radha Krishna Agarwal v. State of Bihar (1977) 3 SCC 457 : AIR 1977 SC 1496 | Part of the line of decisions establishing that pure contractual breaches are not remediable by writ under Article 226. | Relied upon as part of authorities showing contractual disputes fall outside writ jurisdiction. |
| Premji Bhai Parmar v. Delhi Development Authority (1980) 2 SCC 129 : AIR 1980 SC 738 | Authority for limitation of writ jurisdiction where rights arise purely from contract. | Cited to reinforce that the impugned order arising from non-statutory contract cannot be challenged by writ. |
| D.F.O. v. Biswanath Tea Company Ltd. (1981) 3 SCC 238 : AIR 1981 SC 1368 | Similar principle on the non-availability of writ for pure contractual disputes. | Used as part of the precedent line excluding contractual matters from Article 226 relief. |
| R. v. British Broadcasting Corporation, ex parte Lavelle (1983) 1 All ER 241 | Judicial review/jurisdiction is confined to activities of a public nature as opposed to purely private or domestic character; contractual disciplinary procedures are private. | Invoked to show that employment disputes under private contract (as with the BBC) do not attract judicial review remedies; court relied on its reasoning when treating the Bank's action as contractual. |
| Chander Mohan Khanna v. NCERT (1991) 4 SCC 578 : AIR 1992 SC 76 | State control, financial aid or regulation alone do not automatically convert a body into "State" under Article 12; combination of State aid, pervasive control and obligatory public functions may. | Applied to conclude that regulatory permission (e.g., Reserve Bank permission) and regulation do not make the Bank a State instrumentality; the Bank remains a private body here. |
| P.K. Ramachandra Iyer v. Union of India (1984) 2 SCC 141 : AIR 1984 SC 541 | Illustrative authority on identifying a body as State when it carries out governmental functions under a corporate veil. | Referenced in the analysis of whether the Bank could be treated as State; used as part of the jurisprudence on when a private body may be considered State-like. |
| Central Inland Water Transport Corporation v. Brojonath Gangoli (1986) 3 SCC 156 : AIR 1986 SC 1571 | Another authority on the criteria for treating a body as State (e.g., state control, public function). | Used as part of the comparative authorities to assess whether the Bank discharged public duties making it amenable to writ jurisdiction. |
| Tekraj Vasandhi alias K.L. Basandhi v. Union of India (1988) 1 SCC 236 : AIR 1988 SC 469 | Further authority on State characterization of bodies and public function analysis. | Referred to in the context of the "State" analysis, supporting the proposition that mere regulation is insufficient to treat a body as State. |
| Executive Committee of Vaish Degree College, Shamli v. Lakshmi Narain (1976) 2 SCC 58 : AIR 1976 SC 888 | Relevant to distinguishing when educational institutions/charitable trusts discharge public duties and may be subject to writs. | Discussed and distinguished on facts; court noted differences between that case and the present matter involving a private bank and contractual employment rights. |
| Deepak Kumar Biswas v. Director of Public Instructions (1987) 2 SCC 252 : AIR 1987 SC 1422 | Pertains to when private institutions may be subject to writ jurisdiction based on public duties or statutory links. | Distinguished on facts; did not assist the petitioner because the Bank's action arose from a non-statutory contract. |
| Aley Ahmad Abidi v. District Inspector of Schools, AIR 1977 All 539 (Full Bench) | Held that a private body can be amenable to writ jurisdiction if it has passed an order in exercise of statutory provision. | The court held this case did not help the petitioner because the Bank had not acted under any statutory provision but under contractual rights. |
| Unni Krishnan J.P. v. State of Andhra Pradesh (1993) 1 SCC 645 : AIR 1993 SC 2178 | Recognized that the right to education is covered by Article 21 and that educational institutions under certain circumstances perform public duties and can be amenable to writ jurisdiction. | Distinguished and found not helpful to the petitioner because the present case concerned private contractual employment rights of a bank employee rather than fundamental right to education. |
| Kobad Jehangir Bharda v. Farokh Sidhwa (AIR 1991 Bombay) | Addressed whether expulsion by a school run by a public charitable trust could be challenged under Article 226; decided on its facts with reference to Anandi Mukta principles and statutory codes. | Cited by petitioner but court noted it was decided on its own facts and did not support the petitioner's position in the present contractual employment dispute with a private bank. |
Court's Reasoning and Analysis
The court proceeded by identifying two central questions: (i) whether the petitioner's asserted right was of a private character, and (ii) whether the Bank was a private body with no public duty such that it was not amenable to writ jurisdiction.
