JUDGMENT T. Chandrasekhara Menon, J. The Coir Board is a body corporate established and constituted under section 4 of the Coir Industry Act, 1963 (hereinafter called as the Act). This statutory authority was itself established with a view to develop the coir industry and to regulate and control the export and internal trade of coir, coir yarn and other coir products. The Board was established with effect from 9th February, 1954. The Coir Board, in accordance with the provisions of the Act, is to consist of a Chairman and such number of other members as the Central Government may think expedient. Section 9 of the Act, provides for the appointment of a Secretary and for the appointment of such officers and employees as may be necessary for the efficient performance of its functions. The overall control of the activities of the Board are vested in the Central Government under the ministry of foreign trade. Section 18 of the Act says that all acts and proceedings of the Board shall be subject to the control of the Central Government which may cancel, suspend or modify as it thinks fit any action taken by the Board. It also provides that the Board shall carry out such directions as may be issued to it by the Central Government for the efficient administration of the Act and the records of the Board shall be open to inspection at all reasonable time by any officer authorised in this behalf by the Central Government. The Board has to submit to the Central Government and such other authority as may be prescribed a half yearly report and an annual report on its activities and the working of the Act for the preceding six months and the preceding year respectively. The Board also will have to prepare and submit such other returns relating to the coir industry as may be required by that Government from time to time. The Board also will have to prepare and submit such other returns relating to the coir industry as may be required by that Government from time to time. Under section 27 of the Act, the Board may make bylaws consistent with the Act and the rules made thereunder, to provide for, among other things, the appointment, promotion and dismissal of its officers and other employees other than the Secretary and the creation and abolition of their posts; and the conditions of service of its officers and other employees other than the Secretary including their pay, leave, leave allowances, pensions, gratuities, compassionate allowances and travelling allowance and the establishment and maintenance of a provident fund for them. The petitioner who is an Upper Division Clerk in die Coir Board states that the Coir Board started functioning with its head office at Ernakulam with less than a dozen members of staff, most of them serving on deputation from the State and Central Governments. Within a short time the number of members of the staff increased and the activities of the Board widened. There are at present more than 200 members on its staff. In 1954 itself Government of India made the Coir Industry Rules which they are empowered to make under section 26 of the Act. Under rule 14 of the said rules, the Board is empowered to prepare budget estimates for every year and shall submit it for the sanction of the Central Government in the second week of October etc., and the budget shall include the proposed expenditure, which among other items take in pay of officers, pay of establishment, allowances, honoraria, etc., other charges, and contingencies. The Board also, in exercise of its powers conferred under section 27 of the Act, made bylaws, called the Coir Board (Transaction of Business, Conditions of Service of Employees and Maintenance of Accounts) Bylaws, 1955. Bylaw 15 of the said bylaws states that subject to the provisions of the Act and the rules made therein, all posts of officers and employees under the Board, other than the Secretary, shall be created and filled by the Board, provided that, the Executive Committee, the Chairman or the Secretary, as the case may be, may exercise such powers as may from time to time be delegated to it or him, by the Board. Bylaw 16 says that the authority competent to appoint an officer or any employee of the Board, shall only be competent to dismiss, remove, suspend, or demote such officer or employees. In regard to conditions of service, bylaws 17 and 18 provides as follows” "17. The following rules shall regulate the grant of pay, leave, allowance, etc., to the officers and employees of the Board, other than the Secretary, that is to say” (1) the grant of pay, leave, leave salary and other allowances to the permanent officers of any Government whose services have been lent or transferred to the Board shall be regulated by the terms settled with that Government; (2) the grant of leave, pay and allowances to any other officers and employees of the Board shall be regulated by the Board which may delegate such of its powers in this respect as it may deem fit to the Executive Committee; Chairman or Secretary; (3) in exercising the powers under clause (2) the Board and the authority to whom such a power has been delegated, shall apply the principles of the Fundamental Rules and Supplementary Rules of the Government of India and other orders issued in this respect from time to time. (4) save with the previous sanction of the Central Government, no travelling and daily allowances shall be paid to any officer or employee of the Board in excess of the amount which would be admissible to him under the rules or orders for the time being applicable to a servant of the Central Government of the corresponding grade. 