Decided on October 10,2007

S.C. SHARMA Appellant
UNION OF INDIA Respondents


SANJIV KHANNA, J - (1.) The present appeal has been filed by Mr. S.C. Sharma, an erstwhile employee of Modi Rubber Limited, the respondent No. 8 herein. It is the case of the appellant that on 12th September, 1972 he was appointed as Stenographer with the respondent No. 8. On 26th August, 1996 his services were terminated by giving one month salary in lieu of notice. Aggrieved, the appellant filed Writ Petition No. 3654/1996 on 23rd September, 1996 challenging his termination from service on the ground that it is in violation of principles of natural justice, Articles 14, 19(1)(g) and 21 of the Constitution of India.
(2.) Before the Learned Single Judge, preliminary objection was taken by the respondent No. 8 that the writ petition was not maintainable as the said company is not a "State" or an "instrumentality" or an "agency" of the Government within the meaning of Article 12 of the Constitution of India. By the impugned judgment dated 11th August, 2000, Learned Single Judge has held that the writ petition was not maintainable as the respondent No. 8 is an incorporated company and, therefore, does not come within the sweep of Article 12 of the Constitution of India. It was also held that the Government does not exercise direct, deep and pervasive control over the respondent No. 8 merely because some of the financial institutions of the Government were shareholders or had given loans to the respondent No. 8 and their nominees were on the Board of the respondent no.8. The terms "any person" and "for any purpose" in Article 226 of the Constitution of India were also examined with reference to various judgments of the Supreme Court and the propositions as elucidated by H.M. Seervai in Constitutional Law of India, Fourth Edition. It was held that Article 226 cannot be construed to replace ordinary remedies available by way of a suit to a litigant or a citizen under general law of the land. The Learned Single Judge observed that once the history of the Prerogative Writs is kept in mind, there is no difficulty in understanding that the expression "any person" cannot include private persons who are not performing public functions. Learned Single Judge noticed the distinction between "public function" and "private functions". The contention that the respondent No. 8 was performing public function, was also rejected. The Court also noticed that the dispute between the appellant herein and the respondent No. 8 is based upon contract of personal service and the said contract it was held cannot be made subject matter of a writ petition. The expressions "any person" and "for any purpose" by itself would not entitle a citizen to file a writ petition against an incorporated company.
(3.) Learned counsel for the appellant, in addition to his oral submissions, has submitted before us written submissions going into 16 pages along with two voluminous compendiums of judgments. The arguments of the appellant can be condensed in the following words:- (i)Though the respondent No. 8 is a company incorporated under the Companies Act, 1956, several Government Companies Corporations like Industrial Financial Corporation of India, Unit Trust of India, Life Insurance Corporation of India, Industrial Development Bank of India and General Insurance Corporation of India hold shares in respondent No. 8 to the extent of 52.4% of its paid up equity share capital. They had nominated Directors on the Board of the respondent No. 8. Reference in this matter was made to the provisions of the Companies Act, 1956. Therefore, the respondent no. 8 is a state under Article 12 of the Constitution. (ii) Respondent No. 8 had taken loan from public financial institutions and, therefore, the said respondent was performing public functions. Activities carried out by the respondent No. 8 were for public good, of vital and high public and national importance. It was the third largest tyre manufacturer company in the country. Some of the objects of the Memorandum of Association of the respondent No. 8, entrust it with important public duties. Thus, respondent No. 8 performed public functions. (iii) Writ petition under Article 226 is maintainable against any person and it is not necessary that the said person should be exercising sovereign public functions or should be a governmental authority. Writ petition under Article 226 of the Constitution of India is maintainable for any purpose without any limitation or restriction. Distinction between the private law and public law are not relevant. (iv) Fundamental rights of the appellant have been violated because his service has been terminated by giving one month notice. Action of the respondent No. 8 violates Articles 14, 19(1)(g) and 21 of the Constitution of India. Contract of personal service though not enforceable under the Specific Relief Act, but, Law does not permit arbitrary and illegal termination without reasons in violation of principles of natural justice.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.