On the first question, the court noted that the petitioner was employed under an agreement of employment (filed as Annexure-1 to the counter affidavit) which permitted termination on three months' notice or pay in lieu. The court concluded that the petitioner's claimed right to continue in employment derived from this non-statutory agreement and was therefore a private contractual right. The court relied on authorities (including Bareilly Development Authority v. Ajay Pal Singh and related decisions) to state the principle that where rights arise from non-statutory contracts, relief under Article 226 is not available to remedy a pure breach of contract.
On the second question, the court examined whether the Bank could be treated as a "person or authority" performing public duty or as a State instrumentality under Article 12. The court observed that the Bank is a private banking company incorporated in England under Royal Charter, carrying on business in India, and that there were no statutory rules governing its employees' service conditions. The court relied on Chander Mohan Khanna v. NCERT and similar authorities to emphasize that mere State regulation or permission (for example, carrying on business with the permission of the Reserve Bank of India) does not convert a private body into a State or make it amenable to writ jurisdiction. The court found no record of financial aid by the State or unusual State control over the Bank; its control by the State was regulatory in nature only.
The court also considered and distinguished the petitioner's authorities (such as Shri Anandi Mukta Sadguru and Unni Krishnan) where institutions were found to discharge public duty because of government aid, statutory affiliation, or obligations imposed by statute or university regulations. The court pointed out that those cases turned on their specific facts (e.g., government aid, affiliation, statutory supervision) which were absent here.
Having found that the cause of action arose from a non-statutory contract and that the Bank did not discharge any statutory or public duty making it an authority under Article 226, the court concluded that the right asserted by the petitioner was purely private and that the Bank was not amenable to writ jurisdiction. Accordingly, the writ petition was not maintainable.
Holding and Implications
Core Holding: The writ petition under Article 226 is dismissed as not maintainable: the petitioner’s rights arise from a non-statutory contract and the Bank is a private body not amenable to writ jurisdiction.
Direct consequences:
- The writ petition was dismissed with costs.
- The interim stay order (staying the operation of the termination) granted on 3-12-1993 was discharged.
Broader implications:
- The decision confirms the court's application of the established principle that contractual employment disputes where rights are derived from a non-statutory contract fall outside the scope of writ remedies under Article 226, unless the body in question is discharging statutory or public functions making it amenable to writ jurisdiction.
- The opinion does not purport to lay down any new legal principle beyond applying existing authorities to the facts; it resolves the dispute between the parties by denying writ relief where the cause of action is contractual and the employer is a private body.
1. Stahdarad Chartered Bank respondent 3(herein after referred to as the Bank) is a banking company incorporated in England with limited liability by Royal Charter having its registered office at 1, Aldermandbury Square, London, petitioner was an employee of the Bank working in its office at Kanpur. By order dated 3-8-1993 petitioner has been removed from service by the Bank it is against this order that he has filed this writ petition before this Court under Article 226 of the Constitution tion of India. Prayer for writ of mandamus directing the respondents not to interfere with the working of the petitioner in the Bank as Staff Officer and further to pay him salary regularly andnot to give effect to the aforesaid order of termination has also been made. This Court on 3-12-1993 has granted an interim order staying the operation of the above order of termination of service.