18. Service under the Board shall not qualify for any pension from the funds of the Board.� There are no provisions in the bylaws in regard to the recruitment of the staff of the Board or in respect of pension payable to the staff of the Board. The staff pattern as such is not provided for in the bylaws. The feeder categories in respect of promotion posts are also not specified in any bylaws. In 1967 the Coir Board Staff Association was formed which was recognised as the representative body of the staff. The staff pattern as such is not provided for in the bylaws. The feeder categories in respect of promotion posts are also not specified in any bylaws. In 1967 the Coir Board Staff Association was formed which was recognised as the representative body of the staff. It is stated in the petition that sometime in 1969 two representatives of the association and two representatives of the office met, the Chairman presiding and framed a set of draft rules governing the classification, control and appeal in respect of the service, under the Coir Board. The draft rules were prepared concerning the conduct of employees as well. Rules relating to recruitment, promotion and retirement were also framed by the same body. These draft rules were placed before the Board which approved it and sent it for the final approval of the Central Government, and due publication in the official gazette. The Board also took a decision on 29th September 1967 that if the draft rules are approved and published in the gazette, the draft rules framed as foresaid shall be the guiding principles in respect of matters covered under those rules. By notification in the official gazette, sometime in January, 1969, the Central Government published the Coir Board Service (Classification, Control and Appeal) Bylaws, 1969 and the Coir Board Employees (Conduct) Bylaws, 1968, the latter being published in the year 1968. It is stated that in the matter of rules relating to pension and recruitment, the Central Government sought some clarification and the then Chairman instead of clarifying the position changed the rules materially, without even consulting the representatives of the Coir Board Staff. It is alleged in the petition that nothing further was heard about the draft rules relating to recruitment and pension. The petitioner has approached this court for a writ of mandamus calling upon the Board and the Government of India to immediately frame and implement rules relating to recruitment, promotion, etc., governing the service conditions of the employees of the Coir Board. The petitioner contends that otherwise arbitrary appointments and promotions would be made as is alleged to be being made now. New appointments and promotions were made as and when it suited the likes and dislikes of the Chairman and the Secretary, without conforming to any standards as regards qualification, experience or entitlement to such appointments or promotions. The petitioner contends that otherwise arbitrary appointments and promotions would be made as is alleged to be being made now. New appointments and promotions were made as and when it suited the likes and dislikes of the Chairman and the Secretary, without conforming to any standards as regards qualification, experience or entitlement to such appointments or promotions. Some instances where the Board has acted arbitrarily are pointed out in the Original Petition. It is also stated that the Minister for Industrial Development under whose ministry the Coir Board is functioning expressed his desire to frame rules regulating the recruitment and promotion of the employees of the Coir Board, in the meeting of the Board held on 29th September 1973. It is further stated that the parliamentary committee on Subordinate Legislation (4th Lok Sabha) has expressed its resentment for not framing rules relating to the service conditions of the Coir Board Employees. In the circumstances, it is pointed out in the petition that a member of the Board Sri C. K. Chandrappan, a member of the Lok Sabha representing the Tellicherry Constituency moved a private Bill for appropriately amending the Coir Industry Act, 1953. Para 7 of the objects and reasons states about the absence of recruitment rules in the Coir Board; what is stated therein is as follows:” "The executive authorities of the Coir Board had managed to run the Board for the last 18 years without properly framing and finalising its recruitment rules. The committee on Subordinate Legislation of Parliament of fourth Lok Sabha had expressed its resentment about this and wanted immediate finalisation. The Coir Board itself had taken steps to do this. But the officials had simply scuttled all these. The recruitment, promotion etc., of the Board therefore are alleged to have been done on the basis of favouritism, and nepotism. This situation generated tension and distrust among the employees of the Board. This is the reason for making a stipulation in the Amending Bill providing a time limit for firaming and finalising the Rule of Recruitment.