2. At the threshhold, a preliminary objection regarding maintainability of this petition has been raised on behalf of respondents, which has been disputed by the learned counsel for the petitioner. It is this question which is to be decided first. In the case of Shri Anandi Mukta Sadguru v. V.R Rudani, (1989) 2 SCC 691 : AIR 1989 SC 1607 relevant extract from which is reproduced below, Supreme Court has laid down that writ cannot be issued by a High Cqurt if rights are purely of private character or if the person or authority is private body with no public duty.
“If the rights are purely of a private character no mandamus can issue. If the management of the college is purely a private body with no public duty mandamus will not lie. These are the two exceptions to Mandamus.” (Para 14 of AIR)
Although the above observations have been made with regard to mandamus but same principles will apply in the case of writ of certiorari also. This Court under Article 226 of the Constitution can issue a writ to any person or authority within the territory in relation to which it exercises jurisdiction, but the “person” or “authority” should be either statutory authority or agency or instrumentality of the State. They may also cover any other person or authority performing public duty. Private persons or private bodies are not amenable to writ jurisdiction unless they exercise some statutory powers or discharge public duty. Supreme Court in the above case of Sri Anandi Mukta Sadguru ((1989) 2 SCC 691 : AIR 1989 SC 1607) has, in this connection, laid down as under (para 19):
“The wordsany person or authority” used in Article 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. 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 bejudged in the light of positive obligation owed by the person or authority to the affected party.
3. Questions which are required to be decided for resolving this controversy in the instant case are (i) Whether the right which is being asserted by the petitioner is of private character, and (ii) whether the Bank is a private body with no public duty.
4. Bank is neither Governmental authority nor agency or instrumentality of the State and as such is not a State within the meaning of Article 12 of the Constitution. It is private banking company incorporated in England under the Royal Charter and is carrying on business in India at various places including Kanpur. There are no statutory Rules or Regulations framed for regulating the conditions of service of the employees of the Bank. Petitioner has been employed by the Bank under an agreement of employment, copy of which has been filed as Annexure-1 to the counter affidavit, under which his service can be terminated by the Bank after three months notice or three months pay in lieu thereof Right to work in the Bank which petitioner claims is right which is derived from agreement which has been executed by him with the bank and this agreement is not a statutory agreement. Right which the petitioners wants to be enforced by means of this writ petition is of private character. For enforcing such a right writ petition under Article 226 of the Constitution is not maintainable.
5. No writ petition can be maintained even against the statutory authority where the impugned order has not been passed in exercise of statutory provisions, but has been passed under a non-statutory contract. In this connection reference may be made to a decision of Bareilly Development Authority v. Ajay Pal Singh, (1989) 2 SCC 116 : AIR 1989 SC 1076, where it was laid down as under (Para 21):
“There is a line of decisions where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple: Radha Krishna Agarwal v. State of Bihar, (1977) 3 SCR 249 : (1977) 3 SCC 457 : AIR 1977 SC 1496, Premji Bhai Parmar v. Delhi Development Authority, (1980) 2 SCR 704 : (1980) 2 SCC 129 : AIR 1980 SC 738 and D.F.O v. Biswanath Tea Company Ltd., (1981) 3 SCR 662 : (1981) 3 SCC 238 : AIR 1981 SC 1368).