� The petitioner states that the bill, however, has not come up for discussion in the Lok Sabha as the same failed to get priority in the ballot held under the legislative procedure followed relating to the business of the house. In the counter-affidavit that has been filed on behalf of the respondents by the Chairman of the Coir Board, the first contention that has been taken up is that the petitioner has no justiciable grievance to be agitated under Article 226 of the Constitution. It is also said that the assumption of the petitioner that there are at present no rules and regulations concerning appointments, promotions etc., of the employees under the service conditions of the Coir Board is incorrect. The Coir Board (Transaction of Business, Conditions of Service of Employees and Maintenance of Accounts) By­laws, 1955; the Coir Board (Classification, Control and Appeal) Bylaws, 1969: and the Coir Board Employees Conduct Bylaws, are pointedly brought to the attention of the court. It is stated therein that when new projects are undertaken, new posts are created by the Board and simultaneously qualifications, experiences and method of recruitment are also prescribed. The appointments to such posts are made on the recommendations of the Executive Committee as provided under the Coir Board (Transaction of Business, Conditions of Service of Employees and Maintenance of Accounts) Bylaws, 1955. The Coir Board (Classification, Control and Appeal) Bylaws, 1969 contains rules regarding dismissal, removal etc., of the officers and other staff of the Board. On this basis, it is contended that the prayer of the petitioner for the issuance of writ of mandamus, calling upon the respondents to make rules and regulations concerning the appointment, promotion and dismissal of the officers and employees of the Board is misconceived and it is not sustainable. The allegation in the petition that when the Government sought some clarification about the recruitment rules, then the Chairman materially changed the rules and furnished a revised draft rules is controverted., The Central Government wanted a revised draft of the rules, on the lines of the rules framed by the Cardamom Board and accordingly these rules were framed and submitted to the Coir Board and they have been approved by the Board. Thereafter, the said rules have been forwarded to the Central Government for approval and notification and they are under consideration of the Central Government. The allegation that the Coir Board is functioning arbitrarily etc., has been denied in the counter. Thereafter, the said rules have been forwarded to the Central Government for approval and notification and they are under consideration of the Central Government. The allegation that the Coir Board is functioning arbitrarily etc., has been denied in the counter. The instances pointed out in the petition about the alleged arbitrary action of the Board are sought to be explained and it is stated that there had been no illegal or arbitrary action by the Board. The various grounds taken in the Original Petition are controverted and the respondents seek a dismissal of the Original Petition. That there are no recruitment rules as such governing appointments and promotions in regard to Board employees is more or less admitted in the case. A bare provision in the Coir Board (Transaction of Business, Conditions of Service of Employees and Maintenance of Accounts) By­laws that subject to the provisions of the Act and the Rules made therein, all posts of officers and employees under the Board other than the Secretary shall be created and filled by the Board is not a substitute for proper recruitment rules. Human beings being what they are, absence of positive rules regarding appointment and promotion to various categories of posts under the Board is likely to lead to arbitrariness and favouritism in making appointments and promotions. This will be demoralising as far as employees are concerned. They should be able to look forward to legitimate promotions and better prospects in service. Their career should not in any way depend on the whims and fancies of the members of the Board or the higher officials at a particular time. The rules framed should certainly be flexible enough to provide for creation of new posts in particular situations for laying down qualifications for appointments to such posts etc. The rules could and should provide for definite standards as regards qualification, experience or entitlement to various appointments and promotions under the Board. As far as organisations which come within the ambit of the term State� under Article 12 of the Constitution, recruitment rules are essential so as to avoid arbitrary action the part of those in control of such organisation, which action would be violative of Article 16 of the Constitution. As far as organisations which come within the ambit of the term State� under Article 12 of the Constitution, recruitment rules are essential so as to avoid arbitrary action the part of those in control of such organisation, which action would be violative of Article 16 of the