6. In R.V British Broadcasting Corporation, exparte Levelle, (1983) 1 All ER 24.1, the applicant who was employed by British Broadcasting Copora tion under a contract of employment was dismissed from service, after giving her contractual notice, an appeal was presented against the above order, which was also dismissed. She challenged those orders before the Court for certiorari for getting them quashed. Her petition was rejected on the grdund that the right which she was asserting was of privateor domestic character based on contract of employment. Relevant passage from the judgment of this casejs reproduced below
“Not with standing the present wording of Order 53, Rule 1 and Section 31 of the 1981 Act, the position remains the same and, if this application has been confined to ah application for an order of certiorari, in my view there would have been no jurisdiction to make the order sought. However, in seeking a stay, the applicant is seeking, in effect, an injunction. The matter was argued before me on the basis that relief by way of an injunction was being sought on the application for judicial review. Paragraph (2) of Rule 1 of Order 53 does not strictly contain applications for judicial review to cases where an order for mandamus, prohibition or certiorari could be granted. It merely requires that the Court should have regard to the nature of the matter in respect of which such relief may be granted. However, although applications for judicial review are not confined to those cases where relief could be granted by way of prerogative of order, I regard the wording of Order 53, Rule 1(2) and subsection (2) of Section 31 of the 1981 Act as making it clear, that the application for judicial review is confined to reviewing activities of a public natureas opposed to those of a purely private or domestic character. The disciplinary appeal procedure set up by the BBC depends purely on the contract of employment between the applicant and the BBC, and, therefore, it is. procedure of a purely private or domestic character.
7. Bank, as mentioned hereinbefore, is a private banking company incorporated under Royal Charter in England and is a private body. It is not exercising any power or discharging any duty under any statute. It is also not discharging any public duty. It is doing only thebusiness of banking like any other businessman. The fact that Bank carries on business under the permission of Reserve Bank of India does not change either its charactor or nature of order passed by it. In Chander Mohan KHanna v. The National Council of Educational Research & Training, (1991) 4 SCC 578 : AIR 1992 SC 76, Supreme Court while dealing with similar argument, has laid down as follows (At p. 78, para 3):
It must not be lost sight of, that in the modern concept of Welfare State, independent institution, corporation of and agency are generally subject to State control. The State control does not render such bodies as State under Article 12, The State control, however, vast and pervasive, is not determinative. The financial, contribution by the State is also not conclusive, The combination of State aid coupled wlth an unusual degree of control over the management andpqlicies of the body, and rendering of an important public service being the obligatory functions the State may largely point out that the body is State. If the Government operates behind a corporate veil, carrying out Governmental activity and Governmental functions of vital public importance, there may be little difficulty in identifying the body as State, within the meaning of Art. 12 of the Constitution, (See: (i) P.K Ramachandra Iyer v. Union of India, (1984) 2 SCC 141 : (AIR 1984 SC 541; (ii) Central and land Water Transport Corporation v. Brojonath Gangoli, (1986) 3 SCC 156 : AIR 1986 SC 1571 and (iii)Tekraj Vasandhi alias K.L Basandhi v. Union of India, (1988) 2 SCR 260 : (1988) 1 SCC 236 : AIR 1988 SC 469.
Although above observations were made by Supreme Court while considering the question whether respondent therein was a State within the meaning of Article 12 of-the Constitution, but those observations are equally good and appropriate in order to find out as to whether a private body, which;carries on business under the permission of the State, can be treated as ah authroity amenable to writ jurisdiction of the High Court. In the instant case control of the State over the bank is purely regulatory in nature. There is nothing on record to show any-financial aid by the State to the Banknor is there anything-to indicate unusual control of the State over it. The Bank is private body and has passed-theimpugned order, notin discharage of-any statutory or public duty, but inexercise of its right under a non-statutory contract. It is thus Clear that the cause of action has not arisen out of exercise of statutory obligation, but has arisen out of non-statutory contract. The right which the petitioner is asserting is purely of private character and Bank is not an authority within the meaning of Article 226 of the Constitution and as such is not amenable to writ jurisdiction.
8. learned counsel for the petitioner has placed reliance on Shri Anandi Mukta Sadguru v. V.R Rudani, (1989) 2 SCC 691 : AIR 1989 SC 1607; Kobad Jehangir Bharda v. Farpkh Sidhwa, AIR 1991 Bombay 16; Aley Ahmad Abidi v. District Inspector of Schools, AIR 1977 All 539 (FB) and Unni Krishnan J.P v. State Andhra Pradesh, (1993) 1 SCC 645 : AIR 1993 SC 2178 in support office submission that the writ petition is frtamtainabie. These cases do not lend any support to the case of the petitioner. In the case of Shri Anandi Mukta Sadgwu (supra) Supreme Court has held that the trust was discharging public luty on account of following reasons.