Constitution. That the Board will come within the four corners of the term State should be now beyond controversy in the light of the decision of the Supreme Court in Sukhdev Singh v. Bhagatram A.I.R. 1975 S.C. 1331. The State undertakes commercial functions in combination with governmental functions in a welfare State. Governmental function must be authoritative. It must be able to impose decision by or under law with authority. The element of authority is of a binding character. The Coir Board is above corporate established under section 4 of the Coir Industry Act, which controls the export of coir fibre, coir yarn and coir products. No coir fibre, coir yarn or coir product shall be exported otherwise than under a licence issued by or behalf of the Board in the prescribed manner. It has a public duty to promote such other measures as it thinks fit to the development of the coir industry under the control of the Central Government. The various functions entrusted to the Board under section 10 of the Coir Regulation Act would indicate that it undertakes commercial functions in combination with governmental functions. Therefore, the Coir Board will come within the ambit of the term State under Article 12 of the Constitution. As pointed out by the Supreme Court again in the case of Sukhdev Singh v. Bhagatram, A.I.R. 1975 S.C. 1331 aforementioned, as in the case of Life Insurance Corporation, Industrial Financial Corporation, regulations or bylaws containing terms and conditions of appointment of service personnel under the Board are imperative. The Board is bound to apply the terms and conditions of service as properly laid down in the bylaws. As a statutory body it is not free to make such terms as they think fit and proper. There is a legal compulsion on the Board to comply with by laws, which they may frame. The Coir Board is required by the statute to frame bylaws in regard to the conditions of service of its officers and employees. These bylaws would impose an obligation on the Board; it cannot deviate from the conditions of service. There is a legal compulsion on the Board to comply with by laws, which they may frame. The Coir Board is required by the statute to frame bylaws in regard to the conditions of service of its officers and employees. These bylaws would impose an obligation on the Board; it cannot deviate from the conditions of service. Any deviation will be enforced by legal sanction of declaration by courts to invalidate actions in violation of rules and regulations. The existence of rules and bylaws under the statute is to ensure regular conduct with a distinctive attitude to that conduct as a standard. Such bylaws give the employees a statutory status and impose restriction on the employer and the employees with no option to vary the conditions. As Chief Justice Ray pointed in the aforementioned decision of the Supreme Court, an ordinary individual in a case of master and servant contractual relationship enforces breach of contractual terms. The remedy in such contractual relationship of master and servant is damages because personal service is not capable of enforcement. In cases of statutory bodies there is no personal element whatsoever because of the impersonal character of statutory bodies. In the case of statutory bodies it has been said that the element of public employment or service and the support of statute require observance of rules and regulations. Failure to observe requirements by statutory bodies is enforced by courts by declaring dismissal in violation of rules and regulations to be void. The Supreme Court has repeatedly observed that whenever a mans rights are affected by decision taken under statutory powers, the court would presume the existence of a duty to observe the rules of natural justice and compliance with rules and regulations imposed by statute. Thus arbitrary action will be avoided and Article 16 would be complied with. The non-framing of bylaws may not have been the fault of the Board; it might be that in respect of the Boards framing recruitment rules and forwarding the same to the Central Government for approval and notification, the Central Government might not have acted promptly. Anyhow, the Union of India is a party to the writ petition and this court can therefore give appropriate directions in the matter. Anyhow, the Union of India is a party to the writ petition and this court can therefore give appropriate directions in the matter. It is brought to my notice that the Coir Board had really framed recruitment bylaws and as late as 8th January 1975 the Secretary had written to the Central Government for arranging for early notification of the by laws. In the circumstances of the case, I would issue a writ of mandamus to both the Central Government and the Coir Board to see to it that Rules relating to recruitment, promotion etc., governing the service conditions of the employees of the Coir Board are framed and implemented as expeditiously as possible and also direct that any appointment or promotion that would be effected till the implementation of such rules, would be only provisional and subject to the rules as finally framed and implemented. The original petition is disposed of as above. There will be no order as to costs.