(1) It is managing a college affiliated 10 the University to which public money is paid as, Government aid, which play a major role in the control, maintenance and working of the college.
(2) Government aided institutions, imparting education discharge public functions.
(3) the college being affiliated to the University is subject to Rules and Regulations, of, affiliating University and its activities are supervised by the University; and
(4) The service conditions of the academic staff tif the college are governed by the Regulations and Ordinances framed by the University and any-decision taken by the University is binding on the management of the college.
It was accordingly held that the service conditions of the staff of the college are not purely of Private character and the trust is discharging public duty and as such, it is amenable to writ jurisdiction. In this connection it may also be mentioned that while, distinguishing the cases of Executive Committee of. Vaish Degree College Shamli v. Laknshmi Narain, (1976) 2 SCC 58 : AIR 1976 SC 888 and Deepak Kumar Biswas v. Director of Public Instructions, (1987) 2 SCC 252 : (AIR 1987 SC 1422) the Surpeme Cimrfheid that members of the staff of the college of trust were neither pleading for specific performance of Contractual service nor were they claiming right tp continue in service. This is clear from para 13 of the judgment, which is reproduced below:
“But here the facts are quite different and, therefore we need not go thus far, There is rio pica for specific performance or contractual service. The respondents are not seeking a declaration that they be Continued in service. They are not asking for mandamus to put them back into the college. They are claiming only the terminal benefits and arrears of salary payable to them. The question is whether the trust Canbe compelled to pay by a writ of mandamus. In the instant case the, petitioner has prayed for qiiashihgthe order of termination and for continuance of his service. Bank, as mentioned above, is neither an authority exercising any public or statutory duty; nor, the impugned order, passed by it, comes within the domain of public law function. Similar decision of Full Bench of this Court in Aley Ahmed Abidi v. Distt. Inspector of Schools. AIR 1977 All 539 (FB) (supra) cannof be of any assistance to the petitioner, because, in that case it was laid down that private body can be amenable to writ jurisdiction of High Court,-if it has passed any order in exercise of any statutory provision Case of Unni Krishnan J.P v. State of Andh Pradesh, (1993) 1 SCC 645 : AIR 1993 SC 2178 (supra) is also of lip help to the petitioner. In that case it was laid down that right to education is fundamental right covered under Article 21 of the Constitution. While dealing with this question Hon'ble Mohan, J. referred tp the case of Supreme Court in Shri Anandi Mukta Sadguruf (1989) 2 SCC 691 : AIR 1989 SC 1607) (supra) and the decision in R. v. British Broadcasting Corporation, ex parte Lavelle, (1983) 1 All ER 241. If the educational institutions discharge public duty, they are amenable to writ jurisdiction of the High Court. In the case of Kobad Jehangir Bharda v. Farokh Sidhwa, AIR 1991 Bombay 1 (supra) the question was whether expulsion of student by the school, which is run by a public Charitable trust, can be challenged before High Court under Article 226 of the Constitution. Following the decision of Supreme Court in the case of Shri Anandi Mukhta Sad guru (supra) and provisions of. Secondary Schools Code, Bombay High Court answered the question in affirmative and held that act of suchinstitution can be challenged under Article 226 pf the Constitution. This case was decided on its own facts. When right to education is fundamental right covered under Article 21 of the Constitution, educational institutions under certain circumstances can be said to perform public duties, and their orders can be challenged before High Court under Article 226 of the, Constitution, unless they have been passed under a non statutory contract. In the instant case petitioner is asserting private right and Bank is private body with no public duty and the impugned order has been passed by it in exercise of non-statutory contract.
9. For the reasons given above, this writ petition is dismissed with costs. The stay order passed by the Court is discharged.
10. Petition dismissed.
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